The California Civil Code, Chapter 2, Section 1950.5 governs the rights of landlords and tenants with regard to collecting, using and refunding security deposits for residential rental agreements.
Lawful Use of Security
“Security” means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in the section California Tenant Application Screening Fee Laws, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
- The compensation of a landlord for a tenant’s default in the payment of rent.
- The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
- The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy.
- To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
Maximum Amount of Security
A landlord may not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months’ rent, in the case of unfurnished residential property, and an amount equal to three months’ rent, in the case of furnished residential property, in addition to any rent for the first month paid on or before initial occupancy.
Note: This does not prohibit an advance payment of not less than six months’ rent if the term of the lease is six months or longer. This also does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant.
Nonrefundable Security is Prohibited
No lease or rental agreement may contain a provision characterizing any security as “nonrefundable.”
Security is Protected from Landlord Creditors
Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
Landlord Claim Against Security
The landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in the subsection Lawful Use of Security. The landlord may not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
Tenant May Request End of Lease Inspection of Premises
Within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of his or her option to request an initial inspection and of his or her right to be present at the inspection. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises.
Tenant May Request Beginning of Lease Initial Inspection
The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time.
48 Hour Advance Written Notice Required for Initial Inspection
The landlord shall give at least 48 hours’ prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew his or her request for the inspection.
Written notice by the landlord shall contain, in substantially the same form, the following:
“State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.”
Itemized Statement of Proposed Deductions
Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to the subsection Lawful Use of Security. This statement shall also include the texts of paragraphs (1) to (4) of the subsection Lawful Use of Security. The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
Tenant Right to Remedy Deficiencies
The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
Note: Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement that were not cured by the tenant and for anything else permissible under this section that occurs between completion of the initial inspection and termination of the tenancy or was not identified during the initial inspection due to the presence of a tenant’s possessions.
Deadline for Returning Security
No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under the section California Tenancy Termination Notice Requirements, the section California Landlord Reasons for Eviction of Tenant, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by the subsection Landlord to Include Documents Showing Charges to an email account provided by the tenant.
Landlord to Include Documents Showing Charges
Along with the itemized statement, the landlord shall also include copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
- If the landlord or landlord’s employee did the work, the itemized statement shall reasonably describe the work performed and include the time spent and the reasonable hourly rate charged.
- If the landlord or landlord’s employee did not do the work, the landlord shall provide a copy of the bill, invoice, or receipt supplied by the person or entity performing the work and include the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
- If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may provide a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
If a Repair Cannot be Completed in 21 Days
If a repair to be done by the landlord or the landlord’s employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlord’s possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlord’s possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in the subsections Deadline for Returning Security and Landlord to Include Documents Showing Charges.
Exception to Having to Show Documents
The landlord need not comply with the subsections Landlord to Include Documents Showing Charges and If a Repair Cannot be Completed in 21 Days if either of the following applies:
- The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
- The tenant waived the rights specified in the subsections Landlord to Include Documents Showing Charges and If a Repair Cannot be Completed in 21 Days. The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under the section California Tenancy Termination Notice Requirements has been given, a notice under California Landlord Reasons for Eviction of Tenant has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall also substantially include the text of the subsection Landlord to Include Documents Showing Charges.
Tenant May Request to See Documentation of Charges
Notwithstanding the subsection Exception to Having to Show Documents, the landlord shall comply with the subsections Landlord to Include Documents Showing Charges and If a Repair Cannot be Completed in 21 Days when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in the subsection Deadline for Returning Security. The landlord shall comply within 14 calendar days after receiving the request from the tenant.
Note: Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
Penalty for Landlord Noncompliance
The bad faith claim or retention by a landlord or the landlord’s successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement security, may subject the landlord or the landlord’s successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages.
Court May Impose Damages without Requested Relief
The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlord’s successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
Note: The requirements of this section do not apply when the tenancy is terminated for non default of rent reasons pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
Amended by Stats. 2013, Ch. 76, Sec. 12. (AB 383) Effective January 1, 2014.
Also see California Security Deposit Transfer when Landlord Sells Property.
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