A landlord seeks a security deposit from a new tenant to cover any amounts the tenant might owe when she leaves the unit, including back rent. In cities where residential units exceed tenants, the market itself limits what a landlord can ask. But in markets where housing is tight, like most of urban California, tenants rely on state laws to provide an equitable structure for the amount, use and return of security deposits. The landlord's ability to get back-up protection from a tenant can be even more restricted by municipal rent control ordinances.
What Is a Security Deposit?
In general, a security deposit is money a landlord requires a new tenant to give him, other than money for current rent. It is held as security in case the tenant leaves the unit owing money to the landlord. Under California law, all money a tenant must give to a landlord at the beginning of a tenancy, other than current rent, is classified as a security deposit. That means that it is subject to state laws regarding security deposits, including caps, the prohibition on nonrefundable deposits and the procedure for return.
Read More: California Security Deposit Law: A Guide for Landlords & Tenants
What Is the Cap on Security Deposits?
California state law caps the maximum amount a landlord can take in security deposits at a multiple of the unit's monthly rental amount. For unfurnished units, that cap is twice the monthly rent; for furnished apartments, it is three times the monthly rent. However, members of the armed forces have lower maximum caps. For unfurnished units, a landlord cannot take a security deposit greater than one month's rent from a tenant who is a member of the armed forces. For furnished units, the amount is two times the monthly rent.
Is Last Month's Rent a Security Deposit?
All money other than current rent that a new tenant gives a landlord is included in the security deposit cap and subject to security deposit laws. That includes a deposit for last month's rent. So if a tenant with an unfurnished unit pays $1,200 a month rent, the maximum security deposit will be $2,400. A last month's rent deposit would be $1,200, so all remaining deposits would have to total $1,200 or less to be legal.
A tenant is usually obligated to give the landlord 30 days' notice before ending the tenancy. If she fails to do so, she still owes rent for that period, and the landlord can apply the last month's rent deposit to that amount. If she does give the landlord 30 days' notice, she need not pay rent for that period if she put down a last month's rent deposit. A landlord who seeks a deposit for last month's rent cannot use that deposit for anything other than last month's rent. The tenant can enforce this herself by refusing to pay any new rent for the final 30 days of her tenancy.
Can Unpaid Rent Be Deducted From Security Deposits?
Many times a tenant is not asked to put down a last month's rent deposit. Instead, the landlord asks her to pay one general security deposit. The landlord can then use the security deposit to pay any expense permitted under law, including unpaid rent. So, if that tenant fails to pay last month's rent or was short on rent once or twice during the tenancy, the landlord can recoup his losses by deducting these unpaid rental amounts from the general security deposit.
Can Security Deposits Be Used to Repair Damages?
Under California law, a landlord can use a security deposit to repair any damage a tenant does to the rental property that doesn't come within the category of ordinary wear and tear. However, a landlord can use the security deposit to repair damage that exceeds normal wear and tear. This might include broken windows, big holes in the walls or mature fruit trees cut down in the back garden.
Consider a family who lives in a rented unit for 10 years. Even the most careful tenants are going to wear down the carpets during that time and perhaps scuff the wooden floor. The paint will likely be faded, and the appliances a little scratched. But that is the normal and natural result of having tenants in a unit for 10 years, and a California landlord is considered compensated for that by the monthly rent.
Can Security Deposits Be Used for Cleaning?
In California, a departing tenant is obligated to leave the premises as clean as it was when she arrived. But she is not obliged to leave it cleaner. It is a good idea for both parties to take photos or videos right before the tenant moves in as solid evidence of the state of the unit. If the tenant leaves it much dirtier than it was when she moved in, the landlord can deduct the cost of cleaning from the tenant's security deposit.
When Does the Landlord Return the Deposit?
The landlord has 21 days from the day the tenant vacates to determine whether to take deductions from the security deposit. If he does not withhold any of the deposit for unpaid rent, damages or cleaning, he must return the entire amount of the deposit to the tenant within that period.
If the landlord deducts amounts from the deposit, he must send the tenant an accounting within 21 days of move-out, together with the remainder of the security deposit. The accounting must list the types of deductions made. In the case of deductions for unpaid rent, the landlord must set out the periods for which the rent was unpaid and the amounts owing.
For repairs and cleaning, the landlord must specify the work done and provide copies of receipts and invoices for the work. If the landlord has not been able to complete the work, he must provide an estimate of the cost. When the work is completed, he must forward a final accounting to the tenant together with copies of the final receipts and invoices.