California Security Deposit Returns: What Tenants Can Expect

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Turning over a security deposit to a landlord is a moment where hope and optimism prevail. The tenant says goodbye to the funds, while assuring himself that they will return to him one day. While there are no guarantees about a particular security deposit refund, landlord/tenant laws in California take the guesswork out of the procedure, if not the result. The best way to avoid unpleasant surprises is to get a grasp of the laws on security deposits, act in a manner that optimizes the chance of getting the full amount back, and insist that a landlord comply with the law.

Security Deposit Limits in California

In many areas of California, housing is incredibly tight. A landlord could probably demand an exceptionally high security deposit and find a tenant willing to pay it. But thanks to California landlord/tenant laws, there is a strict cap on the amount of deposit the landlord can demand.

Under California Civil Code Section 1950.5, residential security deposits are limited to a multiple of a month's rent. For members of the armed forces, the security deposit for an unfurnished dwelling unit is capped at an amount equal to one month's rent; if the unit is furnished, the landlord can demand a deposit equal to two month's rent. For all other residential tenants, the security deposit amount is capped at two months' rent for an unfurnished unit, three months' rent for a furnished unit.

Security Deposit Caps in Practice

While the caps are pretty easy to calculate, it's necessary to understand all the fees that are included when figuring out the maximum amount. Are key deposits included? Cleaning deposits? Last month's rent? The quick answer is yes, yes and yes. Every fee a tenant is asked to pay to a landlord before move-in, other than a fee for a background check and current rent, must be counted as part of the security deposit for the cap.

In practice, many configurations are possible. For example, if a member of the armed services rents an unfurnished apartment for $2,000 and is asked to pay last month's rent, the landlord cannot demand any extra amount of security deposit. That's because the cap is one times the rental amount. If the unit is furnished, the cap is twice the rental, and the landlord can add on another $2,000. That could include a key deposit of $100, a pet deposit of $1,000 and a damage deposit of $900.

Note that all fees and deposits that are included in a security deposit under California law are refundable. That is, the tenant has the opportunity to get the money back. Any fees or deposits labeled nonrefundable are illegal and will be tossed out by the courts.

Security Deposit Deductions for Unpaid Rent

If the tenant is asked at the beginning of a tenancy to put down a last month's rent deposit, he is free to rely on this amount to pay the final month's rent. It's important not to forget that the law requires a 30-day written notice to the landlord to end a month-to-month tenancy. Once the tenant, who has paid a last month's rent deposit, gives this notice, he need pay no additional rent. If the tenant's security deposit was not labeled as last month's rent, he cannot use it for rent. He must pay rent for the last month of the tenancy, then wait for the landlord to deal with — and hopefully return — his deposit.

If a tenant owes rent when he vacates the unit, the landlord can use the security deposit to cover that amount. The statute specifically authorizes her to deduct any unpaid rent from the deposit. On the other hand, a landlord cannot use a last-month's rent deposit for anything other than last month's rent. A tenant can make sure this doesn't happen by refusing to pay last month's rent in reliance on that deposit.

Security Deposit Deductions for Damages

The statute also allows a landlord to deduct the cost of repairing damages that the tenant, his pets or his guests did to the premises. There is an important exception to this: If the damage was the ordinary type of wear and tear that would be expected to occur during a tenancy, the landlord cannot deduct for repairing it.

The question of what is ordinary wear and tear and what constitutes improper damages is much debated between landlords and tenants — a few hard and fast rules apply. Generally some carpet wear, floor scuffing and a few tack holes in the walls might be considered ordinary wear and tear. Doors removed, windows broken or gaping holes in the walls might not. When the parties cannot agree, they may need to go to court to resolve the matter.

Security Deposit Deductions for Cleaning

A California landlord is also entitled to deduct funds from the security deposit to cover the cost of cleaning the premises after the tenant leaves. Again, the law has a caveat: The tenant need not leave the property in a cleaner state than it was in when he occupied it. It is a good practice for a tenant to do a walk-through with the landlord before the tenancy begins and to take photos or videos of the state of cleanliness. For example, if all of the appliances are new or spic-and-span clean, the tenant must leave them very clean. If the oven or refrigerator was filthy on move-in, however, the tenant need not clean the appliance when he leaves.

California law requires the landlord to offer to do a walk-through within a few weeks of the final date of occupancy. She must then give the tenant an itemized statement of the repairs or cleaning costs that she intends to use as the basis of deductions from the security deposit. The tenant then has a chance to take care of the items and ensure return of the deposit. The landlord is not permitted to deduct for any repairs or cleaning other than those that were listed in her statement unless the problem was covered up by the tenant during the walk-through.

Security Deposit Return Deadline

The time the landlord has to return the security deposit starts ticking from the final day of the tenancy, which is 21 days. A landlord who isn't going to take any deductions from the security deposit must return 100 percent of it within that period. If she does intend to subtract any unpaid rent, damage repairs or cleaning fees from the deposit, she must give or send to the tenant a written accounting of the deductions within 21 days, together with any remaining part of the deposit.

This written document must include an explanation of why the landlord is keeping all or part of the deposit and also contain an itemized list of the deductions. The landlord must include copies of receipts evidencing the charges if they total more than $126. If repairs are not completed by that point, the landlord can send an estimate of the cost of repairs and forward the receipts within 14 days of completion.