So you want your security deposit back?

BASIC RULES GOVERNING SECURITY DEPOSITS

At the beginning of the tenancy, the landlord most likely will require you to pay a security deposit. The landlord can use the security deposit, for example, if you move out owing rent, damage the rental unit beyond normal wear and tear, or leave the rental less clean than when you moved in.

Under California law, a lease or rental agreement cannot say that a security deposit is “nonrefundable.” This means that when the tenancy ends, the landlord must return to you any payment that is a security deposit, unless the landlord properly uses the deposit for a lawful purpose, as described below and under Refunds of Security Deposits.

Almost all landlords charge tenants a security deposit. The security deposit may be called last month’s rent, security deposit, pet deposit, key fee, or cleaning fee. The security deposit may be a combination, for example, of the last month’s rent plus a specific amount for security. No matter what these payments or fees are called, the law considers them all, as well as any other deposit or charge, to be part of the security deposit. The one exception to this rule is stated in the next paragraph.

The law allows the landlord to require a tenant to pay an application screening fee, in addition to the security deposit. The application screening fee is not part of the security deposit. However, any other fee charged by the landlord at the beginning of the tenancy to cover the landlord’s cost of processing a new tenant is part of the security deposit. Here are examples of the two kinds of fees:

• Application screening fee – A landlord might charge you an application screening fee to cover the cost of obtaining information about you, such as checking your personal references and obtaining your credit report. The application screening fee is not part of the security deposit. Therefore, it is not refundable as part of the security deposit.

• New tenant processing fee – A landlord might charge you a fee to reimburse the landlord for the costs of processing you as a new tenant. For example, at the beginning of the tenancy, the landlord might charge you for providing application forms, listing the unit for rent, interviewing and screening you, and similar purposes. These kinds of fees are part of the security deposit Therefore, these fees are refundable as part of the security deposit, unless the landlord properly uses the deposit for a lawful purpose, as described below and under Refunds of Security Deposits.

The law limits the total amount that the landlord can require you to pay as a security deposit. The total amount allowed as security depends on whether the rental unit is unfurnished or furnished and whether you have a waterbed.

• Unfurnished rental unit: The total amount that the landlord requires as security cannot be more than the amount of two months’ rent. If you have a waterbed, the total amount allowed as security can be up to two and-a-half times the monthly rent.

• Furnished rental unit: The total amount that the landlord requires as security cannot be more than the amount of three months’ rent. If you have a waterbed, the total amount allowed as security can be up to three-and-a-half times the monthly rent.

• Plus first month’s rent: The landlord can require you to pay the first month’s rent in addition to the security deposit.

The landlord normally cannot require that you pay the security deposit in cash.

1. Security deposit example: Suppose that you have agreed to rent an unfurnished apartment for $500 a month. Before you move in, the landlord can require you to pay up to two times the amount of the monthly rent as a security deposit ($500 x 2 = $1,000). The landlord also can require you to pay the first month’s rent of $500, plus an application screening fee of up to $42.06, in addition to the $1,000 security deposit. This is because the first month’s rent and the application screening fee are not part of the security deposit.

2. Suppose that the landlord has required you to pay a $1,000 security deposit (the maximum allowed by law for an unfinished unit when the rent is $500 a month). The landlord cannot also demand, for example, a $200 cleaning deposit, a $15 key deposit, or a $50 fee to process you as a new tenant. The landlord cannot require any of these extra fees because the total of all deposits then would be more than the $1,000 allowed by law when the rent is $500 a month.

Suppose that you ask the landlord to make structural, decorative or furnishing alterations to the rental unit, and that you agree to pay a specific amount for the alterations. This amount is not subject to the limits on the amount of the security deposit discussed above, and is not part of the security deposit. Suppose, however, that the alterations that you have requested involve cleaning or repairing damage for which the landlord may charge the previous tenant’s security deposit. In that situation, the amount that you pay for the alterations would be subject to the limits on the amount of the security deposit and would be part of the security deposit.

A payment that is a security deposit cannot be nonrefundable. However, when you move out of the rental, the law allows the landlord to keep part or all of the security deposit in any one or more of the following situations:

• You owe rent;

• You leave the rental less clean than when you moved in;

• You have damaged the rental beyond normal wear and tear; and

• You fail to restore personal property (such as keys or furniture), other than because of normal wear and tear.

If none of these circumstances is present, the landlord must return the entire amount that you have paid as security. However, if you have left the rental very dirty or damaged beyond normal wear and tear, for example, the landlord can keep an amount that is reasonably necessary to clean or repair the rental. Deductions from security deposits are discussed in detail in Refunds of Security Deposit.

Make sure that your rental agreement or lease clearly states that you have paid a security deposit to the landlord and correctly states the amount that you have paid. The rental agreement or lease should also describe the circumstances under which the landlord can keep part or all of the security deposit. Most landlords will give you a written receipt for all amounts that you pay as a security deposit. Keep your rental agreement or lease in case of a dispute.

THE INVENTORY CHECKLIST

You and the landlord or the landlord’s agent should fill out a pre-move-in checklist. It’s best to do this before you move in, but it can be done two or three days later, if necessary. You and the landlord or agent should walk through the rental unit together and note the condition of the of the unit at the time that you take possession.

Both of you should sign and date the checklist, and both of you should keep a copy of it. Carefully completing the checklist at the beginning of the tenancy will help avoid disagreements about the condition of the unit when you move out.

You can find a free copy of a pre-move-in checklist at www.allamericandocument.com