CA Landlords -- any laws re: accepting 6 months rent in advance?

Question

I have a prospective tenant who is self-employed and has a 700+ credit score. No issues from his background check and no history of evictions. In his rental application, he offered to pay for a year lease upfront. My lease is for 6 months only (to reset for better seasonal demand) so it would just be 6 months plus security deposit. Are there any laws in California that would make this illegal? Has anyone accepted something similar? Do you accept cashier's check, money order, or a regular check? Would this raise any red flags on my bank account? I'm not used to dealing with this much money upfront, but it doesn't sound like a bad idea if the tenant is willing to prove he could afford the home. I appreciate your time for offering your thoughts and advice!

Joe Homs · Answer

@Terri P.  It can be a BAD idea! No one offers that unless they are EXTREMELY desperate! It is against the law in CA unless you sign at least a six-month lease, but you should NEVER sign a fixed term lease with people you KNOW may be problems right off the bat. Well in fact you should never RENT to them to begin with!!  With that said and the proper due diligence I have done these many times before.  I only accept local bank cashier's checks or cash to begin the lease.  No red flags on your bank account unless you deposit more than $10K at a time.  This will trigger a CTR to the IRS, which is not a big deal, unless they see a pattern of this.  YOU do need to make sure that this tenant can afford to make the rents after the 6-month period.

Good Investing...