The Basics of Refunding Security Deposits

12 Sep The Basics of Refunding Security Deposits

According to the California Department of Consumer Affairs, the number one disagreement between landlords and tenants comes after the tenant vacates the property.  The most common subject of that disagreement?  Refund of the security deposit.

California law allows landlords to use a tenant’s security deposit for one of four things:

1. Unpaid rent.
2. Cleaning – but only to return the unit to the condition the property was in upon move-in.
3. Repair of damages caused by the tenant or the tenant’s guests beyond normal wear and tear.
4. And – only if the lease or rental agreement specifically stipulates – for restoration or replacement of furniture, furnishings, or other items (e.g. keys) beyond normal wear and tear.

Under California law, within 21 calendar days of the tenant’s vacancy, the landlord must send a full refund of the security deposit or provide an itemized statement of deductions from the security deposit with a refund for the remainder.  Furthermore, the landlord must also provide copies of receipts (or good-faith estimates) for any repairs or cleaning necessary to bring the rental property back to the “original” move-in condition.  All supporting documentation must describe the work, time spent, and hourly rate (the hourly rate must be reasonable).  If estimates were provided initially, a tally of the final costs and any amount remaining should be sent to the tenant within 14 calendar days.

If a former tenant disputes the charges, the most prudent course of action is to review objectively and respond quickly.  A steady flow of communication goes a long way.  Know what the law allows and doesn’t allow, and you’ll avoid unnecessary disagreements.

For more information about this and other landlord/tenant subjects, visit the California Department of Consumer Affairs website at http://www.dca.ca.gov.