LOOKING FOR AND INSPECTING RENTAL UNITS

Looking for a rental unit

When you are looking for a rental unit, the most important things to think about are:

• The dollar limit that you can afford for monthly rent and utilities.
• The dollar limit that you can afford for all deposits that may be required (for example, holding and security deposits).
• The location that you want.

In addition, you also should carefully consider the following:

• The kind of rental unit that you want (for example, an apartment complex, a duplex, or a single-family house), and the features that you want (such as the number of bedrooms and bathrooms).
• Whether you want a month-to-month rental agreement or a lease.
• Access to schools, stores, public transportation, medical facilities, child-care facilities, and other necessities and conveniences.
• The character and quality of the neighborhood (for example, its safety and appearance).
• The condition of the rental unit (see "Inspecting before you rent").
• Other special requirements that you or your family members may have (for example, wheelchair access).

You can obtain information on places to rent from many sources. Local newspapers carry classified advertisements on available rental units. In many areas, there are free weekly or monthly publications devoted to rental listings. Local real estate offices and property management companies often have rental listings. Bulletin boards in public buildings, local colleges, and churches often have notices about places for rent. You can also look for "For Rent" signs in the neighborhoods where you would like to live.

Inspecting before you rent

Before you decide to rent, carefully inspect the rental unit with the landlord or the landlord's agent. Make sure that the unit has been maintained well. Use the inventory checklist as an inspection guide. When you inspect the rental unit, look for the following problems:

• Cracks or holes in the floor, walls, or ceiling.
• Signs of leaking water or water damage in the floor, walls, or ceiling.
• The presence of mold that might affect your or your family's health and safety.
• Signs of rust in water from the taps.
• Leaks in bathroom or kitchen fixtures.
• Lack of hot water.
• Inadequate lighting or insufficient electrical outlets.
• Inadequate heating or air conditioning.
• Inadequate ventilation or offensive odors.
• Defects in electrical wiring and fixtures.
• Damaged flooring.
• Damaged furnishings (if it's a furnished unit).
• Signs of insects, vermin, or rodents.
• Accumulated dirt and debris.
• Inadequate trash and garbage receptacles.
• Chipping paint in older buildings.(Paint chips sometimes contain lead, which can cause lead poisoning if children eat them. If the building was built before 1978, you should read the booklet, "Protect Your Family From Lead in Your Home," which is available by calling 1-800-424-LEAD or at www.epa.gov/lead.)
• Signs of asbestos-containing materials in older buildings, such as flaking ceiling tiles, or crumbling pipe wrap or insulation. (Asbestos particles can cause serious health problems if they are inhaled.) For more information, go to www.epa.gov/asbestos.
• Any sign of hazardous substances, toxic chemicals, or other hazardous waste products in the rental unit or on the property.

Also, look at the exterior of the building and any common areas, such as hallways and courtyards. Does the building appear to be well-maintained? Are the common areas clean and well-kept?

The quality of rental units can vary greatly. You should understand the unit's good points and shortcomings, and consider them all when deciding whether to rent, and whether the rent is reasonable.

Ask the landlord who will be responsible for paying for utilities (gas, electric, water, and trash collection). You will probably be responsible for some, and possibly all, of them. Try to find out how much the previous tenant paid for utilities. This will help you be certain that you can afford the total amount of the rent and utilities each month. With increasing energy costs, it's important to consider whether the rental unit and its appliances are energy efficient.

If the rental unit is a house or duplex with a yard, ask the landlord who will be responsible for taking care of the yard. If you will be, ask whether the landlord will supply necessary equipment, such as a lawn mower and a hose.

During this initial walk-through of the rental unit, you will have the chance to see how your potential landlord reacts to your concerns about it. At the same time, the landlord will learn how you handle potential problems. You may not be able to reach agreement on every point, or on any. Nonetheless, how you get along will help both of you decide whether you will become a tenant.

If you find problems like the ones listed above, discuss them with the landlord. If the problems are ones that the law requires the landlord to repair, find out when the landlord intends to make the repairs. If you agree to rent the unit, it's a good idea to get these promises in writing, including the date by which the repairs will be completed.

If the landlord isn't required by law to make the repairs, you should still write down a description of any problems if you are going to rent the property. It's a good idea to ask the landlord to sign and date the written description. Also, take photographs or a video of the problems. Use the time and date stamp, if your camera has this feature. Your signed, written description and photographs or video will document that the problems were there when you moved in, and can help avoid disagreement later about your responsibility for the problems.

Finally, it's a good idea to walk or drive around the neighborhood during the day and again in the evening. Ask neighbors how they like living in the area. If the rental unit is in an apartment complex ask some of the tenants how they get along with the landlord and the other tenants. If you are concerned about safety, ask neighbors and tenants if there have been any problems, and whether they think that the area is safe.

THE RENTAL APPLICATION

Before renting to you, most landlords will ask you to fill out a written rental application form. A rental application is different from a rental agreement. The rental application is like a job or credit application. The landlord will use it to decide whether to rent to you.

A rental application usually asks for the following information:

• The names, addresses, and telephone numbers of your current and past employers.
• The names, addresses, and telephone numbers of your current and past landlords.
• The names, addresses, and telephone numbers of people whom you want to use as references.
• Your social security number.
• Your driver's license number.
• Your bank account numbers.
• Your credit account numbers for credit reference.

The application also may contain an authorization for the landlord to obtain a copy of your credit report, which will show the landlord how you have handled your financial obligations in the past.

The landlord may ask you what kind of job you have, your monthly income, and other information that shows your ability to pay the rent. It is illegal for the landlord to ask you questions about your race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability or whether you have persons under the age of 18 living in your household. Also, the landlord should not ask you questions about your age or medical condition¹⁸ (See "Unlawful Discrimination.")

The landlord may ask you about the number of people who will be living in the rental unit. In order to prevent overcrowding of rental units, California has adopted the Uniform Housing Code's occupancy requirements,¹⁹ and the basic legal standard is set out in footnote 19. However, the practical rule is this: a landlord can establish reasonable standards for the number of people per square feet in a rental unit, but the landlord cannot use overcrowding as a pretext for refusing to rent to tenants with children if the landlord would rent to the same number of adults.²⁰

CREDIT CHECKS

The landlord or the landlord's agent will probably use your rental application to check your credit history and past landlord-tenant relations. The landlord may obtain your credit report from a credit reporting agency to help him or her decide whether to rent to you. Credit reporting agencies (or "credit bureaus") keep records of people's credit histories, called "credit reports." Credit reports state whether a person has been reported as being late in paying bills, has been the subject of an unlawful detainer lawsuit (see Unlawful Detainer Lawsuit section), or has filed bankruptcy.²¹

Some credit reporting agencies, called tenant screening service, collect and sell information on tenants. This information may include whether tenants paid their rent on time, whether they damaged previous rental units, whether they were the subject of an unlawful detainer lawsuit, and whether landlords considered them good or bad tenants.²²

The landlord may use this information to make a final decision on whether to rent to you. Generally, landlords prefer to rent to people who have a history of paying their rent and other bills on time.

A landlord usually doesn't have to give you a reason for refusing to rent to you. However, if the decision is based partly or entirely on negative information from a credit reporting agency or a tenant screening service, the law requires the landlord to give you a written notice stating all of the following:

• The decision was based partly or entirely on information in the credit report; and
• The name, address, and telephone number of the credit reporting agency; and
• A statement that you have the right to obtain a free copy of the credit report from the credit reporting agency that prepared it and to dispute the accuracy or completeness of information in the credit report.²³

If the landlord refuses to rent to you based on your credit report, it's a good idea to get a free copy of your credit report and to correct any erroneous items of information in it.²⁴ Erroneous items of information in your credit report may cause other landlords to refuse to rent to you also.

Also, if you know what your credit report says, you may be able to explain any problems when you fill out the rental application. For example, if you know that your credit report says that you never paid a bill, you can provide a copy of the canceled check to show the landlord that you did pay it.

The landlord probably will consider your credit score in deciding whether to rent to you. Your credit score is a numerical score that is based on information from a credit reporting agency. Landlords and other creditors use credit scores to gauge how likely a person is to meet his or her financial obligations, such as paying rent. You can request your credit score when you request your credit report (you may have to pay a fee for the score), or purchase your score from a vendor.²⁵

APPLICATION SCREENING FEE

When you submit a rental application, the landlord may charge you an application screening fee. The landlord may charge up to $37.57, and may use the fee to cover the cost of obtaining information about you, such as checking your personal references and obtaining a credit report on you.²⁶

The application fee cannot legally be more than the landlord's actual out-of-pocket costs, and can never be more than $37.57. The landlord must give you a receipt that itemizes his or her out-of-pocket expenses in obtaining and processing the information about you. The landlord must return any unused portion of the fee (for example, if the landlord does not check your references).

The landlord can't charge you an application screening fee when the landlord knows or should know that there is no vacancy or that there will be no vacancy within a reasonable time. However, the landlord can charge an application screening fee under these circumstances if you agree to it in writing.²⁷

If the landlord obtains your credit report, the landlord must give you a copy of the report if you request it.²⁸ As explained in the section on "Credit Checks," it's a good idea to get a copy of your credit report from the landlord so that you know what's being reported about you.

Before you pay the application screening fee, ask the landlord the following questions about it:

• How long will it take the landlord to get a copy of your credit report? How long will it take the landlord to review the credit report and decide whether to rent to you?
• Is the fee refundable if the credit check takes too long and you're forced to rent another place?
• If you already have a current copy of your credit report, will the landlord accept it and either reduce the fee or not charge it at all?

If you don't like the landlord's policy on application screening fees, you may want to look for another rental unit. If you decide to pay the application screening fee, any agreement regarding a refund should be in writing.

HOLDING DEPOSIT

Sometimes, the tenant and the landlord will agree that the tenant will rent the unit, but the tenant cannot move in immediately. In this situation, the landlord may ask the tenant for a holding deposit. A holding deposit is a deposit to hold the rental unit for a stated period of time until the tenant pays the first month's rent and any security deposit. During this period, the landlord agrees not to rent the unit to anyone else. If the tenant changes his or her mind about moving in, the landlord may keep at least some of the holding deposit.

Ask the following questions before you pay a holding deposit:

• Will the deposit be applied to the first month's rent? If so, ask the landlord for a deposit receipt stating this. Applying the deposit to the first month's rent is a common practice.
• Is any part of the holding deposit refundable if you change your mind about renting? As a general rule, if you change your mind, the landlord can keep some - and perhaps all - of your holding deposit. The amount that the landlord can keep depends on the costs that the landlord has incurred because you changed your mind - for example, additional advertising costs and lost rent.

You may also lose your deposit even if the reason you can't rent is not your fault - for example, if you lose your job and cannot afford the rental unit.

If you and the landlord agree that all or part of the deposit will be refunded to you in the event that you change your mind or can't move in make sure that the written receipt clearly states your agreement.

A holding deposit merely guarantees that the landlord will not rent the unit to another person for a stated period of time. The holding deposit doesn't give the tenant the right to move into the rental unit. The tenant must first pay the first month's rent and all other required deposits within the holding period. Otherwise, the landlord can rent the unit to another person and keep all or part of the holding deposit.

Suppose that the landlord rents to somebody else during the period for which you've paid a holding deposit, and you are still willing and able to move in. The landlord should, at a minimum, return the entire holding deposit to you. You may also want to talk with an attorney, legal aid organization, tenant-landlord program, or housing clinic about whether the landlord may be responsible for other costs that you may incur because of the loss of the rental unit.

If you give the landlord a holding deposit when you submit the rental application, but the landlord does not accept you as a tenant, the landlord must return your entire holding deposit to you.

¹⁵ Business and Professions Code Section 10167
¹⁶ Business and Professions Code Section 10167.9(a).
¹⁷ Business and Professions Code Section 10167.10.
¹⁸ Government Code Sections 12900-12996; Civil Code Sections 51-53; 42 United States Code Section 3601 and following. However, after you and the landlord have agreed that you will rent the unit, the landlord may ask for proof of your disability if you ask for a "reasonable accommodation" for your disability, such as installing special faucets or door handles. (Brown, Warner and Portman, The California Landlords' Law Book, Vol. I: Rights & Responsibilities, pages 9/19-9/20 [NOLO Press 2005]) (see chapter 9 of this reference for a comprehensive discussion of discrimination).
¹⁹ Health and Safety Code Section 17922; see 1997 Uniform Housing Code Section 503(b) (every residential rental unit must have at least one room that is at least 120 square feet; other rooms used for living must be at least 70 square feet; and any room used for sleeping must increase the minimum floor area by 50 square feet for each occupant in excess of two). Different rules apply in the case of "efficiency units." (See 1997 Uniform Housing Code Section 503(b), Health and Safety Code Section 17958.1.)
²⁰ Brown, Warner and Portman, The California Landlord's Law Book, Vol. I: Rights & Responsibilities, pages 9/24-9/26 (NOLO Press 2005). This reference suggests that a landlord's policy that is more restrictive than two occupants per bedroom plus one additional occupant is suspect as being discriminatory.
²¹ Brown, Warner and Portman, The California Landlord's Law Book, Vol. I: Rights & Responsibilities, page 1/16 (NOLO Press 2005); California Practice Guide, Landlord-Tenant, Paragraphs 9:419.5, 9:419.11(Rutter Group, 2002).
²² Schoendorf v. Unlawful Detainer Registry, Inc. (2002) 97 Cal.App.4th 227 [118 Cal.Rptr.2d 313].
²³ Consumer Credit Reporting Agencies Act, Civil Code Sections 1785.1-1785.36 and Section 1785.20(a); Investigative Consumer Reporting Agencies Act, Civil Code Sections 1786-1786.60 and Section 1786.40; 15 United States Code Sections 1681-1681x and 1681m(a). In order to receive a free copy of your credit report, you must request it within 60 days after receiving the notice of denial. See discussion in California Practice Guide, Landlord-Tenant, Paragraphs 2:104.50-2:104.55 (Rutter Group 2004). Landlords' responsibilities when using credit reports are outlined at www.ftc.gov/bcp/conline/pubs/buspubs/landlord.shtm.
²⁴ Civil Code Sections 1785.16, 1786.24, 15 United States Code Section 1681i.
²⁵ Civil Code Sections1785.15(a)(2), 1785.15.1, 1785.15.2; 15 United States Code Section1681g(f). Vendors include www.transunion.com, www,experian.com, www.equifax.com and www.myfico.com.
²⁶ Civil Code Section 1950.6 The maximum fee is adjusted each year based on changes in the Consumer Price Index since January 1, 1998. In 2006, the maximum allowable fee is $37.57. (Issue Insights, California Apartment Association, January 2006.)
²⁷ Civil Code Section 1950.6(c).
²⁸ Civil Code Section 1950.6(f).

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Deanna Stone Killeen is a Partner with the law firm of Morris & Stone, LLP, located in Santa Ana, Orange County, California.  She can be reached at (714) 954-0700, or by email.  The practice areas of Morris & Stone include employment law (wrongful termination, sexual harassment, wage/overtime claims), business litigation (breach of contract, trade secret, partnership dissolution, unfair business practices, etc.), real estate and construction disputes, first amendment law, Internet law, discrimination claims, defamation suits, and legal malpractice.