Whether you’re a landlord or searching for an apartment, you’ll be dealing with the less fun aspects of leases, negotiating rent, and security deposits. Rental laws are set at the state level in the US, so it’s a good idea to be familiar with California rental laws. A security deposit is a feature of residential or commercial leases where the landlord will require a security deposit to ensure against rent left unpaid or damages occurring to the premises during the tenant's occupancy, as ascertained at the end of the lease. In the context of damages, the security deposit is also known as a damage deposit. In this article, we will focus on the various security deposit laws applicable in the State of California.
How Much Can a Landlord Collect for Security Deposit?
Like most states in the US, California law limits landlords on the amount they can charge for the security deposit. A landlord may charge a tenant or renter an equivalent of two-month rents for property landlord should take some risk thats why the security deposit if the apartment is unfurnished. For furnished apartments, the landlord may charge an equivalent of three-month rent. Above all, the California tenant-landlord law prohibits landlords from charging non-refundable security deposit fees. There is no requirement in California law on how the security deposit is held, i.e. in interest or non-interest bearing account, or the amount of interest due back to the tenant. However many cities have such laws, such as Beverly Hills and San Francisco, and Santa Monica so checks your local laws as well.
Can A Landlord Withhold a Tenant’s Security Deposit?
Yes, landlords in California are allowed by law to withhold a part or whole of a tenant’s security deposit due to the following reasons:
- If the tenant fails to pay rent
- Damage to the apartment by the tenant or tenant guests beyond the usual case of wear and tear.
- The cost of cleaning the unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in.
- Breach of the lease agreement or any debt incurred due to the renter’s violation of the lease.
Note, Landlords are not allowed to withhold/deduct from a renter’s deposit in the following circumstances;
- In the case of ordinary wear and tear damage to the residence
- In the case of a natural disaster like flood, hurricane, and earthquake
- For damages that occurred before the tenant leased the apartment.
What is Considered Ordinary Wear and Tear?
In many states, this is up to some interpretation, and California is no exception. However, from previous court filings, we know that customary that normal wear and tear applies to day to day occurrences that are not caused by neglect of the tenant. For example, small nail holes, worn paint, running toilets, paths worn from walking on carpet, steam cleaning carpets, none of these would qualify for retaining part of a security deposit. A landlord cannot charge for repainting the walls, unless unauthorized painting, larger holes in the wall, crayon marks, etc are present. Small chips in paint are normal wear and tear. Examples of repairs that qualify for would be broken windows, missing blinds, missing or broken cabinet doors or handles gouges on countertops, gouges in flooring.
Do Tenants Have the Right to Carryout a Move Out Inspection in California?
On the 1st of January, 2003, the State of California passed a bill that granted tenants the right to inspect an apartment with the landlord before moving out, at the tenant’s request. The landlord and tenant walk-through the residence together with to point out any issues that will need to be covered using the fee. This way the tenant can opt to get these fixed before the final inspection.
The landlord must notify the tenant within a reasonable amount of time your intent to inspect the property. This must occur before the tenant moves out, so they have the opportunity to make corrections if they so choose. Before doing a walk-through inspection, there are some conditions that should be met:
- The landlord must give the tenant 48-hours’ notice, in writing, before the inspection. If both landlord and tenant agree, in writing, that notice is not necessary, then you can forgo this step.
- The tenant doesn’t have to agree to a walk-through inspection. However, if they do, it should take place no sooner than two weeks before the tenancy ends. After the inspection, you must provide the tenant with a list of all repairs that will need to be fixed before the final inspection.
When Should A Landlord Refund a Renter Security Deposit After Move-Out?
Under the California tenant-landlord law, a landlord is required to refund a tenant’s security deposit within 21 days after they move out. Failure to refund the deposit at the expiration of 21 days, gives the tenant the legal right to sue the landlord in small claims court.
What Is the Procedure if Landlord is Withholding the Security Deposit?
Landlords are required by law to mail or personally deliver an itemized statement within 21 days of move-out that lists deductions made from the security deposit, with a refund of any amounts not deducted. Copies of receipts for the repair charges/deductions must be included, unless repairs cost less than $126 or the tenant waives his or her right to get the receipts. The tenant must provide the landlord with their new address.
Where is California’s Security Deposit Law?
Utopia Management is a full-service property management company serving California since 1994. Contact us for more information regarding managing rental property both commercial and residential.