Renting out a property in Costa Mesa, California, can be a lucrative endeavor, given the city’s thriving coastal location, proximity to Orange County’s job hubs, and appeal to both young professionals and families. However, to protect your investment and ensure a smooth landlord-tenant relationship, a well-crafted lease agreement is essential. A lease agreement is a legally binding contract that outlines the rights and responsibilities of both the landlord and tenant, helping to prevent disputes and clarify expectations.
If you’re new to renting out property in Costa Mesa or simply looking to refine your process, this guide will walk you through how to create a comprehensive lease agreement tailored to local regulations and best practices. From understanding California and Costa Mesa-specific laws to including key clauses, here’s everything you need to know.
Why a Strong Lease Agreement Matters in Costa Mesa
Costa Mesa’s rental market is competitive, with a mix of single-family homes, condos, and apartments catering to diverse tenants. Whether you’re renting near South Coast Plaza, the beaches, or the bustling Fairgrounds area, a solid lease agreement protects you from potential legal and financial headaches. California has some of the most tenant-friendly laws in the U.S., and local ordinances in Costa Mesa may add further layers of regulation. A poorly drafted lease could leave you vulnerable to disputes over rent, maintenance, or eviction processes.
A good lease agreement not only complies with state and local laws but also reflects the specific needs of your property and tenancy. Let’s dive into the steps to create one.
Step 1: Understand California and Costa Mesa Rental Laws
Before drafting your lease, familiarize yourself with the legal framework governing rentals in California and Costa Mesa. Here are key laws to consider:
- California State Laws
- Rent Control: As of 2025, the California Tenant Protection Act (AB 1482) caps annual rent increases at 5% plus inflation (up to a maximum of 10%) for certain properties. Check if your Costa Mesa rental qualifies (exemptions include newer buildings and single-family homes not owned by corporations).
- Security Deposits: California limits security deposits to two months’ rent for unfurnished units and three months’ for furnished ones. You must return the deposit (minus lawful deductions) within 21 days of the tenant moving out.
- Habitability: Landlords must maintain a property in a habitable condition, including working plumbing, heating, and weatherproofing.
- Costa Mesa Local Ordinances
- Costa Mesa doesn’t have its own rent control ordinance as of April 2025, so state laws apply. However, check for updates with the Costa Mesa City Council, as local policies can evolve.
- The city enforces property maintenance codes, so ensure your lease aligns with expectations for repairs and upkeep.
- Fair Housing Laws
- Federal and California fair housing laws prohibit discrimination based on race, color, religion, sex, national origin, disability, and familial status. Your lease must not include discriminatory terms or policies.
Research these laws thoroughly or consult a local attorney to ensure compliance. Non-compliance can lead to costly penalties or lawsuits.
Step 2: Choose the Lease Type
Decide whether you need a fixed-term lease (e.g., one year) or a month-to-month lease. In Costa Mesa’s dynamic rental market:
- Fixed-Term Leases provide stability, locking in tenants and rent amounts for a set period. They’re ideal for long-term tenants.
- Month-to-Month Leases offer flexibility, appealing to tenants like students or temporary workers near Costa Mesa’s business districts. However, they allow either party to terminate with 30 or 60 days’ notice (depending on tenancy length under California law).
Specify the lease type clearly at the beginning of the document.
Step 3: Include Essential Lease Clauses
A lease agreement should cover all critical aspects of the tenancy. Here’s a breakdown of must-have sections:
- Parties Involved
- List the full names of the landlord (or property manager) and all tenants signing the lease. Include contact information for both parties.
- Property Description
- Detail the rental property’s address (e.g., “1234 Harbor Blvd, Costa Mesa, CA 92626”) and specify what’s included (e.g., parking spaces, appliances, or backyard access).
- Lease Term
- State the start and end dates for a fixed-term lease (e.g., June 1, 2025, to May 31, 2026) or clarify the month-to-month arrangement.
- Rent Details
- Specify the monthly rent amount, due date (e.g., the 1st of each month), and payment method (e.g., bank transfer, check). Include late fees (California allows reasonable penalties, typically 5-10% of rent, if stated in the lease).
- Security Deposit
- Note the deposit amount and conditions for its return. Mention allowable deductions (e.g., unpaid rent, damage beyond normal wear and tear).
- Maintenance and Repairs
- Clarify responsibilities. Landlords handle structural repairs (e.g., roof leaks), while tenants may maintain minor upkeep (e.g., replacing light bulbs). Include a process for reporting issues.
- Utilities
- Specify which utilities (water, electricity, trash) the tenant pays versus those covered by the landlord.
- Pet Policy
- State whether pets are allowed, any restrictions (e.g., no dogs over 25 lbs), and additional pet deposits or rent (within California limits).
- Rules and Restrictions
- Outline property rules, such as no smoking, noise limits (aligned with Costa Mesa noise ordinances), or restrictions on subletting (e.g., no Airbnb without permission).
- Termination and Eviction
- Explain conditions for lease termination or eviction, adhering to California’s notice requirements (e.g., 3-day notice for non-payment of rent).
Step 4: Add Costa Mesa-Specific Considerations
Tailor your lease to Costa Mesa’s unique rental landscape:
- Parking: With limited street parking in some areas (e.g., near downtown or the Mesa Verde neighborhood), clarify parking arrangements—assigned spaces, guest parking, or permits.
- Proximity to Beaches: If your property is near Newport Beach or coastal amenities, address wear-and-tear issues like sand or saltwater damage.
- Short-Term Rental Rules: Costa Mesa restricts short-term rentals (under 30 days) in residential zones. If applicable, prohibit tenants from listing your property on platforms like Airbnb.
Step 5: Use Clear, Professional Language
Write your lease in plain, concise language to avoid confusion. Avoid legal jargon unless necessary, and ensure terms are enforceable. For example:
- Weak: “Tenant shall keep the place nice.”
- Strong: “Tenant agrees to maintain the property in a clean and sanitary condition, reporting any damage to the landlord within 48 hours.”
Consider using a template from a reputable source (e.g., California Association of Realtors) as a starting point, then customize it.
Step 6: Review and Include Disclosures
California law requires certain disclosures in rental agreements:
- Lead-Based Paint: For properties built before 1978, provide a lead paint disclosure and pamphlet.
- Megan’s Law: Include a notice about the availability of sex offender registry information.
- Mold: Disclose any known mold issues or remediation efforts.
- Bed Bug Disclosure: Inform tenants about bed bug prevention and reporting procedures.
Failure to include these can invalidate parts of your lease or expose you to liability.
Step 7: Get Legal Review (Optional but Recommended)
Given California’s complex landlord-tenant laws, have an attorney or property management expert review your lease. This step is especially wise for first-time landlords or if your property has unique features (e.g., a pool or shared spaces).
Step 8: Sign and Distribute
Once finalized:
- Have all tenants (and co-signers, if applicable) sign the lease.
- Sign it yourself as the landlord.
- Provide each tenant with a copy and keep the original in a secure location.
In California, electronic signatures are legally valid, making it easy to execute the lease remotely—a plus in Costa Mesa’s tech-savvy market.
Tips for Success in Costa Mesa Rentals
- Stay Updated: Laws change. Revisit your lease annually or when significant legislation passes.
- Screen Tenants: Use background and credit checks (with tenant consent) to ensure reliability.
- Document Everything: Take photos of the property before move-in and note its condition in the lease or an addendum.
Final Thoughts
Creating a lease agreement for your Costa Mesa rental doesn’t have to be daunting. By understanding local and state laws, including clear terms, and customizing the document to your property, you’ll set the stage for a successful tenancy. A well-drafted lease is your first line of defense against disputes and a tool to foster a positive landlord-tenant relationship in this vibrant Orange County city.
Whether you’re renting a beachside condo or a family home near the Costa Mesa Country Club, take the time to get it right. Your investment—and peace of mind—depend on it.
