The Berkeley Rent Ordinance requires landlords to pay tenants interest on their security deposits.  Berkeley Municipal Code § 13.76.070.  Most Berkeley tenants can expect a security deposit payment every December.  The Berkeley Security Deposit Interest law applies to nearly all residential tenancies in Berkeley, even tenants not covered by Berkeley Rent Control.

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What Tenancies Are Entitled to Berkeley Security Deposit Interest Payments?

The Berkeley Security Deposit Interest law covers most residential rental tenancies in Berkeley, including Section 8 tenancies, new construction, and most condominiums and single-family homes.  However, certain tenancies are not covered, including:

  • Rental units where the tenant shares a kitchen or bath with a landlord;
  • Golden Duplexes;
  • Rental units offered by a nonprofit or university dorms;
  • Rental units in nonprofit cooperatives; and,
  • Tenancies in cottages/accessory dwelling units started after November 7, 2018, where the landlord resides in the main house as their principal residence.

What is the Security Deposit Interest Amount for Berkeley Tenants?

The Berkeley Rent Stabilization Board determines the security deposit interest rate each November, which takes effect every December.  Berkeley Municipal Code § 13.76.070.  The Berkeley Rent Stabilization Board refers to this rate as the “Berkeley Bank Rate.”  For December 2019 through November 2020, the Berkeley security deposit interest rate is 0.2%. Prior security deposit interest rates are available on the Berkeley Rent Stabilization Board website or below:

Berkeley Security Deposit Interest Rates
December 2009 0.9%
December 2010 0.4%
December 2011 0.3%
December 2012 0.2%
December 2013 0.1%
December 2014 0.1%
December 2015 0.1%
December 2016 0.1%
December 2017 0.1%
December 2018 0.1%
December 2019 0.2%

How Often Must Berkeley Landlords Tender Berkeley Security Deposit Interest?

Berkeley landlords must pay security deposit interest every December. Berkeley Municipal Code § 13.76.070.

How May Berkeley Landlords Tenant Berkeley Security Deposit Interest?

The Berkeley Security Deposit Interest law provides landlords two methods to tender security deposit interest payments.  The landlord may elect to either tender a direct cash payment to the tenant or credit the interest as a rent rebate.  Berkeley Municipal Code § 13.76.070.

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

For Berkeley tenants who vacate their unit before the following December, the landlord must pro-rate the security deposit interest payment for the partial year.  Berkeley Municipal Code § 13.76.070.  The landlord shall use the interest rate in effect from the last December.

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

Yes.  Berkeley Municipal Code § 13.76.070.  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 in accordance with California Civil Code section 1950.5.

Can Berkeley Landlords Increase Security Deposits During a Tenancy?

 No, Berkeley landlords may not increase a security deposit during a tenancy.  Regulations of the Berkeley Rent Stabilization Board Regulation 705(a).  Berkeley landlords may only demand and accept security deposits when creating a new tenancy.  Id. However, a Berkeley landlord may collect an additional security deposit in exchange for allowing the tenant to have a pet.  Berkeley Rent Stabilization Board Regulation 705(b).  The landlord must obtain the tenant’s written consent for the pet deposit, and such pet ownership must not have been previously permitted.  Id. Berkeley landlords cannot charge pet deposits for service animals or emotional support animals.

What Happens if a Landlord Fails to Make a Berkeley Security Deposit Interest Payment?

 Berkeley tenants who do not receive their Berkeley Security Deposit Interest payment on or before January 31 of the following year may recover interest at a rate of 10%.  Berkeley Rent Stabilization Board Regulation 704.

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