The Top 3 Legal Mistakes Landlords Make in Los Angeles (And How to Stay Out of Trouble)

Strategic Growth
7 days ago
4 min read

Owning rental property in Los Angeles can be a great investment but let’s be honest: it’s not always a walk in the park. Between juggling repairs, collecting rent, and trying to follow ever changing city laws, even experienced landlords can slip up.

And in L.A., one small mistake can cost you big.

At Strategic Growth Real Estate, we’ve seen it all. From unreturned deposits to accidental discrimination, these common legal missteps catch landlords off guard all the time.

The good news? You can avoid the mess. Let’s walk through the Top 3 Legal Mistakes Landlords Make in Los Angeles and show you how to keep your property (and your peace of mind) protected.

1. Security Deposit Slip-Ups: A $2,000 Mistake Waiting to Happen

You’d be surprised how many lawsuits start over a security deposit.

Some landlords think, “It’s my property I’ll decide what’s fair.” But California law is very clear, and renters know their rights. If you mess this up, tenants can sue. And they usually win.

Here’s what the law says:

You can’t charge more than two months' rent as a deposit for an unfurnished place, or three months' rent for a furnished one.
After the tenant moves out, you have 21 days to return the deposit. No extensions. No excuses.
If you deduct anything (for cleaning, damage, unpaid rent), you must give a written breakdown of the charges plus copies of receipts.
In rent-controlled areas, you may also have to pay interest on the deposit every year.

We’ve seen landlords keep $300 for a cleaning fee with no receipt… and end up paying $2,000 in court.

What to do instead: Work with a manager who handles security deposits by the book, provides clear documentation, and protects you from deposit disputes.

2. Breaking Rent Control or Eviction Rules: Welcome to L.A.'s Legal Maze

Los Angeles isn’t just palm trees and sunshine. It’s also one of the most heavily regulated rental markets in the country. That means rent increases, evictions, and even simple notices all come with rules and those rules change often.

Rent Control 101

If your building was built before October 1, 1978, it’s likely covered under the Rent Stabilization Ordinance (RSO). That means:

You can only raise rent once per year, by a small, city-approved percentage.
You must register your units annually with the city.
“Additional tenant fees” (like for parking, pets, or utilities) are usually not allowed unless approved.

What About Evictions?

Since AB 1482 passed statewide and L.A. adopted stricter rules after the pandemic, you can’t evict tenants just because their lease ends. You need a legal reason, known as “just cause.”

Valid reasons include:

Nonpayment of rent
Breaking the lease
Owner or family move-in (with proper notice and relocation fees)
Substantial renovations (with approval)

Why it matters: If you serve the wrong notice or don’t follow the steps, your eviction could be thrown out—and you may owe your tenant thousands in relocation assistance.

How to stay safe: Know which laws apply to your property and get expert help with notices, increases, and lease enforcement.

3. Screening Tenants the Wrong Way: When a Simple Question Becomes a Lawsuit

You want good tenants we get it. But how you screen them matters. A lot.

Many landlords unknowingly break Fair Housing laws during the application process, especially now that L.A. has added extra protections.

Here’s what you can’t do:

Ask about criminal history (thanks to the Fair Chance Housing Ordinance)
Refuse applicants who use Section 8 or housing vouchers
Ask about family size or kids (That “No kids allowed” policy? Definitely illegal.)
Use different standards for different applicants

Even things like how you write your rental ad can get you in trouble.

If a tenant feels discriminated against intentionally or not they can file a complaint with the city, state, or federal housing agencies. And you could face serious fines.

What’s the fix? Use a consistent, transparent screening process that follows Fair Housing laws and get professional help if you’re not sure what’s okay to ask.

The Bottom Line: You Don’t Have to Do It Alone

Legal mistakes are easy to make in L.A. but they’re even easier to avoid when you have the right team.

At Strategic Growth Real Estate, we manage rental properties throughout Los Angeles and know the ins and outs of:

Rent control and registration
Legal notices and evictions
Security deposit handling
Fair housing and tenant screening
Section 8 compliance
Lease enforcement
City inspections and repairs

Whether you’re a first-time landlord or a seasoned investor, we help you stay legal, stay profitable, and stay stress-free.

Final Thoughts

Being a landlord isn’t just about collecting rent. It’s about managing people, laws, money, and risk especially in Los Angeles.

If you’ve made one of these legal mistakes before, you’re not alone. The important thing is knowing how to fix it and how to prevent it from happening again.

Don’t wait for a lawsuit to teach you the hard way.

Let Strategic Growth Real Estate take the pressure off your shoulders so you can focus on growing your investment, not fighting fires.