Security deposits are an essential component of the whole rental process, in California and all other states. As a landlord, you need protection in the event that a tenant somehow damages your property. They might also skip out on the last month’s rent when they’re planning to relocate. You might not be fully compensated for any losses you take, but the security deposit does provide some measure of financial relief. There are some very specific laws regarding the usage of security deposits, and when they must be returned to the tenant. Here are some of the most important California laws and guide for California landlords.
Setting the security deposit
It is allowable to set your security deposit at two months’ rent for an unfurnished apartment, and three months’ rent for a furnished one. You can make the deposit the maximum allowable by law, but you cannot make it non-refundable. It’s best if you keep the security deposit money in an interest-bearing account for a couple reasons. First, it benefits you personally, and secondly, there are some municipalities where you’d be obliged to return that interest earned to the tenant. It goes without saying that you should not spend the security deposit, because it may be hard to produce it later on. You can find more property management in San Diego California and guide for California landlords help by contacting Sunset Property Management.
Using a security deposit
According to California state law, there are four general reasons that a landlord would be allowed to go ahead and use a security deposit:
- Replacing furniture – if furniture has been damaged beyond simple repair, the security deposit can be used to replace it. Likewise, if any other element of the unit has been damaged past normal wear and tear, it can be restored or replaced with the security money.
- Post-occupant cleaning – when the tenant moves out, the unit should be thoroughly inspected for damages and cleaning requirements. If it is necessary to hire professional cleaners to restore the unit to its pre-rental condition, security money can be used for this.
- Unpaid rent – in situations where the occupant failed to pay at least one month’s rent, the deposit can be used to cover the rental charge. If the unpaid rent amount is greater than the security deposit, you would have the option of legally pursuing the former tenant.
- Damage repairs – the deposit can also be used to cover the cost of damages incurred during the tenant’s residence. It may be necessary to prove that the damages actually occurred during this time frame. That’s why it’s a good idea to take before and after pictures between tenants.
The security deposit itself serves as a kind of protection for a landlord, but it’s wise to take it a step further. Make sure you document everything in the lease itself, so there are no misunderstandings or disagreements about the security deposit. Keep all receipts of any maintenance, repair work, or cleaning that was done after the tenant vacated. Following their departure, you’ll have just 21 days to either return the full amount of their security deposit, or to prove to them why it was necessary to spend some or all of the money.