It's a tough rental market in many parts of California, and signing a lease for an apartment is usually cause for celebration. But just like a romance, things can turn sour at the end. Among the most common points of dispute when a tenancy ends are questions about the security deposit. California statutes set out the framework of the law on security deposits, but some provisions can be superseded locally by rent control laws.
What Is a Security Deposit?
The tight rental market in California's urban areas have sent rents soaring. If you're renting, you know that the first month, when you also have to come up with the security deposit, is a major financial hit. You may not even take the time to review the rental agreement language about security deposits.
But that's okay. No matter what the rental agreement or lease states, the bones of the security deposit procedure is established in California law, which supersedes the terms of your contract.
In California, it is legal for a landlord to ask for a security deposit from new tenants. The security deposit is a specified amount of money that the landlord holds during the length of your tenancy. It serves as security to protect the landlord in case you break the rental agreement by not paying rent, damaging the apartment or leaving it dirty. If all goes well, you will get the entire amount back within 21 days of the day you leave.
What Can a Security Deposit Be Used For?
State law describes the kinds of expenses a California landlord can charge against your security deposit. These are listed in California Civil Code Section 1950.5. Essentially, the security deposit can be used:
- For payment of rent due in case you didn't make all payments.
- To repair damages to the rental unit other than ordinary wear and tear.
- To clean the rental unit at the end of the tenancy if it is dirtier than it was when you moved in.
- If the rental agreement provides, to replace furniture, keys or other personal property that was in the rental unit at the beginning of the tenancy.
What Amount of Deposit Is Legal?
California law sets the maximum amount a landlord can take as a security deposit to twice the amount of the monthly rent for an unfurnished unit and three times the rental amount for a furnished unit. For example, if the apartment rent is $2,500 a month, the most security deposit you will pay is $5,000 if the unit is unfurnished and $7,500 if furnished.
But what about a last month's deposit? Or a pet deposit? Or a cleaning deposit or a processing fee? A landlord can label a deposit in any of these ways, but all of the different deposits added together cannot exceed the maximum amount set by California law.
So, in the example of an unfurnished apartment, the landlord might legally seek a $2,500 last month's rent deposit, plus a cleaning deposit of $1,500, plus a pet deposit of $1,000, since the total does not exceed the maximum allowable amount of $5,000. But no other deposits of any kind could be tacked on top.
Are Security Deposits Refundable?
In California, all security deposits are refundable. This is true even if the landlord terms a deposit nonrefundable. You will have a legal right to the refund of your deposit if you meet your rental obligations, like paying rent, giving proper notice when you are moving out, and leaving the unit as clean when you leave as when you moved in.
Do You Get Notice of the Deductions?
A tenant moving out after appropriate written notice is entitled to learn what problems the landlord intends to deduct money from the security deposit for. This notice takes place two weeks before the planned move-out date. It is called an initial inspection, and you are entitled to it, but the onus is on you to request it. This request is a great thing to include in your 30-day notice that you're leaving.
What happens at the initial inspection? Basically you walk through the apartment with the landlord who shows you cleaning or repair issues he has identified. You are also entitled to a written list of the deductions he intends to take from the security deposit if you don't clean up dirty areas and repair what's broken.
After you leave, the landlord does a final inspection to see what cleaning and repairs remain from the list. A landlord is not allowed to add anything new unless it was hidden during the preliminary inspection.
When Do You Get the Deposit Back?
Under the California Civil Code, a landlord must return a security deposit within 21 days of the date the tenant moves out. If no deductions are taken from the deposit, the entire amount must be returned within three weeks.
If deductions are taken, the landlord has to return the remaining amount of the deposit within 21 days from the day you move out, together with a written statement detailing the amounts deducted and the reasons for those deductions. If the notice specifies that more than $126 in cleaning or repair costs were deducted, the landlord must also provide, at the same time, receipts for those services.
Do You Get Interest on Your Deposit?
If you forked over a healthy security deposit equal to two or three months' rent and you've stayed in your apartment for years, you may be eager to get some return on your money. However, California state law doesn't require a landlord to pay you interest on your security deposit. If you live in an area without rent control, you won't get an interest payment.
However, if you live in a California city with a rent control ordinance, local law may require a landlord to pay interest on that deposit. Many of the large cities in the state have rent control, including San Francisco, Los Angeles, Santa Monica, Beverly Hills, Berkeley, Oakland, West Hollywood, Los Gatos and Vallejo.
Some rent controlled cities actually set the interest rate that a landlord is obligated to pay. These include Los Angeles at 0.07 percent for both 2017 and 2018, San Francisco at 1.2 percent for March 2018 through February 2019. For 2018, West Hollywood set the interest rate at zero percent.
What if the Landlord Doesn't Follow the Law?
Some California landlords are diligent about following the law, but many are not. If yours isn't, you may not get the security deposit and deduction statement within 21 days, or at all. Or, you may get a statement listing cleaning and repairs that you dispute or that were not listed at the initial inspection. Fortunately, you can take the matter to small claims court and get additional damages for the inconvenience.
Your first step is to fire off a letter to the landlord. The letter should outline the situation, note the day you moved out, that 21 days have passed and that you haven't gotten your deposit back. Demand that the landlord return your deposit and otherwise follow the law. Send this letter by certified mail return receipt requested.
If you don't get a response, it's time to file a complaint in your county's small claims court. In the complaint, demand the amount of the security deposit you should have received. Under California Civil Code Section 1950.5(l), you are also entitled to what's called statutory damages in an amount equal to twice the security deposit improperly withheld if the landlord is found to have acted in bad faith.