Security Deposits: An Essential Part of Every Tenancy

May 12, 2009

Landlords frequently require security deposits upon the tenants’ move-in to ensure that they can be compensated for any damage caused during the tenancy. The following summary discusses some general requirements of California law concerning security deposits for residential properties. Other requirements may also apply based on the applicable city and county.

How much can a landlord demand for security deposit?
Under California law, a landlord may demand a security deposit in an amount equal to two month’s rent (up to three month’s rent for furnished units). Such security deposit amounts are inclusive of any cleaning fee, pet deposit and last month’s rent.

What type of items may be deducted from a security deposit?
Civil Code Section 1950.5(b) permits a landlord to charge a tenant for repairing damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or the tenant’s guest or licensee. In addition, a landlord may generally apply the security deposit toward a tenant’s default in rent payment, cleaning the premises upon a tenant’s move-out to restore the premises to the same condition at the commencement of the tenant’s tenancy. If authorized by the rental agreement, a landlord may also apply the security deposit toward restoring, repairing or replacing or returning personal property or appurtenances, exclusive of ordinary wear and tear.

When must the landlord return the security deposit to the tenant?
Within twenty-one days after a tenant vacates the tenancy, a landlord must provide the tenant with either: (1) a full refund of the entire security deposit or; (2) an itemized statement indicating the amount and description of any deductions along with any applicable bills, invoices, or receipts and return any remaining portion of the security deposit to the tenant. (See California Civil Code Section 1950.5 for further requirements).

What happens if the landlord fails to return the security deposit?
If a landlord fails to return a security deposit in bad faith, the landlord may be subject to a penalty of twice the amount of the security deposit, in addition to any actual damages suffered by the tenant.

Is the landlord required to pay interest on the security deposit?
Landlords are generally not required to pay interest to the tenant on the security deposit unless otherwise required by city or other local law. For instance, both San Francisco and Berkeley require the payment of interest on security deposits.

© 2009 Szeto Law Group. These materials do not constitute legal advice and are for general informational purposes only. They may be reproduced for personal use and for non-commercial distribution. All copies must include this copyright statement.
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