California Security Deposit Law: What You Must Know

Security deposits play a significant role in the rental process, and understanding how they work is essential for landlords and tenants. In California, specific regulations govern security deposits to protect the rights of both parties involved. This article aims to address frequently asked questions regarding security deposits in California, offering clear explanations and advice for both tenants and landlords.

What is a security deposit?

A security deposit is money that the tenant provides to the landlord upon commencing a lease agreement. It acts as a financial safeguard for the landlord in case of damages or unpaid rent resulting from the tenant’s occupancy. The security deposit is typically refundable, provided the tenant fulfills their obligations and returns the property in good condition at the end of the lease.

How do security deposits work?

When a renter pays a security deposit, the landlord holds the funds for the duration of the lease. The landlord is responsible for keeping the deposit in a separate account and providing the tenant with written notification of where the deposit is held. The landlord cannot use the security deposit for personal expenses, and it must be returned to the tenant at the end of the lease, minus any deductions for authorized expenses.

How much should a security deposit be?

California’s allowable security deposit amount hinges on the property’s condition and the tenant’s status.

Unfurnished Properties: Landlords are limited to charging security deposits of no more than twice the monthly rent for unfurnished properties.
Furnished Properties: For furnished units, landlords can collect up to three times the monthly rent as a security deposit. This higher limit accommodates potential damages or wear and tear to the provided furnishings.
Active Duty Military: SB 644 provides special provisions for tenants on active military duty. California law safeguards these tenants, allowing them to break their lease without penalty if they’ve received deployment or permanent change of station orders. When service members present their military orders, landlords are prohibited from imposing security deposits exceeding one month’s rent for unfurnished properties or more than two months’ rent for furnished ones.

Furthermore, Governor Newsom signed AB 12 into law, effective July 2024. This legislation caps security deposits at one month’s rent.

Average Security Deposit

While the maximum security deposit limits are set by law, the actual amount can vary depending on various factors, such as the rental market and the landlord’s discretion. The average security deposit in California typically ranges from one to two months’ rent. Tenants should be aware of the specific terms and conditions regarding the security deposit before entering into a lease agreement.

What can I use the security deposit for?

In California, landlords can use the security deposit for specific reasons. Here are some of the standard charges that a property owner can deduct from the security deposit:

Unpaid rent after the lease ends: If the tenant fails to pay the final month’s rent or any outstanding rent, the landlord can deduct these from the security deposit.
Cleaning fees beyond normal wear and tear: Landlords can charge cleaning fees if the property requires cleaning beyond normal wear and tear. This may include cleaning carpets, removing excessive dirt or stains, or cleaning appliances.
Repairs for damages beyond regular wear and tear: If the tenant has caused damages to the property beyond what is considered normal wear and tear, the property owner can deduct the repair costs from the security deposit. This may include repairing holes in walls, replacing broken windows, or fixing damaged fixtures.
Replacing damaged or lost items provided in the rental agreement: If the tenant has damaged or lost any items that the landlord provided as part of the rental agreement, such as furniture or appliances, the cost of replacing these items can be deducted from the security deposit.

Both landlords and tenants must understand what charges are permissible and maintain clear documentation of the property’s condition at the beginning and end of the tenancy.

Normal Wear and Tear

The security deposit, given by tenants upon lease commencement, serves as a safeguard for landlords. Upon signing the lease, there’s an implicit agreement that the property will be returned in a condition comparable to its initial state, considering normal wear and tear from habitation. The security deposit addresses repair and cleaning expenses if any damages surpass this expected wear and tear.

What is considered normal wear and tear in a rental?

Determining what constitutes normal wear and tear can sometimes be subjective. However, there are certain factors to consider. Normal wear and tear should not be confused with damages caused by tenant negligence or intentional acts. Examples of normal wear and tear include:

Faded or worn-out paint due to regular use and exposure to sunlight.
Minor scuffs or scratches on the floors caused by regular foot traffic.
Slightly frayed or worn-out carpet in high-traffic areas.
Loose or squeaky doorknobs resulting from regular use.
Faded curtains or blinds due to exposure to sunlight.

Landlords and tenants must conduct a thorough move-in and move-out inspection to document the property’s condition and agree on normal wear and tear.

However, understanding what constitutes wear and tear might evolve as time progresses.

Example – Normal wear and tear after five years?

After five years of living in a property, you might notice some changes. The paint might fade noticeably, doors begin to sag slightly, and carpets could show defined wear patterns. These are all considered normal wear and tear. In areas with high humidity or fluctuating temperatures, it’s common for paint to peel, especially after five years. These types of deterioration are typically expected after such a period.

Example – Normal wear and tear after ten years?

After a decade, a property inevitably shows signs of aging. By this point, wear and tear become significantly more evident. Carpets may require replacement, wooden floor finishes might exhibit noticeable wear paths, and fixtures such as faucets may appear outdated. Additionally, certain types of wood tend to darken over time, particularly with prolonged exposure to sunlight. These color changes are typical of wear and tear over ten years.

What is helpful life?

Useful life refers to the expected duration that certain items or fixtures within a rental property should last before requiring replacement. For example, carpeting typically has a useful life of 10 years. If the tenant damages the carpet beyond normal wear and tear, the landlord may deduct the prorated cost of replacing it based on its remaining useful life.

How do I inform the tenant of their charges?

After assessing the property and completing necessary repairs, you must invoice the former tenant. If the charges exceed $125, you must provide an itemized receipt detailing expenses and invoices from contractors used, explaining each charge. It is advisable to take photos of the apartment before and after the tenant’s occupancy. This documentation is evidence of disputes regarding damages, particularly concerning carpets.

Within 21 days of the tenant’s move-out, you must return the remaining or total deposit along with the invoice and a breakdown of charges. Failure to do so may result in the return of funds or potential legal action in small claims court.

What happens if the task cannot be finished within 21 days

If the necessary repairs or cleaning cannot be completed within the 21-day timeframe, the landlord should still provide the tenant with an itemized statement as soon as possible. In such cases, the landlord may estimate the costs and provide a good-faith estimate of the charges. However, the final statement must be provided once the work is completed, and any difference in the estimated and actual costs should be reconciled accordingly.

Can I charge a pet deposit, too?

A pet deposit can be included as part of the total deposit to cover potential damage from pets living in the home rather than as a separate deposit. This ensures that the deposit can be used for any damages, not just those related to pets. For instance, if the security deposit is $1,000 and the pet deposit is $300, the total deposit would be $1,300. Pet deposits typically range from $200 to $500.

The combined total of the security deposit and any pet deposit cannot exceed certain limits. For unfurnished rentals, this limit is usually twice the monthly rent; for furnished rentals, it’s typically three times the monthly rent. For example, if the rent is $1,000 monthly, the total deposit cannot exceed $2,000 for unfurnished or $3,000 for furnished. It’s important to note that there’s a distinction between pets and service animals. Rent cannot be charged for service animals.

Security Deposit California law

California Governor Gavin Newsom signed Assembly Bill 12, which limits security deposits to one month’s rent. The new law, Effective July 1, 2024, is designed to increase housing affordability. Before this legislation, landlords could require up to three months’ rent as a security deposit. This often burdens renters financially, particularly in cities like Los Angeles and San Francisco, where median rents are high.

Normal Wear and Tear California

In California, “normal wear and tear” refers to the natural physical deterioration that occurs over time with regular use of a rental property, even when tenants are careful and responsible. A rental property will undergo changes after a tenant moves out due to the typical effects of aging and everyday living.

Examples of normal wear and tear in California may include:

Curtains, paint, or wallpaper fade due to sunlight exposure.
Minor scuffs or marks on walls.
Carpet showing natural wear or slight dirtiness.
Small nail holes or minor dents from picture hangings.
The doors are sticking out due to humidity.
Worn-out gaskets on refrigerator doors.
Faded paint or wallpaper.
Loose hinges or handles on doors or cabinets.

However, damage caused by tenant carelessness, misuse, or abuse by their guests is not considered “normal wear and tear.” This might include:

Large holes in walls.
Stains in the carpet from pets or spills.
Broken windows or damaged blinds.
Damaged or missing appliances are provided with the rental.

It’s important to distinguish between “normal wear and tear” and damage in California, especially concerning security deposits. Landlords are prohibited from withholding any portion of a security deposit to repair normal wear and tear issues. However, they are allowed to deduct amounts for repairing actual damages caused by the tenant, unpaid rent, or cleaning costs to restore the unit to its original condition.

What occurs if a landlord fails to refund the security deposit within 21 days in California?

If a landlord doesn’t return the security deposit or furnish an itemized statement of deductions within 21 days, they could face penalties. In California, tenants can take legal action against the landlord to recover their security deposit. If the court determines that the landlord unlawfully retained the deposit, the tenant might be eligible to receive not only the complete deposit but also additional damages.

FAQs

Can a landlord in California require last month’s rent and a security deposit?

Yes, a landlord can request the last month’s rent in addition to the security deposit. However, the last month’s rent cannot be used as a security deposit and must be returned to the tenant at the end of the lease.

Can a landlord charge non-refundable fees in addition to the security deposit?

Yes, landlords in California are allowed to charge non-refundable fees, such as application or pet fees, in addition to the security deposit. However, these fees must be clearly stated in the rental agreement and cannot be deducted from the security deposit at the end of the tenancy.

Can a landlord increase the security deposit during the lease term?

No, once the security deposit amount is established at the beginning of the lease, the landlord cannot increase it during the lease term unless both parties agree in writing to the change.

Can a tenant use the security deposit as the last month’s rent?

No, the tenant cannot use the security deposit as per last month’s rent. It is a separate amount to cover any damages or unpaid rent beyond normal wear and tear.

What happens if the tenant disagrees with the deductions from the security deposit?

If the tenant is not in agreement with the deductions taken from the security deposit, they have the option to convey their concerns to the landlord. If the issue cannot be resolved amicably, the tenant may pursue legal action or mediation to resolve the dispute.

Are there any exceptions to the security deposit limits in California?

Yes, there are exceptions to the security deposit limits for certain housing types, such as government-subsidized housing, nonprofit housing cooperatives, and housing for the elderly or disabled. It’s crucial to refer to the precise laws and regulations that pertain to these exceptions.

Conclusion

Understanding the regulations and guidelines surrounding California security deposits is crucial for tenants and landlords. Both parties can navigate the rental process with transparency and confidence by being aware of the maximum deposit limits, the allowed uses of the security deposit, and the timeline for its return. If any disputes arise, seeking legal advice or mediation is advisable to ensure a fair and equitable resolution for all parties involved.

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