A security deposit is any money a landlord takes from a tenant other than the advance payment of rent. The security deposit serves to protect the landlord if the tenant breaks or violates the terms of the lease or rental agreement. It may be used to cover damage to the property, cleaning, key replacement, or back rent.
Note: If you paid as part of your security deposit an amount that was designated in the lease or rental agreement as “last month’s rent,” that amount may be used for your last month’s rent. Other forms of security deposit cannot be used to pay your last month’s rent unless the landlord specifically agrees to allow it.
There are limits on the amount of the security deposit:
- If the security deposit is for a residential property without furniture, the security deposit may equal 2 times the rent.
- If the residence is furnished, the landlord may charge up to 3 times the rent.
- There is no restriction on the amount of the security deposit for the rental of a commercial property.
Cases seeking return of a security deposit are usually handled in small claims court. They cannot generally be dealt with in an eviction (unlawful detainer) case since, in an eviction, possession of the property is still at issue.
Return of security deposit
After a tenant moves out, a landlord has 21 days to:
- Return the tenant’s deposit in full, or
- Mail or personally give to the tenant:
- A written letter explaining why he or she is keeping all or part of the deposit,
- An itemized list of each of the deductions,
- Any remaining refund of the tenant’s deposit, and
- Copies of receipts for the charges/deductions, unless repairs cost less than $126 or the tenant waived (gave up) his or her right to get the receipts. If the repairs cannot be finished within the 21-day period, the landlord can send the tenant a good faith estimate of the cost of repairs. Then within 14 days of the repairs being done, the landlord must send the tenant the receipts.
A landlord can deduct from the tenant’s security deposit:
- The cost of fixing any damages to the property caused by the tenant or the tenant’s guests. This does not include ordinary wear and tear.
- The cost of cleaning the unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in (less reasonable wear and tear).
- Unpaid rent (including rent owed if the tenant does not give the landlord the proper notice that he or she is moving out).
The landlord can withhold from the security deposit ONLY those amounts that are necessary and reasonable, and NOT a result of “ordinary and reasonable wear and tear.” For example, a landlord may not make tenants pay for painting, new carpets, or curtains unless they are damaged beyond ordinary and reasonable wear and tear. And the landlord cannot use the tenant’s security deposit to repair problems that existed in the unit before the tenant moved in.
Note: If the rental is sold while the tenant still lives there, the landlord is supposed to transfer the security deposit to the new owner, and the new owner is supposed to refund all of the deposit, or the portion that the tenant is entitled to, when he or she moves out. If the previous owner fails to transfer the security deposit to the new owner, the tenant can sue the prior owner for its return, or for the portion that the tenant is entitled to receive.
Security Deposit Disputes
If a landlord does not return the entire amount of the tenant’s security deposit within the 21 days required by law, and the tenant disputes the deductions from the deposit:
- The tenant can write a letter to the landlord explaining why he or she believes he or she is entitled to a larger refund. The tenant should keep a copy of the letter for his orher records.
If the tenant and landlord cannot reach an agreement on the amount of the security deposit returned, the tenant can file a lawsuit against the landlord for return of the security deposit. The tenant can sue for:
- The amount of the deposit, plus
- Twice the amount of the security deposit in damages. The judge may give the tenant these additional damages if the landlord retained the deposit in bad faith.
The tenant can sue the landlord in small claims, which is informal and inexpensive, as long as the total amount sued for is $10,000 or less.
The tenant and landlord can also try a local consumer mediation program to see if they can resolve their dispute out of court.
Avoiding security deposit disputes
Keeping records of the condition of the rental property
Tenants should photograph the condition of the rental unit when they move in and when they move out. This will help to prove that they did not damage the property.
Tenants can also request a walk-through with a checklist that the tenant and the landlord complete when the tenant moves in and when he or she moves out. This checklist is used to identify any problems with the unit. The tenant is entitled to receive a copy of the checklist.
Giving the landlord notice of intent to move out
If you are the tenant and intend to move out (and you pay rent once a month), you have to give your landlord 30 days’ notice in writing. If you do not, the landlord can charge you for the unpaid rent even after you move out. Unless a new tenant pays the rent, you will have to pay for those 30 days. If you pay rent every week, you have to give 7 days’ notice.
If your lease is not up yet and you want to move out, you will need to talk to your landlord. If your lease or your landlord allows you to sublet the unit, you can find a subtenant, following the landlord’s or the lease requirements. Or, the landlord may allow you to let someone else take over your lease, and give you back your deposit and take a new security deposit from the person taking over the lease.
BUT if your landlord does not agree to let you off the lease early or to sublet the unit, and you still break the lease, you may be liable to the landlord for the rent through the end of the lease. The landlord will have a “duty to mitigate,” which means that he or she will have to make reasonable efforts to re-rent the unit and if he or she is able to rent it, you are only liable for rent for the month(s) it went unrented. If you end up owing the landlord rent for breaking the lease early, he or she may take it out of your security deposit.
Roommate situations are complicated. It is important that your rental agreement specifies each roommate’s rights and responsibilities.
If only 1 roommate is moving out and the person moving out paid the deposit to another roommate, that roommate has to return the deposit. If the person moving out gave the deposit to the landlord, and the landlord has a separate rental agreement with the roommate moving out, the landlord returns the deposit. If, however, the roommates all signed 1 rental agreement for the unit and only 1 of the roommates moves out, the landlord does not have to return the security deposit until all the roommates have left.
from California Courts