Top Five Benefits of California’s Security Deposit Law

According to the United States Census Bureau, 45.18% of California households are occupied by renters. With a population of 39.56 million people in 2018, this means that approximately 17.87 million Californians are renters.

Unfortunately, far too few renters are aware of California state tenant laws—particularly when it comes to security deposits.  Indeed, at some point during their time as renters, many California tenants will experience some trouble getting a full return of their security deposit from a landlord.

It doesn’t have to be this way!  California’s security deposit law favors renters.  For example, it penalizes landlords for up to twice the amount of any portion of a security deposit wrongfully withheld.

Here are five important facts all California tenants should know about their residential security deposits:

1. Residential Security Deposit Limited to Two or Three Months’ Rent. For an unfurnished residential rental unit, a landlord cannot demand a security deposit in an amount in excess of two months’ rent.  For a furnished residential rental unit, a landlord cannot demand a security deposit in an amount in excess of three months’ rent.  A landlord may require payment of the first month’s rent separate and apart from the security deposit prior to move-in.

Example:

You just signed a lease for an apartment for which you will pay $1,750.00 per month in rent.  If the apartment is unfurnished, the maximum security deposit your landlord can request is $3,500.00 ($1,750.00 × 2).  If the apartment is furnished, the maximum security deposit your landlord can request is $5,250.00 ($1,750.00 × 3).

2. Tenants Are Responsible for Repairs Beyond Ordinary Wear and Tear Only. When a tenant returns possession of the rental property to a landlord, the tenant is responsible for returning it in the same condition in which the tenant received it LESS “ordinary wear and tear.” 

In other words, the landlord must pay all costs associated with remedying normal wear and tear. Reasonable people can disagree as to what does and does not constitute normal wear and tear, which in turn determines who is financially responsible for the repairs.

Example:

Although the California security deposit law does not specifically define “ordinary wear and tear,” the discoloring of paint, wearing down of rugs, minor scratches, and nicks on walls and countertops, etc. likely constitute normal wear and tear, making the landlord financially responsible.

A large gaping hole in the wall caused by a rowdy friend at a party or a broken window caused by a toddler throwing a baseball through it likely does not constitute normal wear and tear, making the tenant financially responsible.

3. Return of Security Deposit Due After Twenty-One Days. California security deposit refund law favors renters! A landlord must return any remaining portion of a residential security deposit no later than twenty-one calendar days (i.e., three weeks) after the tenant has moved out of the rental unit.  Moving out means returning possession to the landlord, which in most cases means returning the keys.

Example:

You return the keys to your rental unit to your landlord on October 31.  Your security deposit was $2,500.00. 

On or before by November 21, your now-former landlord must either return your $2,500.00 security deposit in full or provide a copy of an itemized statement indicating the basis for, and the amount of, any deductions from this security deposit plus any remaining balance.

4. Landlord Must Return List of Itemized Deductions. No later than twenty-one calendar days (i.e., three weeks) after the tenant has moved out, the landlord must provide the tenant, by personal delivery, by first-class mail, or by email (if the landlord and tenant agree to email).

(1) a copy of an itemized statement indicating the basis for, and the amount of, any security deposit received and the disposition of the security deposit, and (2) any remaining portion of the security deposit.

Example:

Using the previous example of an October 31 move out date, your now-former landlord must either personally deliver or mail to you via USPS First Class Mail your $2,500.00 security deposit in full or a copy of an itemized statement indicating the basis for, and the amount of, any deductions from your security deposit plus any remaining balance by November 21.  Your landlord can email this information to you if you had agreed to communicate via email. 

[Note: This is why it is so important to provide your landlord with a new mailing address at the time you notify him of your intent to end your tenancy.]

5. Your Landlord Must Pay a Penalty of Twice the Amount of Any Portion of a Residential Security Deposit Wrongfully Withheld. The bad faith retention by a landlord of the security deposit or any portion thereof can subject the landlord to statutory damages of up to twice the amount of the security deposit, in addition to actual damages (including the portion of any security deposit retained in bad faith).  It is this provision of the law that makes California tenant deposit refund rights especially strong.

Example:

Using the same example of an October 31 move out date, your now-former landlord has failed to communicate with you in any way for two months. 

It is now December 31.  You have left six voicemail messages and sent five emails with no response. 

During your tenancy, you regularly communicate with your landlord by phone and email, so you are certain he is receiving your communications but is simply ignoring you. 

Assuming he is in fact wrongfully withholding your $2,500.00 security deposit, he would now be liable to you for $7,500.00 ($2,500.00 security deposit plus a $5,000.00 penalty) plus any other costs you have incurred as a result, such as postage or court costs (if you take him to Small Claims Court).

For more information on proactive steps to protect your residential security deposit and on what to do if your landlord wrongfully withholds your security deposit, send us a message.