Once you have found and approved a tenant for your California City rental property, you’ll need to collect all the move-in funds before you hand over the keys. A security deposit is an important way to protect yourself and your property. This is a deposit you’ll hold throughout the tenancy. It remains the tenant’s money, and you cannot spend it on repairs or anything else while your tenants are in place. But, once they move out, it can be used to cover the cost of damage or unpaid expenses.
California law is specific when it comes to how you collect, hold, and return security deposits. We’re sharing some of the most important security deposit information today.
California Security Deposit Limits
Assuming your property is unfurnished, you can only charge up to two times the monthly rent as a security deposit. So, if your rental amount is $1,500, the most you can ask for in a security deposit is $3,000. You can charge three times the monthly rent if your property is furnished. Nonrefundable fees are not allowed in California. When you collect a security deposit, it’s just that – a deposit. The tenants can expect the money to be returned at the end of the lease period if the home is returned in the same condition in which it was provided.
Wear and Tear versus Property Damage
At the end of the lease term, when it’s time to return the deposit, you’ll need to decide whether you have a right to deduct any money to pay for damages left behind by the tenant. Be very careful. Property owners are responsible for wear and tear, so you cannot charge for every imperfection you find after the tenant moves out. Make sure you documented the condition of the home thoroughly before a tenant moved in. There should be pictures and videos that clearly demonstrate how the property looked. Take pictures and videos and notes of the same things during the move-out inspection.
Wear and tear
includes things like small nail holes in the walls from where pictures were hung or scuff marks from where furniture pushed up against a wall. You cannot charge the tenants for new paint. Dents in the wall from doors and curtains or blinds faded from sun are additional examples of wear and tear. Damage would include broken tiles, doors off their hinges, large holes in walls, or torn carpet from pets.
California Security Deposit Return Process
Pay attention to detail when you’re returning the security deposit. You have 21 days from the date of move-out to return all or some of the deposit to your tenants. If you have kept any money from the deposit, you’re required to provide an itemized list of those deductions, with explanations. If you have receipts or invoices for the work, include copies of those as well. It’s important to document your deductions and provide advance notice. If a tenant takes you to court over a security deposit dispute and you lose, you’ll have to refund the entire deposit as well as extra fees and penalties. It can be expensive.
Security deposits can be tricky. If you need help collecting or returning them, please don’t hesitate to
contact us
at JBL & Associates.
