What to know before applying for a rental in California

Know your rights before applying for a rental.

Sacramento continues to soak in national attention for rising rents, as an influx of people stream in to settle down in the evolving city.

The Capitol city has been experiencing a rental price boom over the past couple years and is showing no signs of dropping any time soon.

Not only has Sacramento been seeing some of the fastest growing rent in the nation, but the city itself is going through a population growth. The city is a hot spot for people looking to leave their metro city for a new one. The majority of people choosing Sacramento as their new city are Bay Area transplants who are in search of more affordable housing. However, contrary to popular belief, former Bay Area residents are not the sole reason for the rising rent in the area. Sacramento simply cannot keep up with the demand and doesn't have enough new units to provide affordable housing.

The apartment occupancy rate in Sacramento is currently 96.4 percent, making the rental process very competitive, in addition to being more expensive.

The rental process generally includes having to submit an application and an application screening fee.

An application form is different from a rental agreement. It's common for application forms to ask for the names, addresses, and telephone numbers of your current and past employers, as well as of your past landlords and personal references, according to the California Department of Consumer Affairs (DCA). An application will also ask for your social security and driver's license number, as well as a bank account numbers and credit card account numbers.

An application cannot ask questions that could be used to discriminate against a tenant based on race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or any disability or medical conditions, or whether you have persons under the age of 18 living in your household. Landlords also cannot ask about immigration is citizenship status.

Landlords don't have to have a reason to refuse rent to anyone. However, if the decision is based on an applicant's credit history, California law requires the landlord to give a written notice stating the following:

  • The decision was based partly or entirely on information in the credit report
  • The name, address, and telephone number of the credit reporting agency
  • 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

It's a good idea to check out a copy of your credit report in case the reason for refusal to rent is one that has been fixed and not updated, or can be easily fixed. 

When submitting an application form, a landlord can and likely will, charge a non-refundable application screening fee. The fee covers the cost of checking information about an applicant. There are laws protecting prospective tenants from overpaying a fee. Every year, California evaluates the cap on a screening fee based on changes to the Consumer Price Index. For 2017, the maximum price a landlord can charge is $47.72.

The fee cannot exceed the out-of-pocket costs of gathering the information, according to California Civil Code § 1950.6. A landlord is expected to provide an itemized receipt for the fees paid and if there is no personal reference or credit check done, the landlord is required to return the money amount not used in the screening. An agreement on a refund should be in writing prior to paying a screening fee.

A landlord is also required by law to send a copy of an applicant's credit report if requested by the applicant.

It's important to note, according to state civil code, "Unless the applicant agrees in writing, a landlord or his or her agent may not charge an applicant an application screening fee when he or she knows or should have known that no rental unit is available at that time or will be available within a reasonable period of time."

A landlord cannot charge screening fees by law, if a unit becomes unavailable. It's the landlord's responsibility to take down a listing or inform an interested renter if the unit has been claimed.

Here are some good questions to ask before paying a screening fee, according to the DCA:

1. 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?
2. Is the fee refundable if the credit check takes too long and you're forced to rent another place?
3. 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?
 
In a tough rental market such as Sacramento, where units are scarce, prospective tenants can ask to put a holding deposit on a place of interest. The holding deposit is not a right to move into a unit, nor is it equivalent to a security deposit.
 
It's simply an agreement that the landlord will hold the unit for the interested tenant until the first month's rent and security deposit is presented. The landlord can keep part of, or all of the holding deposit if a person decides not to rent a unit. It's between the prospective renter and the landlord to agree about details in writing.
 
If the landlord decides to rent to someone else while in possession of a holding deposit, the landlord should return the full amount since the agreement would be broken.
 
Here are some questions to ask when negotiating a holding deposit agreement, according to the DCA:
 
1. 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.
2. Is any part of the holding deposit refundable if you change your mind about renting?
 
In general, Sacramento city laws follow the DCA's "California Tenants: A Guide to Residential Tenants' and Landlords' Rights and Responsibilities" booklet. 
 
Resources:
 
 
2. Tenant Rights, Laws and Protections: California, U.S. Department of Housing and Urban Development
 

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