When you enter a lease for a rental unit, odds are your landlord will ask you for a security deposit. While a security deposit may be referred to as a “deposit,” “pet deposit,” or “damage deposit,” the law governing its collection, use, and disposition is the same.
California’s Security Deposit Law
California Civil Code section 1950.5 is the law governing security deposits in California. A landlord may ask for a maximum of two months’ rent for unfurnished rental units and three months’ rent for furnished rental units. A landlord may require payment of the first month’s rent separate and apart from the security deposit prior to move-in.
A security deposit may be used “for any purpose,” including but not limited to
- Default in the payment of rent;
- Repair of damage to the rental unit caused by the tenant or a guest of the tenant, exclusive of ordinary wear and tear;
- Costs of cleaning the rental unit after the tenancy end to return it to the same level of cleanliness it was in at the inception of the tenancy; and
- Any obligation by the tenant under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear if authorized by the rental agreement.
California law does not require landlords to pay interest on security deposits. However, local rent ordinances may require landlords to do so. For example, landlords of rental units subject to the San Francisco Residential Rent Stabilization and Arbitration Ordinance are required to pay tenants interest on security deposits.
Paying for Repairs
At the end of the tenancy, tenants are responsible for returning the rental property to their landlord in the same condition in which the tenant received it LESS “ordinary wear and tear.” In other words, the landlord must pay all costs associated with remedying “ordinary wear and tear.” Unfortunately, “ordinary wear and tear” is not specified. The discoloring of paint; wearing down of rugs; minor scratches and nicks on walls and countertops; etc. likely constitute “ordinary wear and tear,” for which the landlord is responsible. A large gaping hole in the wall caused by a rowdy friend at a party or a cracked window caused by a toddler throwing a baseball through it likely do not constitute “ordinary wear and tear,” and the tenant will be responsible. Reasonable people can disagree as to what does and does not constitute “ordinary wear and tear,” which in turn determines who is responsible for the repairs. This is why tenants should always request a final inspection from the landlord before moving out.
Requesting an Inspection Before Moving Out
Within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord must notify the tenant in writing of the option to request an initial inspection and of the right to be present at the inspection. If the tenant requests an inspection, the landlord or the landlord’s agent must make an initial inspection of the rental property no earlier than two weeks before the termination or the end of lease date. The purpose of this initial inspection is to allow the tenant an opportunity to fix any identified deficiencies to avoid deductions from the security deposit. The landlord and tenant must attempt to schedule the inspection at a mutually acceptable date and time. The landlord must provide at least forty-eight hours’ prior written notice of the date and time of the inspection. A landlord can proceed with the inspection, whether the tenant is present or not unless the tenant withdraws the inspection request.
After the inspection, the landlord must give the tenant an itemized statement specifying repairs or cleanings proposed to be the basis of any deductions from the security deposit. This statement, which must also include certain legal language from Section 1950.5, must either be given to the tenant if the tenant is present for the inspection or left inside the rental unit. The tenant then will have an opportunity during the period between the initial inspection and the final date of the tenancy to remedy these identified deficiencies to avoid deductions from the security deposit.
Returning the Security Deposit to the Tenant After Moving Out
On or before twenty-one calendar days (i.e., three weeks) from the date the tenant moved out of the rental unit, the landlord must provide the tenant, by personal delivery, by first-class mail, or by email (if the landlord and tenant agree to email) (1) a copy of an itemized statement indicating the basis for, and the amount of, any security deposit received and the disposition of the security deposit, and (2) any remaining portion of the security deposit. The itemized statement must also include copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises. If the landlord or landlord’s employee did the work, the itemized statement must describe the work performed, including time spent and the reasonable hourly rate charged. If the landlord or landlord’s employee did not do the work, the landlord must provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. If a deduction is made for materials or supplies, the landlord must provide a copy of the bill, invoice, or receipt. The parties can agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. Otherwise, the tenant should provide the landlord with a mailing address so that a check can be mailed. If the tenant has not provided a new mailing address, the landlord must use the address of the vacated rental unit.
Suing a Landlord for Keeping the Security Deposit in Bad Faith
If the deposit is not accounted for or returned within twenty-one days, the tenant can, after making a written demand, sue the landlord in Small Claims Court if the amount at issue is $10,000.00 or less. The bad faith retention by a landlord of the security interest or any portion thereof can subject the landlord to statutory damages of up to twice the amount of the security deposit, in addition to actual damages (including the portion of any security deposit retained in bad faith).
If you have moved out of your rental unit, twenty-one days have elapsed, and your landlord has withheld all or part of your security deposit in bad faith, contact Tenant Law Group for a complimentary case evaluation.