What makes a valid Los Gatos lease agreement ?!

Two years ago we came across a situation where a landlord had agreed to verbal lease agreement with a tenant !  And as if that was not risky enough, this verbal agreement between landlord and tenant included the tenant to perform some elderly care services for the landlord’s Mom who was living in the same house!

This was insane since the implication were huge.  If there was a dispute on amount of services, this land lord could have lost the home to litigation since the tenant could have claimed that she was on call for 24 hours a day.  She could have taken the landlord to court and won a solid case for back wages that could have created a huge lien on the property.  

Bottom line is that leases have to be in writing.  In addition there are other considerations that have to be included in the lease for it to be a legally binding contract in California.   These elements are:

1) Signed by Both Parties:  A legal lease has to be signed by both parties.  Any roommates who are staying in the property also have to sign the agreement.

2) Detail of Leased Space:   Lease agreement should include the property address and the amenities included in the lease.  For instance, if you are leasing a detached studio on your property, the contract should have your home address, but clearly identify that only the studio is the leased space.   If there are areas that are off limits to the tenants, they should all be documented.   

3) Terms of the Lease:  A valid lease should include the start and end of the term.  Typical lease agreement are 1 year, but there are standard contracts for month-month as well which we recommend using in California. 

4) Payment Details:  The lease agreement should outline the payment requirements including the security deposit.  The agreement should also document the penalties for late payments along with the ramification of missed payments which could be eviction.

5) Payment Terms:  The lease should identify when and where the payment needs to be made.  You can offer your tenants the option to drop off the payment at your office or mail it. 

6) Utility Costs:   The terms of the lease should identify what utilities are included and what are excluded.

7) Right of Entry:  A valid California lease include terms and conditions under which the landlord can enter the rental unit to handle any emergencies such as electrical or water damage.  This clause can also include routine inspections that property manager or the landlord can require from the tenant.

8) Terms of Use: This clause in the contract will define how many people are supposed to occupy the property.  This is also the clause where you can restrict any attempts to sub-lease your property.

9) Renewal Terms:   A lease should include the renewal terms under which the contract would be extended for another term.  You can also include a rent acceleration as part of the renewal terms.

As you can see negotiating a lease for your Los Gatos property is not a trivial matter and the legal language included in all these sections of the contract can create unnecessary risk for landlords.     That’s why we are convinced that hiring a property manager for your Los Gatos home is worth the extra pay.

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