California Landlord Security Deposit

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CALIFORNIA LANDLORD SECURITY DEPOSIT

In California the landlord security deposit laws are very clear cut.  At the beginning of the tenancy, you most likely will require the tenant to pay a security deposit. You can use the security deposit if the tenant moves out owing rent, damages the rental unit beyond normal wear and tear, or leaves the rental less clean than when the tenant moved in. Under California Landlord Tenant law, a lease or rental agreement cannot say that a security deposit is “nonrefundable.” This means that when the tenant moves, you must return the security deposit, unless you use it for a lawful purpose.

California law specifically allows the landlord to use a tenant’s security deposit for four purposes:

  • For unpaid rent;
  • For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in;
  • For repair of damages, other than normal wear and tear, caused by the tenant or the tenant’s guests; and
  • If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.

All of these charges are considered to be Security Deposits:

  1. Last month’s rent,
  2. security deposit,
  3. pet deposit,
  4. key fee, or
  5. cleaning fee.

The maximum Security Deposit allowable is two times the monthly rent.  The security deposit may be a combination, for example, of the last month’s rent plus a specific amount for security. No matter what these payments or fees are called, the law considers them all, as well as any other deposits or charges, to be part of the security deposit.

The exceptions to this rule are the application fee, and the screening fee.

A landlord can withhold from the security deposit only those amounts that are reasonably necessary for these purposes. The security deposit cannot be used for repairing defects that existed in the unit before you moved in, for conditions caused by normal wear and tear during your tenancy or previous tenancies, or for cleaning a rental unit that is as clean as it was when you moved in.216 A rental agreement or lease can never state that a security deposit is “nonrefundable.”217

California Security Deposit law gives, you 21 calendar days or less after the tenant moves to either:

  • Send  a full refund of your security deposit, or
  • Mail or personally deliver to the tenant an itemized statement that lists the amounts of any deductions from the security deposit and the reasons for the deductions, together with a refund of any amounts not deducted.

You  also must send  copies of receipts for the charges that the you incurred to repair or clean the rental unit and that you deducted from the security deposit. You must include the receipts with the itemized statement.

If you or your employees did the work – The itemized statement must describe the work performed, including the time spent and the hourly rate charged. The hourly rate must be reasonable.

  • If another person or business did the work – You must provide the tenant with copies of the person’s or business’ invoice or receipt. You must provide the person’s or business’ name, address, and telephone number on the invoice or receipt, or in the itemized statement.
  • If you deducted for materials or supplies – You must provide you a copy of the invoice or receipt. If the item used to repair or clean the unit is something that you purchased regularly or in bulk, you must reasonably document the item’s cost (for example, by an invoice, a receipt or a vendor’s price list)
  • If the landlord made a good faith estimate of charges – The landlord is allowed to make a good faith estimate of charges and include the estimate in the itemized statement in two situations: (1) the repair is being done by the landlord or an employee and cannot reasonably be completed within the 21 days, or (2) services or materials are being supplied by another person or business and the landlord does not have the invoice or receipt within the 21 days. In either situation, the landlord may deduct the estimated amount from your security deposit. In situation (2), the landlord must include the name, address and telephone number of the person or business that is supplying the services or materials.
    Within 14 calendar days after completing the repairs or receiving the invoice or receipt, you must mail or deliver to the tenant a correct itemized statement, the invoices and receipts described above, and any refund to which the tenant is entitled.