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  1. #1

    Default Accepting Six Months Rent in Advance in California

    My house is in San Jose, CA and I have prospective renters who have horrible credit, but have cash since they just sold a home. They have offered to pay 6 months rent in advance as they realize they have credit issues. I plan on signing them to a 1 year or 6 month lease.

    Am I ok accepting the 6 months advance rent or does that violate any laws in my location?

    Thanks for the input!!!

  2. #2

    Default Re: Accepting 6 months rent in advance in California

    It is a BAD idea! No one offers that unless they are EXTREMELY desperate! It is against the law in CA unless you sign at least a six month lease but you should NEVER sign a fixed term lease with people you KNOW may be problems right off the bat. Well in fact you should never RENT to them to begin with!!

    First off, did you verify they owned the house they said they did, check the mortgage payment history on it and see if they SOLD it or it was foreclosed on?

    Next, have you ran a FULL screening on these people not just credit but criminal, civil, evictions, get LL references from before they supposedly owned the house, VERIFIED income (via written proof) and employment, etc. And do they meet ALL of your criteria VERIFIED? Of course they do not meet the CREDIT portion of it right? Did you actually analyze the report to see what was what?

    If you make an exception to your criteria for one set of applicants waiving your requirements in place of a cash bribe flashed in your face, you open yourself up for all sorts of Fair Housing issues since you conceivably should then offer that "bribe" option to anyone who does not meet your credit (or other) criteria.

    There is a reason they are willing to pay you up front. NO ONE ELSE will rent to them! Nor should you! You must remember that often times the need to terminate a tenancy (why MTM is best) is often "gray" and has NOTHING to do with paying rent. So many new and/or desperate LL's get caught up with not seeing the big picture only focusing on CASH.

    LL's need to realize that getting rent is just ONE part of finding a good tenant. There are a lot of other aspects that can cause a horrible tenancy besides not getting your rent. Not to mention trying to evict when you have accepted six months of rent up front can be VERY tricky in court.

    Often times LL's who are new and don't know any better, don't even screen and just accept the loads of up front cash and ask questions later..when it is far too late. Then when they SUSPECT but perhaps can't prove as one example drug dealing from their unit..what a nightmare if they signed a fixed term lease!

    And it is ILLEGAL in CA to take several months up front rent unless you DO sign a fixed term lease of at least six months which will protect the BAD applicants not you and is the last thing you should do with people who do NOT qualify. Let someone else take that chance.

    Hold out for a QUALIFIED applicant that meets ALL of your criteria.

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