A security deposit is there to protect a landlord when tenants violate or breaks the lease agreement. It can be used to cover missing rent payments, damage to the property, cleaning or rekeying of the doors. Essentially, the tenant’s security deposit serves to protect your investment and your interests.
Security deposit laws are there to set the rules about the California security deposit for your rental agreement and to prevent disputes in small claims court.
As a landlord, you might be tempted to charge hefty security deposits that will give you ample protection from any mishaps. However, California landlord-tenant law is quite clear on how a landlord or their property manager should proceed when it comes to security deposits.
In this article, the team at Westside Property Management advises California property owners on how much they should charge their tenants for a security deposit and go over general rules for asking for security deposits in California.
Security Deposit Amount
According to California security deposit laws, a landlord can only charge their tenants a security deposit equivalent to two months’ rent. This applies to unfurnished rental properties. If you are renting out a furnished property, the maximum security deposit is three months’ worth of rent.
If your tenant happens to own a waterbed, you can add half a month’s rent to the security deposit total and specify this in the lease agreement.
Security deposit laws state that a tenant who is an active member of the military will have their maximum security deposit reduced by one month. This rule, however, doesn’t apply in the following circumstances:
- If the tenant has a poor credit history or rental records show that they have caused damage to property in the past.
- If the property is leased by several people and one of the lessees is not an active service member.
More and more California tenants are pet owners. Choosing to limit your rental unit to only tenants with no pets can significantly reduce the allure of your property. However, pets, especially dogs and cats, can cause damage to the floors and curtains and incur extra cost.
California state law allows a landlord to charge a separate security deposit for the pet. This provision doesn’t apply to service animals that are used by people with disabilities.
Please note that as a landlord, you cannot discriminate against a possible renter due to a disability. This goes against the provisions of the Fair Housing Act and can lead to you paying hefty fines as a result of housing discrimination under California landlord tenant laws.
People with disabilities should get an equal opportunity to enjoy the amenities of your property. If you rent to a tenant with a disability who has a service animal, you can’t charge a pet deposit.
As we mentioned earlier, the purpose of the tenant’s security deposit is to protect the property as well as the landlord’s interests. There are some allowable deductions that include the following:
- Late rent payments. If a tenant moves out and has failed to pay a portion of their rent before doing so, you can use the security deposit to cover this unpaid rent.
- Cost of renovations and repairs. It is the duty of the renter to maintain the property in a reasonable manner. The landlord can make deductions for repairs that are beyond normal wear and tear or caused by tenant negligence or property abuse. If the landlord uses the security deposit for repairs, they should provide the tenant with an itemized statement.
- Costs of cleaning. A tenant is expected to return the property to the same level of cleanliness to which the property was handed over to them. If they fail to do so, you can take cleaning costs out of the security deposit.
Are you unsure what deductions to make from your security deposit? Please don’t hesitate to get in touch with the property professionals from Westside Property Management. Our property experts know California law like the back of their hands and can guide you on how to proceed.
Property Damage vs. Normal Wear and Tear
It is important that California property owners and landlords know the difference between property damage and normal wear and tear.
Normal wear and tear refers to the deterioration of the property that occurs naturally by the tenant living in the unit. Examples of this include chipped paint, loose cabinets and hinges, worn-out blinds, and fading carpets or floors. Any damage that isn’t normal wear and tear can be ground for eviction depending on how severe it is.
Property damage refers to the abuse of the property by the tenant that is caused intentionally or caused by negligence. This type of damage is avoidable. Examples of property damage include broken tiles, broken window panes, missing fixtures, torn curtains, and damage to electrical appliances.
The security deposit only covers the cost of property damage and not normal wear and tear. We recommend that you read the state’s provision on property damage vs normal wear and tear to be on the right side of the law.
How to Avoid Issues with Security Deposits
Keep Accurate Records
At the beginning of the lease agreement, you should take internal and external photos of the rental unit and write down the state of major fixtures and appliances. Have the tenant sign and date an inspection document that confirms the state of every space and appliance.
The same document would be used to check the condition of the rental unit when the lease expires. Should there be any challenges to any deductions made, you can make reference to the photographs and the inspection document.
Return the Deposit
After you have checked for any potential damages to the rental unit, you can make necessary repairs followed by the security deposit deductions. If you have made any deductions, you must provide the tenant with an itemized list of said deductions.
You should be aware that you are required to return the balance of the security deposit to the tenant within 21 days.
If you are in doubt about how you should proceed with California landlord-tenant laws, you should work with a property manager. Westside Property Management has been at the forefront of advising property owners in LA and the surrounding area on all things management.
What makes us different from the competition is our management team. We only employ the best in the area. All of our property managers are experienced, diligent, and licensed. You can rely on Westside Property Management to offer you sound and professional advice that will guide your California real estate investments.
This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regards to this content or any other aspect of your rental management needs.