Landlord treatment of tenant security deposits

What are some reasons for withholding all or a portion of a tenant’s security deposit?

Primarily the security deposit is withheld to pay for payment of expenses related to physical damage by the tenant which includes certain repairs other than normal wear and tear which are the landlords’ responsibility. The security deposit may also be held to satisfy non-payment of rent or a tenant balance when they vacate. Many times tenants do not thoroughly clean the unit when they vacate, the expense of cleaning a rental unit when a tenant moves out can be charged to the tenant’s security deposit, but only to make the unit as clean as it was at move-in.

What are the details relating to collecting and returning a tenant’s security deposit?

For a residential dwelling, the maximum security deposit that can be collected by a landlord is equal to Two (2) months’ rent for unfurnished dwellings; Three (3) months’ rent if furnished dwellings. There is no statute in CA that requires a separate account for security deposit funds. In CA there is a 21-day deadline for a landlord to return a security deposit refund. An exception can be made if an estimate of work can be delivered to the tenant at 21 days rather than the refund. However,  the estimate must indicate and be the result of repairs that are still ongoing or if the Landlord does not have all of the repair invoices in their possession at the 21-day mark. It is worth noting that you may not take a ‘non-refundable deposit of any kind regardless of how you label it. All security, pet, and cleaning deposits are considered refundable. If you choose to take additional funds from a tenant for poor credit, you are better off increasing the security deposit than collecting last month’s rent.  A bad faith claim or retention by a landlord may subject the landlord to statutory damages of up to twice the amount of the security, in addition to actual damages. Written Description/Itemized List of Damages and Charges is only required if the total expenses are greater than $125.

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