Top Five Things You Should Know Before Becoming a Property Manager

Your dream of positive cash flow as a property investor can be marred by what you don’t know about landlord and tenant rights.

As property values begin to rise once again, the thought of “cashing in” on the market crosses many minds. Yes, there is money to be made in property investment and Property, but before you plunk down some hard-earned cash, here are the top things you should know.


1. You may enter into a verbal lease agreement, although it is always wise to get it in writing.

There is nothing illegal about verbal agreements in property management. That being said, insuring both your rights, and the rights of your tenant, are protected, it is ALWAYS best to enter into an agreement that is spelled out in legal and binding terms.

2. There is no such thing as a “non-refundable” security deposit.

Landlords may collect a security deposit at the time of a lease signing not to exceed 2 months’ rent in the case of an unfurnished apartment, or three months’ rent for a furnished apartment. That being said, you may not use any verbiage or enter into an agreement that states any portion of the security deposit is non-refundable. Here is what the California Department of Real Estate says on the matter:

"In a residential lease, notwithstanding the specific terminology (e.g., “advance payment,” “fee,” or “charge”) or
the purpose designated (e.g., a “cleaning” or “security” deposit) used to describe a tenant’s monetary deposit to
secure performance under the lease, the money deposited is a refundable security deposit. Any purported waiver 134 CHAPTER NINE
by a tenant of the right to a refund of the security deposit (less allowable debits attributable to the tenant’s
defaults as specified in the lease) is null and void."

You may withhold a portion of the security deposit for damage and repairs caused by the tenant while they occupied the property.

3. You have a legal duty to keep the dwelling in a habitable condition.

Your obligation as a landlord includes making sure the property is livable for your tenants. This includes:

  • Providing waterproofing and weather protection of roof and exterior walls, as well as unbroken doors and windows.

  • Plumbing and gas facilities maintained in working order according to current laws and codes.

  • The ability for the tenant to obtain hot and cold running water. The tenant may be responsible for water utilities as prescribed in your lease agreement.

  • Electrical outlets and lighting maintained in good working order.

  • Building and grounds free of debris, garbage, and vermin at time of property delivery.

The tenant is obligated to maintain all of the above and to inform you of any changes or issues that affect their tenancy.

4. You must tenants give notice prior to entering the property.

Landlords of residential property must give “reasonable advance notice” prior to entering a tenant’s property, and only during normal business hours under the following conditions:

  • in case of emergency;

  • to make necessary or agreed repairs, decorations, alterations, or improvements;

  • to supply necessary or agreed services;

  • to show the dwelling to prospective or actual purchasers, mortgagees, tenants, workers, or contractors;

  • where the tenant has abandoned or surrendered the premises; or

  • pursuant to court order.

Landlords may not abuse the right of access to harass a tenant.

5. You must go through proper legal channels to evict a tenant.

Tenant evictions are a civil matter, and you must go through proper procedures to legally notify your tenant that they are to be evicted. In essence, you will be required to serve a three day notice to comply with the terms of the lease. You can learn more about how to define legal reasons for evicting a tenant (In Los Angeles County) by clicking here.

You can learn more about landlord and tenant’s rights according to the California Department of Real Estate by clicking here.

As always, Montemayor & Associates are here to answer all of your real estate questions. Whether you’re buying or selling a residential property, or are considering property as an investment, our team of highly trained, licensed and experienced agents can answer all of your questions. Call us at either of the numbers listed at the top of this page, or by using the Quick Response form below.