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Question: I am a landlord and do not want to look for new tenants every year. How many years should I make my lease for?

Answer: A lease can be beneficial or disastrous for a landlord. It is beneficial to keep a tenant for multiple years, so you do not lose time and rent trying to find a new tenant. However, it is my experience that in tight rental markets most tenants do not like to move because of the time and expense it takes to move.  Therefore, under the current rental market, it may not benefit you to have a long-term lease with your tenants.  For example, a long-fixed term lease could prevent a landlord from taking back possession of their property from a problem tenant. Under such a lease, if the tenant becomes a problem a few months into the lease, you will not be able to give them a 30 or 60-day notice to quit. You may only evict the tenant if they are clearly breaking a material term in the lease or committed some illegal act or nuisance. Thus, for this reason many landlords choose to execute a one-year lease or a month to month agreement with their tenants. By keeping the term of the lease to one year or less, it gives the landlord greater flexibility to remove problem tenants if the need arises. 

Question: I am a landlord and want my tenants to use email and communicate electronically. Can they sign their lease or month-to-month agreement with an electronic signature?

Answer: Yes, if your tenant agrees to sign electronically, then you may use an electronic signature on the lease or rental agreement. If you and your tenant prefer to communicate by email only or sign other documents electronically, then you may sign an agreement with your tenant authorizing electronic communications and signatures. If you choose to sign the agreement in this manner, you should choose to use a well-known and reputable electronic signature program.  However, you should still consult an attorney before trying to electronically serve any legal document to your tenants, such as a notice.  There are strict service requirements that landlords must follow in serving legal documents to their tenants, irrespective of any agreement you make with your tenant to agree to electronic communications. 

Question: I am a landlord and want to make sure I am entitled to attorney’s fees if I have to evict my tenant. Do I have to make the attorney’s fees clause mutual where the tenant is entitled to fees if they win and I lose?

Answer: Yes. You should have a reciprocal attorney’s fees clause. Further, the tenant may be entitled to attorney fees if he/she prevails in a landlord-tenant dispute even if the attorney’s fees clause only allows the landlord to collect attorney fees. If you wish to have an attorney’s fees clause in your rental agreement, I strongly recommend that you cap the amount of attorney’s fees and costs that can be awarded.  For example, the clause can state that the prevailing party in a landlord-tenant dispute is entitled to attorney’s fees and costs, however such fees and costs are capped at $1,000 (or some other similar amount).  A cap on attorney’s fees may deter tenants and tenants’ attorneys from filing lawsuits against you, or asserting a less than meritorious defense to an eviction action.

Question: I am filling out the lease for my new tenants and do not want to provide my address for the ‘Service of Notice’ section. Can I leave this section blank?

Answer: No, you must provide the tenant with a mailing address where the tenant can serve you with notice. If you are concerned about giving the tenant your personal address, then you may want to get a post office box. This allows you to receive rent and notices from the tenant in the mail without giving the tenant your personal address.

Question: I have a lease with a late fee clause that has a penalty that increases on a daily basis.  How much can I charge the tenant per day?

Answer: California law does not set a limit to the amount of late fees that may be charged to a tenant; however, common practice in the industry is that the  late fee should not be more than six percent of the monthly rent.  The lease should state that the parties agree that the amount of the late fee bears a reasonable relationship to the actual costs and damages incurred by the landlord because of the late payment.  Your lease should not include a late fee clause that has a daily penalty that increases each day.  This late fee would likely be found to be unenforceable in court, and your  tenant  may be entitled to a refund of any amount that he/she overpaid in late fees.  If you have questions regarding a specific late fee provision, or you need to amend your lease to correct an improper late fee provision, you should consult with an attorney.