Security Deposit Showdown: Navigating the Tug-of-War between Tenants and Landlords  

One of the most common points of conflict between landlords and tenants is the handling of security deposits. Even when a tenancy has gone smoothly from the first day to the last, with not a maintenance request or noise complaint to speak of, the landlord might still take more than the tenant thinks is fair or appropriate. Tenant lawyers are often asked to look at the case and provide an opinion. Here is a discussion of the basic issues we usually go over with clients who consult with our office. 

What is a security deposit? 

A security deposit is a payment made by the tenant to the landlord at the start of a tenancy to cover possible costs resulting from the tenancy. The landlord may use this money in the ways listed in Civil Code § 1950.5(b) including to cover rent payments that the tenant fails to make, to repair damage caused by the tenant, or clean the rental unit to return it to the condition it was in at the start of the tenancy. If the lease includes a requirement that the tenant take care of and return or replace personal property, items like furniture for example, and the tenant fails to do so, the security deposit can also be used to cover the cost of replacement if the lease includes a term allowing it to be used for that purpose. Importantly, according to Civil Code § 1950.5(e) the deposit may not be used to make repairs or clean conditions resulting from “ordinary wear and tear,” a concept discussed in a recent blog post. 

Not only are there limits on the use of security deposits, but also on how big they can be. According to Civil Code § 1950.5(c), for non-furnished rental units, a security deposit cannot be larger than the value of two months’ rent, and for a furnished unit, it may be no more than three months’ rent. There is also a one-month limit for units rented exclusively by members of the armed forces. 

What must a landlord do to deduct from the security deposit? 

In order to withhold funds from the security deposit to perform repairs or cleaning, the landlord must give the tenant an opportunity to fix the conditions that would otherwise need work by the landlord. This begins with the notice contained in Civil Code § 1950.5(f)(1) informing the tenant of the right to an initial move out inspection within two weeks of the end of the tenancy. The landlord is supposed to provide an itemized list of proposed deductions during that inspection, and only items on that list are supposed to be deducted unless the issue was caused by the tenant after the inspection or was hidden by the tenant’s property. For example, this last case could be something like gouges on the floor covered up by a rug. 

According to Civil Code § 1950.5(g), by the twenty-first day after the end of the tenancy, the landlord is required to provide the remaining balance of the security deposit along with an itemized list of any deductions and supporting documentation if deductions exceed $125.00. If the landlord or their employees performed work on the unit, they are required to provide estimates for the labor costs. If an exact amount cannot be provided, the landlord should provide an estimate. 

What can a tenant do if the landlord fails to comply with the law? 

If the landlord fails to return the security deposit, and especially if they do so after failing to follow the requirements established by state law, then there could be legal liability. The tenant may of course attempt to get the security deposit back, including any partial amounts withheld by the landlord. If the tenant can show the landlord withheld the deposit in bad faith, then they might be entitled to twice the withheld amount in additional damages.  This may best be pursued through small claims court, but if there were other issues with the tenancy, a larger lawsuit prepared with the help of a tenant rights attorney might be called for. 

Because this issue is so common, it is important to document any problems with the move-out process. Ultimately, you may need to go to a tenant rights attorney to figure out what to do next.