A tenant must check her lease to see if she is allowed to rent out a room in an apartment, condominium, home, accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU). If the lease is silent on the issue, it is presumed that the tenant is allowed to rent out a room, but the tenant should not take this for granted. She should discuss the matter with her landlord before renting out the room. A tenant who rents a room to another party in violation of a written or oral lease can be evicted for breaching the terms of the lease.
Co-Tenant Vs. Subtenant
A tenant and landlord should also clarify whether a new resident would be considered a co-tenant or a subtenant. A co-tenant forms a contract with the landlord and will pay rent directly to the landlord. The original tenant does not have the power to evict a co-tenant. Only the landlord has this power.
A subtenant pays rent to the original tenant, who is also called the master tenant. In this situation, only the master tenant has formed a contract with the landlord. The master tenant has rights and obligations under the lease, but the subtenant does not. Both the master tenant and the landlord have the power to evict the subtenant.
Assignments of Lease Interest
An assignment occurs when a tenant transfers his entire interest in the lease to a new resident. The original tenant then stops being a tenant. The new tenant takes her place. The lease then becomes a contract between the new tenant and the landlord. A lease can prohibit assignments. If a lease is silent or ambiguous on assignment, California law provides that “the ambiguity...shall be construed in favor of transferability.”
A tenant who makes a complete assignment of the lease usually remains liable under the lease. The original tenant is liable for his initial term and any extension options granted before the assignment. This means that if the new tenant stops paying rent, the landlord can collect rent from the original tenant. The original tenant can make an agreement with the landlord and pay additional money to be freed from such liability.
A tenant must make sure that renting to another individual will not violate California state law concerning the maximum number of people in a room and dwelling. California utilizes the two-plus-one formula. This allows two people to occupy each bedroom and one additional person in the living space. There is an exception to allow a young child to be in the same room as her parents. If having more people in the unit does not present health and safety concerns, more people can live in the dwelling.
A tenant should review her city and county ordinances regarding renting a room. For example, San Francisco’s rent ordinance generally allows a tenant to replace a departing roommate and/or increase the number of occupants living in the unit. This is true even if such replacements or increases are prohibited by the written lease. Yet a tenant cannot sublet or assign the entire lease to a new tenant in violation of a lease. The tenant also cannot sublet the unit to a tourist or for transient use as defined in the city’s short-term rental ordinance for a period of less than 30 days.
Oakland provides that subletting is not grounds for termination of a lease if the landlord unreasonably withheld the right to sublet after a written request by the tenant if the tenant continues to reside in the unit and the sublet is a one-for-one replacement of a departing tenant. A landlord who does not respond to a tenant’s request to sublet within 14 days is deemed to have approved the subletting. The city attorney has the authority to enforce this rule, which is part of Oakland’s "just cause for eviction" ordinance.
Illegal Uses Not Protected
Even if a tenant’s rental agreement allows him to rent out a room in the house, the tenant cannot rent out the room for an illegal purpose. This would violate the lease and state law. It would also potentially violate city and county ordinances. As an example, a tenant cannot rent out a room in an apartment for the purpose of manufacturing an illegal drug.
A tenant cannot rent out an illegal unit. An illegal unit is a dwelling that does not meet the requirements for habitability that are defined by state law and city or county ordinances. As an example, a room would be uninhabitable if it had a condition that created a hazard, such as lead paint.
When a master tenant rents a room that is uninhabitable, the rental agreement between him and the subtenant is void. This means that the tenant is not entitled to collect or request rent from the subtenant. A tenant who rents such a room can also be evicted by the landlord for breaching the lease. This is because she engaged in an illegal activity relating to the property.
Some cities, such as San Bernardino, have special inspection programs to reduce unauthorized rentals of certain types of properties. San Bernardino’s program concerns single-family rental properties. By offering a single-family home for rent, the owner consents to have the property inspected by the city on an annual basis. A tenant of a single-family home should be aware that a city officer can visit the residence and determine whether he has rented an illegal unit.
Many California cities and counties have enacted ordinances that determine whether a renter can offer a short-term rental. Renters often use a technology platform like Airbnb or VRBO, or a website like Craigslist to advertise short-term rentals. Ordinances affect parties differently depending on where the property is located, what type of property it is, how long the short-term rental is for and the terms of the lease or rental agreement. Local ordinances also affect the owner of the property. A city or county can require the owner to register the property, get a license or permit or pay fees and taxes to offer a short-term rental.
A renter and owner who violate a local ordinance can suffer financial penalties and other sanctions, like denial of future permits for short-term rentals. A renter should avoid trying to generate extra cash through rental income without talking with his landlord. The renter should clarify who is entitled to receive the new resident’s rent. A renter should also be aware that collecting rent is considered to be earning money. The money now becomes taxable income, which the renter must report.
Background Checks and Security Deposits
A master tenant who offers a room for rent to a subtenant may require a subtenant to get a background check. She may also require the subtenant to pay a security deposit to her. When a subtenant pays a security deposit to a master tenant, he is not considered to have paid a security deposit to the master tenant’s landlord.
Some cities and counties in California have ordinances that regard background checks and security deposits. Oakland prohibits a landlord from asking about a potential tenant’s criminal history. A master tenant should seek to abide by the same rules as a landlord. A tenant who is unclear as to whether laws like this apply to him should consult a landlord-tenant attorney.
A master tenant that leases to a subtenant must follow California state law with regard to the amount of the security deposit. A master tenant that sublets an unfurnished room can require the subtenant to pay up to two times the monthly rent for the security deposit. A master tenant subleasing a furnished room can require the subtenant to pay up to three times the rent. She can also require that the security deposit be used for the last month’s rent. This can be risky because the security deposit may not be enough to cover the last month’s rent and any damages to the room.
Duty to Repair
California law requires a tenant to use reasonable care to maintain a residential rental unit, including all common areas inside and outside the unit. A tenant who damages any part of the premises is financially responsible for repairs. A master tenant is financially responsible for his subtenant’s damages. This includes damage that makes the premises fall below the standards of habitability.
Fair Housing Rules
A master tenant who rents out a room cannot violate California state law and local ordinances regarding fair housing. This means a master tenant cannot discriminate against a subtenant on the basis of factors such as race, color and disability. There are certain factors about which a master tenant has more freedom to decline an applicant. These include citizenship, immigration status and primary language.
A master tenant in a senior community would be allowed to decline an applicant because of the applicant’s age. This is true because California state law protects senior communities and rules relating to them. A master tenant could decline an applicant who was under the age limit of the community. In fact, a master tenant could face problems if she did not decline such an applicant.
Generally, a person offering housing cannot discriminate against an applicant because of the applicant’s familial status. Familial status covers a household with children under the age of 18, a person who is pregnant, or an individual or family pursuing legal custody of children under the age of 18. Yet a master tenant renting out a room might have some room to decline an applicant because of this factor.
If a master tenant rented a room in a house to a subtenant who brought children with him, the master tenant could face a situation in which there were too many people in the room. The master tenant would be responsible for violating state law, local ordinances and his own lease for overcrowding. A master tenant with questions about the application of fair housing laws to subletting should consult an attorney experienced in landlord-tenant law.
Raising the Rent
California law and local ordinances combine to determine whether the landlord can raise the rent if a new tenant moves in. Generally, California law provides that a landlord can raise the rent if a subtenant entirely takes over an apartment. A landlord can also increase the rent by up to 10 percent for an additional occupant if that person is not a spouse or child of the original tenant.
San Francisco provides an example of how local ordinances can change these rules. Here, a landlord cannot increase the rent for a unit because of the replacement of the departing tenant or the addition of new occupants. This is true even if the original tenant agreed to the increase. Yet if the original tenant or all of the original tenants have permanently vacated the unit, and the only remaining occupants are subtenants who moved in on or after January 1, 1996, the landlord can increase the rent to market rate.
- San Francisco Rent Board: Topic No. 151, Subletting and Replacement of Roommates
- Santa Monica Municipal Code: 1806, Eviction
- San Diego Municipal Code: Article 8, Housing
- City of Oakland: Just Cause for Eviction Ordinance, Measure EE
- California Department of Housing and Community Development: Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs)
- California Health and Safety Code Sections 17920-17928 Rules and Regulations
- Justia: Gruzen vs. Henry (1978)
- California Civil Code, ART 2. CONTRACTS [1549 - 1701], TITLE 1. NATURE OF A CONTRACT [1549 - 1615], CHAPTER 5. Consideration [1605 - 1615]: 1608
- U.S. News & World Report: Oakland Bans Tenant Criminal Background Checks
- California Civil Code, TITLE 5. HIRING [1925 - 1997.270], CHAPTER 6. Assignment and Sublease [1995.010 - 1995.340]: ARTICLE 2. Restrictions on Transfer [1995.210 - 1995.270]
- California Department of Fair Employment and Housing: Fair Housing Rules