SECURITY DEPOSITS

Security Deposits: Under Civil Code Section 1950.5:

1.                  Landlords cannot demand more than 2 months rent as a security deposit for unfurnished housing; and

2.                  Landlords cannot demand more than 3 months rent for a fully furnished housing.

Unless the tenant has failed to pay rent as agreed, landlord MUST inform tenants of their rights to a “preliminary inspection” within the last two weeks of the tenancy (i.e., enough time for the tenant to clean or repair the unit sufficiently enough to avoid any deduction from their deposit.

If an inspection is requested [as it should be], the tenant has a right to be present and has a right to require a list of proposed deductions then and there.  Tenant cannot be charged for normal wear and tear or damage for which they were not responsible.  Taking pictures or making notes about the rental unit, and having the other party sign off on it, can go a long way in establishing that the unit was (or was not) returned in the same condition as it was received.

It is recommended that tenants have their unit (including carpets) cleaned by professionals – and that they keep their receipt to prove no further cleaning was necessary.  Cleaning an empty unit is usually cheaper than cleaning a furnished one.  To find a professional cleaner, ask a property management company or maid/janitorial service who they would recommend.

Tenant should take pictures before leaving: Pictures of the front and back of the building, front and back of doors, and each room (while standing in the doorway and from the other side of the room toward the doorway).  They should take pictures of every listed defect they can find (distance and close-ups).  Lying a newspaper over a wet or damp spot, so it will be easily seen after absorbing the water, will help it show up when taking a picture.  A pencil, hand, or book should be held next to holes or scratches in the wall so that the size can be easily identified. 

Filling in nail holes and painting are not valid deduction (unless inherent in the cost of repairs, such as replacing a wall destroyed by tenant).  Minor scratches are usually considered normal wear and tear. Tenant should remove all trash and furnishings to avoid having the cost of removal deducted from their security deposit.

Getting a receipt from the manager, mailing the keys by certified mail (return receipt), or simply leaving the keys on the kitchen counter and locking doors are acceptable methods for a tenants to relinquish possession.

Landlords must refund the full deposit within 21 days after their tenants have left the apartment, UNLESS a notice itemizing specific deductions has been provided to tenant.  Only specific deductions are allowed: such as the reasonably necessary costs of cleaning the rental for the next tenant, repairing damage caused by the tenant (beyond normal wear and tear), and/or for the payment of any unpaid rent. 

Itemized deductions must list all monies and time spent, the hourly rate for labor (or rental equipment), the name and contact information of anyone who did the work (or rented the equipment), what work was actually done – plus any and all receipts.

Any money paid to secure the tenant’s performance under the lease is refundable.  Efforts to circumvent this by labeling the money received as a rental fee, preparation fee, preparation charge, or cleaning fee – is void.

Landlords who fail to return their tenant’s security deposits can be sued in Small Claims Court.  Prior to filing suit, tenant should write landlord a demand letter outlining deductions they contest and why (and keep a copy for the court).  Tenant may also be entitled to “statutory damages and interest” if landlord retained tenant’s security deposit in bad faith.  If it was retained in bad faith, then tenant may be entitled to up to twice their deposit