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Does the Landlord Have a Deadline to Return Security Deposit?

Returning Security Deposits in San Francisco, CA

Does the landlord have a deadline to return the security deposit? This is a common question that arises when it comes to security deposits in rental agreements. Security deposits serve as a safeguard for landlords, providing financial protection against potential damages or unpaid rent. However, understanding the rules and regulations regarding the return of security deposits is crucial for both tenants and landlords. 

When it comes to meeting the deadline for returning the security deposit, landlords can benefit from the assistance of our San Francisco landlord-tenant attorneys at Steven Adair MacDonald & Partners, P.C. We will guide you through the entire process and ensure that you comply with all legal obligations.

In this article, we will explore the importance of understanding the deadline for returning the security deposit and the rights and responsibilities associated with it.

  • Deadline to Return Security Deposit under California Law
  • Notifying the Tenant
  • Deductions and Itemized Statements
  • How much can landlords charge for security deposit?
  • Penalties for Non-Compliance
  • What are non-refundable deposits?
  • Do landlords pay yearly interest on security deposits?
  • If there is a change in the rental property owner

Deadline to Return Security Deposit under California Law

Most jurisdictions have specific laws or regulations that outline the timeframe within which landlords must return the security deposit to their tenants. These laws aim to protect tenants from undue delays or potential misuse of their deposits. 

California landlords have 21 calendar days after the tenant has vacated the premises to provide the tenant with an itemized statement indicating the amount of and use of the security deposit and to return any remaining portion of the security deposit (Civ. Code §1950.5.).

Notifying the Tenant

Upon the termination of the lease or tenancy, landlords are generally required to provide written notice to the tenant regarding the return of the security deposit. This notice should include information about the amount being refunded, any deductions made, and the deadline for returning the deposit.

Deductions and Itemized Statements

If a landlord intends to make deductions from the security deposit, they usually have to provide the tenant with an itemized statement detailing the deductions made and any remaining balance. This statement should be provided within the same timeframe as the deposit return.

Providing an itemized statement helps ensure transparency and allows tenants to review and dispute any unjustified deductions. It serves as a record of the transaction and helps prevent misunderstandings or disputes between landlords and tenants regarding the use of the security deposit.

California state law allows the landlord to make deductions from a security deposit for certain reasons including:

Unpaid Rent

If the tenant owes any outstanding rent, the landlord can deduct the amount from the security deposit.

Property Damage

Landlords may deduct the cost of repairing damages caused by the tenant, such as broken windows, holes in walls, or carpet stains beyond normal wear and tear.

Cleaning Fees

If the property requires excessive cleaning due to the tenant’s negligence or failure to maintain cleanliness, the landlord may deduct “reasonable” cleaning charges to bring the unit to the same level of cleanliness as at the inception of the tenancy

Repairs and Maintenance

Costs associated with repairs or replacements necessary due to tenant damage or negligence, such as fixing plumbing issues caused by improper use.

How much can landlords charge for security deposit?

Many jurisdictions impose legal restrictions on the maximum amount that landlords can charge as a security deposit. These restrictions may be based on a fixed amount or a certain percentage of the monthly rent. Excessive security deposits are NOT allowed under California’s landlord and tenant laws. A San Francisco landlord-tenant lawyer can help landlords determine the specific limits set by the law.

The maximum amount of money a landlord can charge a tenant for a security deposit is based on whether the unit is furnished. For unfurnished units, the landlord cannot charge more than two months’ worth of rent. For furnished rentals, the landlord can charge up to three months’ rent for the security deposit. This is in addition to the first month’s rent.

However, the law is different for people that are on active military duty. If that applies to you, you only need to pay a security deposit equal to one month’s rent for an unfurnished apartment; if it’s for a furnished apartment, it can be no more than two months.

Penalties for Non-Compliance

Many jurisdictions impose penalties on landlords who fail to meet the deadline for returning the security deposit. These penalties can range from fines to additional compensation for the tenant, often exceeding the original deposit amount.

What are non-refundable deposits?

There is no such thing as a “non-refundable” security deposit. Even if it’s referred to as a key deposit, last month’s rent, or a pet deposit, any money that you pay above your first month’s rent is refundable. In some cases, the landlord can require you to pay extra for your animal, but only within the limits we just discussed and the pet fee can’t ever be nonrefundable. Your landlord must return a deposit (less any reductions) to you when your lease has concluded.

Do landlords pay yearly interest on security deposits?

In San Francisco, landlords have an additional obligation when it comes to security deposits. They are required to pay yearly interest to tenants on the deposit amount. This unique provision aims to provide tenants with a financial benefit for the duration of their tenancy.

This interest payment requirement applies to all residential units in the city, including those exempt from the Rent Ordinance, with one exception: if the rent for an apartment is subsidized or assisted by a government agency, landlords are not required to make the interest payment.

If there is a change in the rental property owner

When there is a change in ownership of a rental property, landlords must adhere to specific laws and regulations to ensure a smooth transition and protect the rights of both tenants and the new property owner.

If the landlord sells the property before the lease term expires, they have two options for handling the security deposit. They can either transfer the security deposit to the new owner or return the deposit directly to the tenant.

How a San Francisco Landlord-Tenant Lawyer Can Help Meet the Deadline to Return the Security Deposit

Meeting the deadline to return the security deposit is not only a legal requirement but also crucial for maintaining positive landlord-tenant relationships. Landlords who want to ensure compliance and avoid potential penalties can benefit from the assistance of our San Francisco landlord-tenant lawyers at Steven Adair MacDonald & Partners, P.C.

With our in-depth knowledge of local laws and regulations, we provide tailored legal guidance to ensure compliance with the deadline for returning the security deposit. We will review lease agreements, provide timely notifications to tenants, handle disputes, and offer legal representation when needed. Our San Francisco landlord-tenant law firm will protect your rights, minimize risks, and ensure a smooth and efficient process for returning security deposits. 

Whether you’re dealing with evictions, landlord-tenant disputes, real estate litigation cases, and other legal concerns in San Francisco and the Bay Area, we are here to help. Call us today to schedule an initial consultation and let us handle the legal complexities while you focus on being a responsible and compliant landlord.

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