The San Francisco Rent Ordinance requires landlords to pay tenants interest on their security deposits. San Francisco Administrative Code § 49.2.  This law applies to all residential tenancies in San Francisco, even tenants not covered by other provisions of the San Francisco Rent Ordinance.   However, this law does not cover tenants in units assisted or subsidized by the government.

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What is the Security Deposit Interest Amount for San Francisco Tenants?

The San Francisco Rent Board determines the security deposit interest, which takes effect on March 1stof each year.  For March 1, 2020 through February 28, 2021, the security deposit interest rate is 2.2%. Prior security deposit interest rates are available on the San Francisco Rent Board website or below:

Effective Period San Francisco Security Deposit Interest Amount
9/1/1983 – 8/3/2002 5.0%
8/4/2002 – 2/28/2003 3.4%
3/1/2003 – 2/29/2004 1.2%
3/1/2004 – 2/28/2005 1.2%
3/1/2005 – 2/28/2006 1.7%
3/1/2006 – 2/28/2007 3.7%
3/1/2007 – 2/29/2008 5.2%
3/1/2008 – 2/28/2009 5.2%
3/1/2009 – 2/28/2010 3.1%
3/1/2010 – 2/28/2011 0.9%
3/1/2011 – 2/29/2012 0.4%
3/1/2012 – 2/28/2013 0.4%
3/1/2013 – 2/28/2014 0.4%
3/1/2014 – 2/28/2015 0.3%
3/1/2015 – 2/29/2016 0.1%
3/1/2016 – 2/28/2017 0.2%
3/1/2017 – 2/28/2018 0.6%
3/1/2018 – 2/28/2019 1.2%
3/1/2019 – 2/29/2020 2.2%
3/1/2020 – 2/28/2021 2.2%

How Often Must Landlords Tender San Francisco Security Deposit Interest?

San Francisco landlords must pay security deposit interest every year on the tenant’s annual due date. For tenancies started on or after September 1, 1983, the annual due date is the day the landlord received the security deposit from the tenant.  For tenancies that began before September 1, 1983, the annual due date is set by law on September 1st. This means that each year, your landlord must pay or credit you your security deposit interest on your annual due date.

How May Landlords Tender Security Deposit Interest Payments?

The San Francisco Security Deposit Interest law provides landlords two methods to tender interest payments.  The landlord may elect to either tender a direct payment to the tenant or credit the accrued interest against the tenant’s rent.

How is Interest Calculated Where A Tenant Vacates Mid-Year? 

For tenants who reside in their unit for at least one year, but vacate before their next annual due date, the landlord must pro-rate the security deposit interest payment for the partial year. The interest rate in effect on the date the tenant vacates applies.

After a Tenancy Ends, How Long Does the Landlord Have to Tender the Final Security Deposit Interest Payment?

After a tenant vacates their unit, the landlord has two-weeks to tender the final security deposit interest payment.

After a Tenancy Ends, Can San Francisco Landlords Use Accrued Interest to Offset Unpaid Rent, Clean a Dirty Unit, or Repair Tenant Damage?

Yes.  Where the security deposit is insufficient to cover outstanding debt, landlords can use the accrued interest to cover unpaid rent, clean a dirty unit, or repair a tenant’s damage to the unit.

Does the San Francisco Security Deposit Interest Law Cover Tenancies That Do Not Last a Year?

No.  The tenant is not owed interest for a tenancy that does not last at least one year.

What Happens When A Landlord Doesn’t Pay San Francisco’s Mandated Security Deposit Interest?

The tenant is owed the interest.  The tenant should request prompt payment from the landlord in writing.  If a landlord refuses to comply with the San Francisco Security Deposit Interest law, the tenant can file in small claims court.  For assistance, consider visiting the San Francisco Superior Court ACCESS Center.  Unfortunately, the San Francisco Rent Board generally does not hear security deposit interest cases.

Can Tenants Obtain Penalty Awards Against Landlords Who Don’t Pay Security Deposit Interest?

The San Francisco Security Deposit Interest law does not provide for any penalties for the late payment of security deposit interest, other than the amount of past-due interest.

To discuss San Francisco security deposit interest, San Francisco Rent Ordinance, or California Rent Control, contact Astanehe Law to speak with an attorney today.