Tenant Security Deposits: 5 Tips For Success

Security deposits present a common frustration among landlords and tenants alike. The rental laws in California tend to favor tenants over Landlords, and security deposits arenโ€™t an exception. Many consider California Civil Code Section 1950. 5 to be ambiguous. Hopefully, this will help clear up some confusion.

1.) At the outset of a new tenancy, get started on the right foot by conducting a walk-through of the premises. Providing new tenants with an inventory checklist will help document the unitโ€™s condition prior to occupancy. This is a simple form with two columns: conditions upon move-in, and conditions upon move-out. When the tenancy is terminated both parties will be well served by completing this simple before and after document.

2.) The maximum deposit that can be collected for unfurnished units is equal to two months of rent, and the deposit cannot exceed three months of rent for furnished units. Additional deposits can be collected to protect against damage caused by pets, but non-refundable pet fees are illegal in California. Security deposits must be refunded within 21-days of a tenant moving out, and providing a final itemized statement breaking down any deductions is a must. Also, remember to provide supporting documentation for any work performed post tenancy.

3.) Both parties must be reasonable. Thatโ€™s the primary determinant of financial responsibility for the unitโ€™s condition, meaning that crystal clear communication is key. Do the walls need to be completely repainted after a year? That would be considered unreasonable therefore making it the tenantโ€™s responsibility. Does the carpet need to be replaced after only two years? Again, unreasonable. A simple proration is a solution. Itโ€™s generally acceptable for the paint to last about three years, and carpeting to last about five to seven years.

4.) The civil code clearly states that “cleaning of the premises upon termination of the tenancy is necessary to return the unit to the same level of cleanliness it was at the inception of the tenancy.โ€ This is not a wear and tear issue, and therefore the duration of your tenantโ€™s residence is irrelevant when it comes to cleaning.

5.) Personal items left behind? The laws in different areas vary, so contact your local city hall โ€” itโ€™s worth the time on hold. Itโ€™s generally recommended to issue written notice clearly outlining a description of the items, the location where they will be stored, if possible an approximate value, and the legal deadline for retrieval.

If you need help with ideas to maximize the value of your property or would like quality representation to help you get the most value for your real estate when selling, feel free to contact us!

Lucrum Real Estate Group provide the quality representation you deserve and personalized commercial and luxury real estate advisory and sales services.

By: JP Vines
January 20, 2021

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