In California, landlords may collect up to two month’s rent for a security deposit for an unfurnished unit and three month’s rent for a furnished unit. Cal. Civ. Code §1950.5. Because a tenant’s security deposit amount can be substantial, tenants need to take pro-active steps to ensure they get all of their deposit back from their landlord after they move out.
Do a Move-In Inspection
Before moving in, tenants should do a walkthrough of the unit to document any areas of damage and deterioration. Sometimes the landlord will provide the tenant with a move-in sheet to make a record of the conditions and require the tenant to return it within a few days. If the landlord does not provide a move-in sheet, tenants should create one of their own to describe the pre-existing issues, and they should take photographs and video on their phone. The results should be provided to the landlord within a few days of moving in. The initial move-in inspection will give both the landlord and tenant a record of the exact condition the unit was in at the beginning of the tenancy.
Promptly Report Needed Repairs to Your Landlord
Tenants can be held responsible for damages that are the result of the tenant’s negligence. It is important for you to immediately notify your landlord in writing of any items that need repair during the tenancy. If you fail to timely notify your landlord of a condition that needs repair and the condition worsens over time causing extensive damage, the landlord may attempt to hold you liable for the repair cost.
Do a Move-Out Inspection
A tenant is entitled to request a move-out inspection. Cal. Civ. Code §1950.5(f). This should take place no sooner than two weeks before you move out. Id. An inspection is meant to provide you with the opportunity to fix any issues before you vacate that were highlighted by the landlord during the walkthrough.
Once the unit is empty and has been cleaned, you should do a final walkthrough, taking pictures and videos, to document the final condition of the unit, which you can use as evidence later if a dispute arises.
Damage vs. Wear and Tear
Most disputes regarding security deposits are over what constitutes damage vs. normal wear and tear. Only the cost for damages caused by a tenant may be deducted from a security deposit. A repair issue warranting a deduction is typically damage that was avoidable and negligent, and not due to simply living in or using the property. “Ordinary or normal wear and tear” cannot be deducted from your deposit. Generally, “wear and tear” is considered to be the unavoidable deterioration of a unit resulting from normal use by the tenant. For example, a carpet worn thin due to normal foot traffic is ordinary wear and tear, while a cigarette burn in the carpet is preventable negligence that a tenant will be responsible for.
Your Landlord Has Twenty-One Days to Return Your Security Deposit
Within twenty-one days after you vacated, your landlord must either return all of your security deposit or send you a letter telling you why they are not giving some or all of it back. Cal. Civ. Code §1950.5(g). If the claimed damages cannot be repaired within the twenty-one day window, your landlord can send you a good faith estimate of the cost of repairs. Id. Your landlord must send you the final receipts within fourteen days of the repairs being completed. Id.
Many courts ignore the twenty-one day requirement, and your landlord violating this section of the law does not mean that you will automatically be entitled to the return of your full deposit. But, your landlord not adhering to the twenty-one day requirement may go to show “bad faith” on their part that could entitle you to additional damages if you need to sue them for the return of your deposit.
What Should a Tenant Do if Their Landlord Does Not Return the Security Deposit?
Write a letter to your landlord to demand your deposit back.
If your landlord has failed to contact you within twenty-one days of you moving out or your landlord has sent you an itemized list of deductions that you do not agree with, write your landlord a letter disputing the alleged damages and demand your security deposit back.
First, review each item the landlord has deducted from your deposit to determine if the item is the result of damage caused by you or if the condition is the result of “wear and tear”. If the item is the result of normal wear and tear, the landlord may not deduct from your security deposit. If the item is a damage caused by you, the landlord may deduct from your security deposit to repair or replace the item.
Next, if the item is a damage caused by you, determine how much of the cost you are likely responsible for. A common calculation is to prorate the total cost of the repair/replacement so that you pay only for the damage caused to the remaining “useful life” of the item. For example, generally, carpet has a useful life of approximately ten years. If a tenant moved out after five years and caused damage to the carpet beyond ordinary wear and tear that necessitated repair or replacement, the tenant is likely to be responsible for only half the repair/replacement cost.
Last, determine how much of your deposit you are entitled to receive back and give your landlord a deadline to return it. If your landlord fails to return the deposit by the deadline, you will need to sue them for its return.
Sue your landlord for your security deposit back.
If you and your landlord are unable to come to an agreement regarding the return of your security deposit, the next step is for you to sue your landlord for its return. You will need to file your lawsuit in the county where the rental unit is located. If your security deposit was less than $10,000, your remedy is to file your lawsuit in small claims court. If the deposit was more than $10,000, which exceeds the small claims court maximum, you should contact a tenant attorney to help you.
When your security deposit is kept by your landlord in “bad faith”, you may claim not only your deposit back but also punitive damages of up to two times the deposit. Cal. Civ. Code §1950.5(l). Landlords have the burden of proof to show that the amount they withheld was reasonable and allowed.
Tenants should be aware that if they sue their landlord, the landlord can bring a cross claim against the tenant for additional damages in excess of the security deposit amount.
Before filing any lawsuit against your landlord, you should consult with a tenant attorney to understand your rights and to determine if you may have additional claims against your landlord beyond the return of your security deposit.
What Happens to Your Security Deposit When You Break Your Lease?
If you break your lease without a legal basis, your landlord may keep your security deposit for unpaid rent. In some instances, a tenant may have a reason to break a lease without consequence or penalty. Tenants who are planning to break their lease should first consult with a tenant rights lawyer before notifying their landlord.
Your Security Deposit and Roommates
Roommate situations can be complicated. If the roommates all signed one lease for the unit and only one of the roommates moves out, the landlord does not have to return the security deposit until all the tenants on the lease move out. Because the landlord does not have to return the vacating roommate’s share of the deposit, it is a good idea for co-tenants to create a written roommate agreement at the beginning of the tenancy to address situations such as how to handle the security deposit if one roommate wants to leave.
Commercial Tenant Security Deposits
Commercial security deposits differ greatly from residential security deposits. Commercial tenants should read their lease contracts closely. With some limited exceptions, there are no restrictions on how much a commercial landlord can charge for a security deposit.
If a deposit was used to cover only defaults in the payment of rent, the timeline to return the balance depends on whether the deposit covers more or less than one month’s rent. Cal. Civ. Code § 1950.7. If the deposit covers no more than one month’s rent, the balance should be returned to the tenant no later than thirty days after the landlord has possession of the property. Id. If the deposit covers more than one month’s rent, the balance should be returned to the tenant within two weeks after the landlord has possession of the property. Id.
Commercial landlords are not required to provide an itemized statement of deductions within twenty-one days. If the only deductions are for damages and not for a default in rent payment, the balance must be returned to the tenant no later than thirty days after the landlord has possession of the premises. Id.
If a commercial tenant sues for their deposit and has a claim against their landlord for “bad faith” retention, the landlord may be liable to the tenant for up to $200, plus any actual damages. Id. Residential and commercial security deposit returns are not always straightforward. Please call (415) 504-2165 to speak to one of our tenant attorneys about your specific security deposit issue.