Q: My parents recently retired and live on a fixed income. They want to keep living in their home of 30 years. One idea they have is to rent out a room in their home to defray some of their living costs. They indicated they don't want to get "too formal" about the arrangement. Do you have any suggestions?
A: Although your parents might like to see this as an "informal arrangement" to defray some of their costs, inviting a tenant in your home should be treated like any business contract. Your parents are becoming "landlords" according to the California Civil Code with its own set of rights and responsibilities.
As a minimum, the following information must be in writing and be provided within 15 days of entering into an oral agreement and once a year within 15 days if requested by the tenant (CC 1962). This information is 1) the name, phone number and address of the manager, if any; 2) the name, phone number and address of the owner or someone authorized to accept service of process and all notices and demands from the tenant; 3) the name, phone number and address of the person authorized to receive rent if rent may be paid personally, including the days and hours that person will be available to receive payments; and the form in which rent may be paid, such as check, money order or cashier's check.
However, we strongly recommend that the terms and conditions of a rental tenancy be written down so that all parties have a clear understanding of what is expected. Relying on memories of oral agreements leaves too much room for misunderstandings and disagreements that can ruin the relationship or result in legal disputes. If your parents realize that a written agreement covering all relevant terms does make more sense, they should not rely on the type of rental agreement forms found on the Internet or stationery stores or from online sites. These forms might be out of date or fail to reflect specific California requirements. Nolo Press (nolo.com) has forms that are reliable, very easy to use and up to date.