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Security Deposits

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Security Deposits

A security deposit is any money a landlord takes from a tenant other than the advance payment of rent. The security deposit serves to protect the landlord if the tenant breaks or violates the terms of the lease or rental agreement. It may be used to cover damage to the property, cleaning, key replacement, or back rent.

Note: If you paid as part of your security deposit an amount that was designated in the lease or rental agreement as “last month’s rent,” that amount may be used for your last month’s rent. Other forms of security deposit cannot be used to pay your last month’s rent unless the landlord specifically agrees to allow it.

There are limits on the amount of the security deposit:

  • If the security deposit is for a residential property without furniture, the security deposit may equal 2 times the rent.
  • If the residence is furnished, the landlord may charge up to 3 times the rent.
  • There is no restriction on the amount of the security deposit for the rental of a commercial property.

Cases seeking return of a security deposit are usually handled in small claims court. They cannot generally be dealt with in an eviction (unlawful detainer) case since, in an eviction, possession of the property is still at issue.

Return of security deposit

After a tenant moves out, a landlord has 21 days to:

  • Return the tenant's deposit in full, or
  • Mail or personally give to the tenant:
    • A written letter explaining why he or she is keeping all or part of the deposit,
    • An itemized list of each of the deductions,
    • Any remaining refund of the tenant’s deposit, and
    • Copies of receipts for the charges/deductions, unless repairs cost less than $126 or the tenant waived (gave up) his or her right to get the receipts. If the repairs cannot be finished within the 21-day period, the landlord can send the tenant a good faith estimate of the cost of repairs. Then within 14 days of the repairs being done, the landlord must send the tenant the receipts.

A landlord can deduct from the tenant’s security deposit:

  • The cost of fixing any damages to the property caused by the tenant or the tenant’s guests. This does not include ordinary 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 (less reasonable wear and tear).
  • Unpaid rent (including rent owed if the tenant does not give the landlord the proper notice that he or she is moving out).

The landlord can withhold from the security deposit ONLY those amounts that are necessary and reasonable, and NOT a result of “ordinary and reasonable wear and tear." For example, a landlord may not make tenants pay for painting, new carpets, or curtains unless they are damaged beyond ordinary and reasonable wear and tear. And the landlord cannot use the tenant’s security deposit to repair problems that existed in the unit before the tenant moved in.

Note: If the rental is sold while the tenant still lives there, the landlord is supposed to transfer the security deposit to the new owner, and the new owner is supposed to refund all of the deposit, or the portion that the tenant is entitled to, when he or she moves out. If the previous owner fails to transfer the security deposit to the new owner, the tenant can sue the prior owner for its return, or for the portion that the tenant is entitled to receive.

Getting Your Security Deposit Back and Avoiding Disputes

Keeping records of the condition of the rental property

When moving in give your unit a thorough inspection.  It's best to inspect the premises before you move in; it will be easier to spot problems while the place is bare.

Check the place over for damage, dirt, mildew, and obvious wear and tear. Don't neglect to check out things that might not be readily apparent, such as water pressure and sink drainage in the kitchen and bathrooms, the operation of appliances, the appearance of floors and walls, and the condition of the pads under the carpet. 

In Davis, landlords and tenants are required to conduct a move-in and move-out walk-through inspection using a city-approved checklist.  Make a detailed inventory of what you find. The more you record about the unit when you move in, the better position you'll be in when moving out to show that certain problems already existed before you moved into the unit. The tenant is entitled to receive a copy of the checklist.

Ideally, you and your landlord should fill out the checklist together to prevent any disputes or disagreements. Otherwise, it's smart to bring along a roommate or a friend so that there's at least one other witness to the condition of the unit at move-in time. If you spot problems, describe specifically what is wrong. Rather than simply noting "damage to carpet," for example, state "cigarette burns, frayed edges in carpet next to picture window." The more detailed you are, the clearer it is that you're not responsible for those damages. You and your landlord should both sign the checklist after completing it. Make a copy so that each of you has one.

At the end of your tenancy, you'll make another inspection of the same items, noting their condition at move-out time. If items that were okay at move-in are now damaged, your landlord may hold you responsible for fixing them, but you'll be protected from being billed for damage that existed before you moved in.

Take Pictures

Besides completing a checklist, it's also a good idea to document the condition of your unit with photographs or video. Whether you take a photo with your phone or use a separate camera, print out two sets of the photos as soon as possible. Give one set to your landlord. Each of you should date and sign both sets of photos. If you make a video, clearly state the time and date when the video was made and send the landlord a copy.

Repeat this process when moving out.

Giving the landlord notice of intent to move out

If you are the tenant and intend to move out (and you pay rent once a month), you have to give your landlord 30 days’ notice in writing. If you do not, the landlord can charge you for the unpaid rent even after you move out. Unless a new tenant pays the rent, you will have to pay for those 30 days. If you pay rent every week, you have to give 7 days’ notice.

If your lease is not up yet and you want to move out, you will need to talk to your landlord. If your lease or your landlord allows you to sublet the unit, you can find a subtenant, following the landlord’s or the lease requirements. Or, the landlord may allow you to let someone else take over your lease, and give you back your deposit and take a new security deposit from the person taking over the lease.

BUT if your landlord does not agree to let you off the lease early or to sublet the unit, and you still break the lease, you may be liable to the landlord for the rent through the end of the lease. The landlord will have a “duty to mitigate,” which means that he or she will have to make reasonable efforts to re-rent the unit and if he or she is able to rent it, you are only liable for rent for the month(s) it went unrented. If you end up owing the landlord rent for breaking the lease early, he or she may take it out of your security deposit.

Roommate Situations

Roommate situations are complicated. It is important that your rental agreement specifies each roommate’s rights and responsibilities.

If only one roommate is moving out and the person moving out paid the deposit to another roommate, that roommate has to return the deposit. If the person moving out gave the deposit to the landlord, and the landlord has a separate rental agreement with the roommate moving out, the landlord returns the deposit. If, however, the roommates all signed one rental agreement for the unit and only one of the roommates moves out, the landlord does not have to return the security deposit until all the roommates have left.

Security Deposit Disputes

If a landlord does not return the entire amount of the tenant’s security deposit within the 21 days required by law, and the tenant disputes the deductions from the deposit:

  • The tenant can write a letter to the landlord explaining why he or she believes he or she is entitled to a larger refund. The tenant should keep a copy of the letter for his or her records. Get help writing a letter asking a landlord to return a security deposit.

The tenant and landlord can also try a local consumer mediation program such as Yolo Conflict Resolution Center to see if they can resolve their dispute out of court. Find for more information on mediating your security deposit dispute. 

If the tenant and landlord cannot reach an agreement on the amount of the security deposit returned, the tenant can file a lawsuit against the landlord for return of the security deposit. The tenant can sue for:

  • The amount of the deposit, plus
  • Twice the amount of the security deposit in damages. The judge may give the tenant these additional damages if the landlord retained the deposit in bad faith.

The tenant can sue the landlord in small claims, which is informal and inexpensive, as long as the total amount sued for is $10,000 or less. Click for more information on Small Claims.  Click for Yolo County Small Claims Court.

Legal Services of Northern California provides legal assistance to students, low-income and the elderly.  ASUCD Legal Services is available to currently register/enrolled undergraduates as well.

To look up the California laws on security deposits, or if you're writing a letter to your landlord or tenant and want to cite the applicable law, the relevant statute(s) can be found at California Civil Code § § 1950.5 and 1940.5(g).

Sources: California Courts, The Judicial Branch of California and NOLO California Security Deposit Limits and Deadlines