Handling Security Deposits

When one of your California tenants gives you his notice, it is your job to handle the entire process of them moving out in accordance with California Civil Code 1950.5. You will find that maintaining a friendly working relationship with your tenant during the time they have lived in your rental property can go a long way to making this process go smoothly.

The Letter of the Law

If for any reason, you find you need to withhold part or all of the person’s security deposit, you must be sure you follow the letter of the law to the “T”. If you don’t you could easily find yourself facing a judge in small claims court where they are likely to get all of their money back, even if they have damaged your property.

Following Their Notice to Vacate

Once your tenant has given you their Notice to Vacate, you are legally required to offer your tenants a pre-move out inspection under Civil Code 1950.5. They, of course, can refuse the inspection, but you retain the right to inspect the property after they leave and use the information to determine how much, if any, you are going to withhold from their deposit.

If you are going to withhold some or all of their deposit, you have 21 days from the day the tenant vacated the property to provide them with a detailed list of why you are doing so. At the same time, you must send them a check for the remaining balance of their deposit. In the event you cannot provide your tenant with the necessary receipts, you may provide them with an estimate and let them know you will provide them with the receipts as soon as they are available.

Reasons You Can Withhold Money

In California, there are only four reasons why you can withhold any or all of a tenant’s security deposit. They are:

  • When there is unpaid rent
  • To cover the cost of cleaning the home after they move out. However, you can only charge as much as it costs to restore the home to the same state of cleanliness it was in when they first moved in.
  • To cover the cost of repairing any damages beyond normal wear and tear that has been caused by the tenant or any of their guests.
  • If the lease you both signed covers it, the cost of repairing or restoring furnishings, furniture, and any other items such as keys as a result of anything but normal wear and tear.

It is your responsibility to ensure that you do everything in accordance with California state rental laws. If you are not familiar with Civil Code 1950.5, you need to take the time to read it and understand it. If you don’t you may suddenly find yourself facing the judge in small claims court.