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Security Deposits Under California Law

March 1, 2017

 

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. The security deposit can often be a major source of disagreement between a tenant and a landlord.

 

Below are some guidelines regarding what a landlord can and cannot use a security deposit for, in addition to refund procedures landlords must follow when returning security deposits and the consequences that may follow if they do not.

 

Landlord’s Use Of Security Deposit

 

According to California Civil Code Section 1950.5(b) and (e), a landlord can use a security deposit for any of the following:

  • Unpaid rent;

  • Fees associated with cleaning the property after the tenant moves out, but only to make the property as clean as it was when the tenant originally moved in; and,

  • The cost of restoring or replacing furniture, furnishings, or other items of personal property, for reasons other than normal wear and tear.

 

What A Landlord Can’t Use A Security Deposit For

 

According to California Civil Code Section § 1950.5(b) and (e), a landlord cannot use a security deposit for:

  • Repairing any defects that existed in the unit before a tenant moved in;

  • Conditions originating through normal wear and tear during a tenant’s occupation;

  • Conditions originating through normal wear and tear during a previous tenant’s occupation;

  • Cleaning a rental unit that is as clean as it was when the tenant originally moved in; and

  • A claim that the lease terms state that the security deposit is nonrefundable.

 

Landlord’s Process For Returning Security Deposits

 

A landlord must, 21 days or less after the tenant has moved out of the property:

  • Send the tenant a full refund of the security deposit or;

  • Under California Civil Code Section § 1950.5(g)(1), mail or deliver to the tenant a statement that clearly lists the amounts of any deductions from the security deposit and the reasons for those deductions, together with a refund of any amounts not deducted.

    • The landlord pursuant to California Civil Code Section § 1950.5(g)(2), must also send the tenant copies of receipts for the charges that the landlord incurred to repair or clean the property and that the landlord deducted from the tenant’s security deposit. The landlord must include the receipts with the itemized deductions statement.

 

Legal Actions Against Landlord’s Failing To Return Security Deposits Correctly

 

If a tenant does not receive a security deposit from a landlord or notices improper deductions from a security deposit, the tenant can file a lawsuit in small claims court for the amount of the security deposit plus court costs, and likely also a penalty and interest up to $10,000. If the amount in controversy exceeds $10,000 a claim must be filed in superior court.

 

According to California Civil Code Section § 1950.5(l), a tenant that is able to prove to the court that a landlord acted in “bad faith” in refusing to return a security deposit can receive the amount of the security deposit and often a bad faith award. The court can order the landlord to pay the tenant the amount of the improperly withheld deposit, plus up to twice the amount of the security deposit as a “bad faith” penalty. The court can award a bad faith penalty in addition to actual damages whenever the facts of the case warrant, even if the tenant has not requested the penalty.

 

The tenant may also be able to collect attorney’s fees from the landlord if the lease agreement includes a clause authorizing attorney’s fees in the case of a lawsuit. Tenants representing themselves will not be able to collect attorney’s fees.

 

Dealing with a landlord can be a difficult and drawn-out process. It is important for tenants to retain experienced and professional attorneys in order to maximize the effectiveness involved in obtaining a security deposit wrongfully taken or lessened. Please call Aziz Legal by phone (408) 203-4627 or email us at abid@azizlegal.com.

 

This article is merely informational and is not intended to be used as legal advice. Use of any information from this article is for general information only and does not represent personal legal or tax advice, either express or implied. Readers are encouraged to consult Aziz Legal, or another attorney, for any specific legal matters.

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