New to renting out a Los Angeles property and unsure of all the laws and legal requirements?
It’s a bit of a struggle even for experienced investors who have been in the market for a long time. The laws are complex and they’re always changing.
You don’t want to invite a lawsuit because of a legal mistake. Here’s your compliance checklist that will help you as a new landlord in Los Angeles or as a real estate investor outside of the city who may not be familiar with our regulatory environment.
Quick Look:
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The Rent Stabilization Ordinance
The first item on any legal compliance checklist is the Rent Stabilization Ordinance in Los Angeles (RSO). Generally, the RSO applies to Los Angeles rental properties that were constructed on or before October 1, 1978, as well as replacement units under LAMC Section 151.28. The ordinance covers almost all types of rental housing, including apartments, condos, townhomes, and duplexes. Single-family homes are generally exempt, unless there are two or more single-family homes on the same plot of land.
The Rent Stabilization Ordinance (RSO) sets the rules for how and when landlords can adjust rents on covered properties, while also requiring those units to be registered with the city. Although the RSO also governs eviction standards, its impact on rent control and annual increases is where most landlords feel it most directly.
Rent increases are tightly regulated. Each year, the city establishes an allowable adjustment range tied to inflation. The increase is calculated using the Consumer Price Index (CPI), based on the 12-month period ending September 30. Depending on economic conditions, this typically places annual increases somewhere between 3 percent and 8 percent.
Because these limits can change from year to year, landlords need to pay close attention to the current guidelines before issuing any rent increase notices. Failing to follow the correct percentage or applying an increase at the wrong time can lead to penalties, disputes, or the need to roll back rents.
For the current adjustment period running through June 30, 2026, the allowable annual rent increase is capped at 3 percent. Landlords who pay for a tenant’s gas or electricity may add an additional 1 percent, bringing the maximum allowable increase to 4 percent for qualifying units.
Staying compliant with RSO requirements not only protects landlords legally, but also helps ensure rent increases are implemented smoothly and defensibly.
Fair Housing Checklist
Fair housing laws in Los Angeles generally follow the statewide laws. Landlords need to have a good understanding of the fair housing laws as they pertain to rental property
California’s laws are stricter than the federal government. We have more protected classes than the seven classes covered in federal laws. You cannot discriminate or deny housing based on:
(Federal and state):
- Race
- Skin color
- Religion or creed
- National origin or ancestry.
- Sex
- Physical or mental disability
- Familial status
(State):
- Sexual orientation
- Age
- Gender identification
- Gender expression
- Veteran or military status
- Citizenship
- Primary language
- Marital status
- Source of income
- Genetic information
The biggest mistakes are often made during the marketing and screening processes. You need to ensure you’re not using discriminatory language in your listings, and you have to screen tenants without any regard to these things. You must document and demonstrate that your process is objective and consistent.
Security Deposit Laws in Los Angeles
California limits the amount a landlord can charge for a security deposit. For most properties, your security deposit cannot exceed the equivalent of one month’s rent.
Security deposits may only be used for specific purposes. Landlords can deduct for unpaid rent, cleaning necessary to return the unit to the condition it was in at move-in (excluding normal wear and tear), and repairs for damage caused by the tenant or their guests. Routine maintenance, aging fixtures, and ordinary use cannot be charged against the deposit.
When a tenant moves out, California law requires landlords to return the security deposit within 21 calendar days. If any portion is withheld, the landlord must provide an itemized statement explaining each deduction. For deductions related to repairs, receipts or estimates are generally required unless the total deductions are minimal.
Tenants also have the right to request a pre-move-out inspection. This allows landlords to identify potential issues in advance and gives tenants the opportunity to correct problems before vacating, which can reduce disputes.
Failure to follow California’s security deposit laws can result in landlords being ordered to return the deposit and potentially pay additional damages. Clear documentation and timely compliance are key to protecting both parties.
Screening Los Angeles Tenants
New screening laws are in place, and so this is a checklist item for both new and experienced landlords. If you collect an application fee, you are required to approve the first application that meets your rental criteria. You cannot collect 10 applications and screen them together, and then choose the tenant you want. The process has to be completed in the order that the applications are received, and you have to approve the first tenant who meets your standards.
Just Cause Eviction
The RSO and California’s Tenant Protection Act ensure that you have a good reason to evict a tenant. Owners cannot simply elect not to renew a lease agreement. Most evictions are due to nonpayment of rent, lease violations, or criminal activity, and all of those are just causes to evict.
If you need to evict and it’s not the tenants fault (maybe you’re moving back into the home, for example), you’ll need to provide 60 days of notice and pay a relocation fee that’s equivalent to one month’s rent.
Register Your LA Rental!
Landlords in the City of Los Angeles are required to register their rental properties annually with the Los Angeles Housing Department (LAHD) and obtain a registration certificate. This is mandatory for almost all residential rental properties, including single-family homes, duplexes, and apartments, regardless of whether they are rent-controlled or not. Make sure you’re up to date on your registration.
These are only a few of the most important laws you need to be aware of. It can quickly become overwhelming, and that’s why professional property management in Los Angeles is such a good idea. We can protect you from legal pitfalls and ensure you remain in compliance. Contact us at Earnest Homes.
