Often, California tenants must pay security deposits. Although usually an afterthought during the tenancy, security deposits can become central to landlord-tenant disputes upon a tenancy’s conclusion. For what can a landlord deduct from a California tenant’s security deposit? How many days does a California tenant have to wait for a security deposit? How best can a California tenant protect their security deposit when vacating? What tenants in California are entitled to security deposit interest? And, what damages can California tenants recover where their landlord is not playing fair? This article answers all of the above, and more, by providing a concise overview of California Civil Code section 1950.5, which is California’s statewide security deposit law.

What is a Security Deposit?

A security deposit is defined as, “any payment, fee, deposit, or charge imposed at the beginning of the tenancy to reimburse the landlord for costs associated with processing a new tenant or imposed as an advanced payment of rent, used or to be used,” to cover:
1. A tenant’s rent default;
2. Repair tenant damage to the unit beyond ordinary wear and tear;
3. Clean the unit after the tenant moves out to return the unit to the same level of cleanliness it was in at the inception of the tenancy;
4. To remedy future tenant defaults under the lease to restore, replace, or return rental property where a lease provision for this exists and the defaults are not ordinary wear and tear. California Civil Code § 1950.5(b).

Please note that a tenancy commenced on or before January 1, 2003 cannot be charged for a cleaning under this law.

What Constitutes Ordinary Wear and Tear?

As stated above, a tenant cannot be charged for ordinary wear and tear. Ordinary wear and tear can be thought of as normal unit deterioration when used for its intended purpose. One court has defined ordinary wear and tear as contemplating, “that deterioration will occur by reason of time and use in spite of ordinary care for its preservation.” Connell v. Brownstein-Louis Co., 86 Cal. App. 610 (1927). The extent of ordinary wear and tear may differ depending on the length of the tenancy. Common examples of ordinary wear and tear include, but are not limited to, faded tiles, worn enamel in bathtub, worn carpet due to age, cracked or faded paint, and worn toilet flapper.

Does California’s Security Deposit Law Limit A Security Deposit Amount?

Yes, California tenants may not be forced to furnish a security deposit more than an amount equal to: 1. Two months’ rent for unfurnished units; or, 3. Three months’ rent for furnished units. California Code of Civil Procedure § 1950.5(c)(1).

California law provides separate protections for service members in the armed forces. Where a service member resides in the unit with a spouse, parent, domestic partner, or dependent, the landlord may not collect a security deposit more than: 1. One months’ rent for unfurnished units; or, 2. Two months’ rent for furnished units. California Code of Civil Procedure § 1950.5(c)(2). However, service members with a history of poor credit or damaging property are not entitled to these protections, and the landlord may demand a security deposit amount as if renting to a non-service member tenant. California Code of Civil Procedure § 1950.5(c)(2)(A). Please note that a landlord may not refuse to rent to a service member because of the security deposit limitation.

A service member is defined as a militia member called or ordered into active state or federal services, or an active or reserve of the Army, Navy, Air Force, Marine Corps, or Coast Guard. California Code of Civil Procedure § 1950.5(c)(2).

What Happens to the Security Deposit During a Sale, Transfer, or Assignment of the Building or the Landlord’s Death?

Where a landlord sells, transfers ownership, or assigns ownership of the building to another, or the landlord dies, the landlord, or their agent, must transfer the security deposit to a succor and notify the tenant. California Code of Civil Procedure § 1950.5(h). The landlord, or their agent, must notify the tenant of the transfer by personal delivery or mail. Id. Where the landlord opts for notification by personal delivery, the landlord must have the tenant sign the landlord’s personal copy of the notice of transfer of security deposit. Id.

What Are Landlords Required to Disclose in a Notice of Transfer of Security Deposit?

When serving a California tenant with a notice of transfer of security deposit, the land must include the following:
• Notice of transfer of security deposit;
• Notice of any claims made against the security deposit;
• Notice of the amount of the security deposit; and,
• Notice of the successor in interest’s name, and address, and phone number.

What Happens When a Landlord or Agent Fails to Comply with Security Deposit Transfer Notice Requirements?

Where a landlord fails to comply with security deposit transfer notice requirements, the landlord or their successor in interest shall be jointly and severally liable with the landlord for the repayment of the security deposit or the portion the tenant is entitled. California Code of Civil Procedure § 1950.5(j)(1). This means that the landlord remains liable in a security deposit lawsuit should the tenant be forced into filing one.

How Can California Tenants Protect Their Security Deposit When Moving Out?

When a California tenant plans to vacate their home, it is best to plan to take the following steps to best ensure a full return of their security deposit:
• Inspect the unit alone and repair any tenant caused damage. Where landlords often fail to consider cost when repairing tenant damage, the tenant is likely to find and hire a competent and affordable option when repairing damage. Failing to repair known tenant damage could result in the tenant suffering an unreasonable an excessive deduction from their security deposit;
• Request a pre-move out inspection with the landlord; and,
• Decide whether to repair any alleged damage identified by the landlord during the inspection.

Who Can Request A Security Deposit Pre-Move Out Inspections?

All residential California tenants have a right to request a pre-move out inspection. California Code of Civil Procedure § 1950.5(f)(1).

What Are the Tenant’s Options Following the Security Deposit Pre-Move Out Inspection?

After the landlord identifies any alleged damage, the tenant is then afforded an opportunity to repair valid claims or thoroughly document the alleged damage before returning the unit to the landlord.

When Do Security Deposit Pre-Move Out Inspections Occur?

Generally, pre-move out inspections occurs a week or two before the tenant plans to vacate the unit. However, pre-moveout inspections cannot occur earlier than two weeks before the tenant plans to vacate the unit.

What Notice Must Landlords Provide Before Entering a Unit for a Security Deposit Pre-Move Out Inspection?

Where the landlord requests the inspection, they must provide forty-eight (48) hour written notice stating the inspection date and time. The notice must contain the following language: “State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.”

The tenant and landlord can agree to waive the written notice requirement by jointly signing a written waiver. California Code of Civil Procedure § 1950.5(f)(1).

Upon the California Tenant’s Request, May A Landlord Perform the Security Deposit Pre-Move Out Inspection Alone?

Please note that the landlord can unilaterally perform the inspection alone after serving written notice, unless the tenant withdraws their request for the inspection.
What Writings Must a Landlord Provide Following a Security Deposit Pre-Move Out Inspection?

Following the inspection, the landlord must provide the tenant with an itemized list of repairs or cleaning that will support any later security deposit deductions, and the text of California Civil Code section 1950.5(b)(1)-(4). California Code of Civil Procedure § 1950.5(f)(2).

After A California Tenant Vacates Their Unit, How Many Days May the Landlord Wait Before Returning the Security Deposit?

21 days. California Code of Civil Procedure § 1950.5(g)(1). California security deposit law provides, no later than twenty-one (21) days after the tenant vacates the unit, the landlord shall furnish: 1. Any remaining security deposit money; and/or, 2. An itemized statement (accounting) indicating the basis for any deductions from the security deposit, with proof of cost and proof of payment by the landlord. Id.

How May a Landlord Deliver the Security Deposit Refund And/or the Itemized List of Deductions?

The landlord can deliver the security deposit refund and/or the itemized list of deductions by: 1. Personal delivery; or, 2. First-class mail. California Code of Civil Procedure § 1950.5(g)(5). Where the landlord and tenant agree, the landlord can deposit the security deposit refund electronically into the tenant’s account. Id. Similarly, where the landlord and tenant agree, the landlord can email the itemized list of deductions to the tenant. Id. However, where there is no agreement, email and electronic deposits are invalid and prohibited under the security deposit law.

Where the tenant fails to provide an address to the landlord, the landlord shall send mail to the unit that has been vacated. Id.

What Information Are California Tenants Entitled to Receive on Itemized Statement of Deductions?

As stated above, for any amount of a security deposit not refunded to the tenant, the landlord is required to provide an itemized statement of deductions with proof of cost and proof of payment. California Code of Civil Procedure § 1950.5(g)(1).

The itemized list of deductions must contain separate line items for each deduction specifying the item of damage and the cost associated with repairs.

The landlord must also provide copies of documents evidencing all charges incurred and deducted to repair or clean the unit. California Code of Civil Procedure § 1950.5(g)(2). This typical takes the form of receipts and invoices for equipment rental, goods, and services.

Where the landlord, or their employee, performs the repair work themselves, the itemized statement of deductions must: 1. Reasonably describe the work performed; 2. Include the time spent on the work; and, 3. Include the reasonable hourly rate charged.

Where the landlord hires an outside vendor to perform the repair work, the itemized statement of deductions must: 1. Include a copy of the bill, invoice, or receipt; and, 2. Provide the outside vendor’s contact information.

For deductions not exceeding $125, the landlord need not comply with the requirements listed above. California Code of Civil Procedure § 1950.5(g)(4)(A). Additionally, the tenant can waive the landlord obligation to comply. California Code of Civil Procedure § 1950.5(g). For a waiver to be effective, the tenant must sign waiver at either: 1. The same time or after the landlord serves a notice to terminate a tenancy under Civil Code section 1946 or 1946.1, or California Code of Civil Procedure section 1161; or, 2. No earlier than sixty (60) calendar days before the expiration of a fixed-term lease. California Code of Civil Procedure § 1950.5(g)(4)(B).

What Steps Can California Tenants Take When a Landlord Fails to Comply with the Itemized Statement of Deductions Requirements?

Where a landlord fails to comply with the itemized statement of deduction requirements elaborated upon above, the tenant can take the following steps:
• Within fourteen days after receiving the itemized statement, the tenant shall make a request for additional documents. Upon receipt of the request, the landlord has fourteen (14) days to respond and provide additional documents;
• Write a demand letter stating the tenant’s position and demanding partial or full return of the security deposit amount unlawfully withheld;
• File a civil action, usually in small claims court, to recover the security deposit.

Can Landlords Make Security Deposits Non-Refundable?

No, the landlord nor the lease may ever make a security deposit nonrefundable. California Code of Civil Procedure § 1950.5(m).

What Damages Are California Tenants Entitled for Improper Security Deposit Deductions?

If a tenant is forced into filing a lawsuit to recover a partial or fully wrongfully withheld security deposit, the tenant is entitled to recover the principal withheld, but also – where the landlord is found to withhold the security deposit in bad faith – damages of up to twice the amount of the security deposit wrongfully withheld. California Code of Civil Procedure § 1950.5(l). The California tenant may also recover actual damages associated with the landlord’s improper withholding of the security deposit. Id.

Common examples of bad faith include failing to provide an itemized statement of deductions at all, failing to attach proof of costs and proof of payment to an itemized statement of deductions, withholding the security deposit as a means of retaliation for the tenant asserting a right, harassing, or intimidating the tenant for requesting their security deposit refund, and overcharging the tenant for repair work.

California tenants suffering from a landlord’s improper security deposit deductions can recover these damages in court. Often, California tenants achieve success representing themselves in small claims court, which exists to hear cases involving fewer than $10,000.00 efficiently and quickly. Where the total amount sought in court exceeds $10,000.00, the tenant should consider filing in a larger court, as small claim’s court limitation will not suffice in making the California tenant whole.

Which California Tenants Are Entitled to Security Deposit Interest?

Some California tenants are entitled to security deposit interest. California cities and counties mandating security deposit interest include, but are not limited to:

  • All San Francisco tenants, except tenants in government-assisted units, are entitled to security deposit interest annually. San Francisco Administrative Code § 49;
  • Berkeley tenants are entitled to security deposit interest annually. Berkeley Administrative Code § 13.76.070;
  • Santa Cruz County tenants mandates a payment of security deposit interest every fifth year of tenancy, or at termination of tenancy. Santa Cruz County Code § 8.42.020. Notwithstanding the law’s quinquennial disbursements, interest accrues annually. Id. Santa Cruz County tenants in government-assisted properties are not entitled to security deposit interest. Id;
  • Capitola tenants are entitled to security deposit interest at termination of tenancy or at the end of the next February occurring after the accrued amount of the security deposit interest reached $50. Capitola Municipal Code Chapter 5.48; and,
  • West Hollywood tenants are entitled to security deposit annually.