Knowing Your Rights Regarding Residential Security Deposits – Part 2 Moving Out

Among the most popular questions we receive each week are those involving residential security deposits. We are often called upon by tenants and landlords to write letters clarifying their positions regarding the return or retention of a security deposit. These “lawyer letters” often help resolve the issue and, if not, are excellent exhibits our clients may use when they pursue their issue in small claims court.

This is the second and final installment of a two part blog dealing with security deposit laws as they relate to residential properties. This second blog deals with how disputes arise regarding security deposits at the end of a residential lease. Please keep in mind that this article only deals with residential security deposits and other laws apply to mobile homes, commercial properties, and boats.

The Inspection. Before the tenant moves out the landlord must notify the tenant in writing that the tenant has the option to request an initial inspection of the property and that the tenant may be present during the inspection. (Civil Code section 1950.5(f).) If requested, the landlord must inspect the property within a reasonable time, but no earlier than two weeks before the lease ends. The landlord must give at least 48 hour prior written notice of the date and time of the inspection. This inspection must be done before the tenant moves out and before the landlord’s final inspection. The purpose of the initial inspection is to allow the tenant to remedy any deficiencies so the tenant may avoid deductions from the security deposit. The tenant must be given the opportunity from the time of the inspection to the time the lease ends, to remedy any and all deficiencies. If, after notice to the tenant, the initial inspection is not requested, the landlord has no obligation to conduct one. It is a good idea for both the landlord and the tenant to write down the results of this inspection and to take plenty of photographs and video to back up their position.

When is the Security Deposit Due? Within 21 days after the tenant has vacated the premises, the landlord must provide the tenant with the amount of the security deposit minus any legal deductions. If the landlord deducts any amount from the security deposit for unpaid rent, cleaning or repairs, the landlord must also give the tenant a written, itemized statement that includes: the total amount of the security deposit before any deductions were made; each amount the landlord deducted for unpaid rent, cleaning and/or repairs; and a detailed statement explaining the basis for each deduction that was made.

Content of the Landlord’s Statement. The landlord must attach to the itemized statement any and all pertinent documents relating to the deductions from the security deposit. These include bills, invoices, and receipts, that prove the charges and repairs deducted. The landlord must deliver the itemized statement, along with the documentation and the remainder of the security deposit to the tenant within 21 days. It is important that the costs of the repairs be “reasonable” taking into account the geographic area in which the rental property was located.

Landlord’s Liability. If the landlord, in bad faith, fails to follow the law regarding security deposits, the tenant may be allowed statutory damages up to twice the amount of the security deposit, as well as actual damages. The court may award these bad faith damages whether the tenant has requested them or not. The landlord has the burden of proof to proving that the amounts claimed and deducted were, in fact, reasonable. Therefore, it is important to keep meticulous records as well as receipts and checks showing the cost of repairs and necessary cleaning.

Because laws are always changing, it is a good idea for either a landlord or tenant to consult with a landlord/tenant attorney before signing a residential lease. Adina T. Stern, of Adina T. Stern, a Professional Law Corporation, has handled residential leasing issues for over three decades. We advise clients on commercial, residential, and industrial leasing issues throughout California including, Anaheim, Brentwood, Beverly Hills, Camarillo, Century City, Corona del Mar, Costa Mesa, Coto de Caza, Foothill Ranch, Irvine, Laguna Hills, Laguna Beach, Los Angeles, Malibu, Mission Viejo, Newport Beach, North Hollywood, Riverside, Palm Desert, Palm Springs, Riverside, Somas, San Bernardino, San Diego, Studio City, and Temecula, West Hollywood, and Westwood.