Security Deposits: What are the Rules

There is no such thing as a “nonrefundable” security deposits or key deposit, cleaning fee or closing cost, all money paid in addition to your first month’s rent is
refundable.

The total amount the landlord can charge for all the deposits including last month’s rent

1. Twice the amount of one month’s rent for an unfurnished place
2. Three times one month’s rent for a furnished place.

The purpose of the security deposit is to protect owners from damage done by tenants, above and beyond normal wear and tear. In the state of California all owners and managers of real property have 21 days to return security deposits to tenants after they have vacated their apartment.

Owners are allowed to deduct for necessary repairs that are not considered normal wear and tear. However, the law requires the following only if the total costs do not exceed $125 or the tenant waives the right to an itemized list of deductions:

The Rules

1. All bills, receipts and costs incurred and a clear description of the work done.
2. Where work was done by the owner a list of the work done and a reasonable hourly rate must be applied.
3. The law understands that there are times that work cannot be completed in 21 days. When this is the case the owner is required to use the estimate of cost and apply that value and document to the tenant. When this is the case, the law requires that you provide receipts within 14 days of completion of the work.
4. Owners will also have to provide the interest due on security deposits for each year they have held security deposit money. The rent board has a list of interest rates for each past year to help you calculate the total interest return, in addition to the security deposit (less any repairs made).
5. This rate is published annually by the Rent Board. The landlord must pay this at least once a year and may deduct a $21.50 Rent Board Fee from it


Thanks for Reading
Howard Bell
www.yourpropertypath.com
A web site of over 450 articles related to real estate focused primarily on property management.

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