The Legal Matter of Security Deposits
A Renter’s Right to Security Deposit Interest
A Renter’s Right to Ordinary Wear and Tear
- Other examples of ordinary wear and tear include:Worn hinges and locks
- Small holes in walls
- Faded or yellowing paint
- Scuffed floors
- Frayed pull strings on blinds
A Renter’s Right to a Move-Out Inspection
Many jurisdictions give a tenant a right to a move-out inspection. The tenant can request it, and some landlords offer it because it helps avoid disagreements later on. If required by law, a failure to comply with such a request relinquishes any right to the deposit. Even in jurisdictions where it’s not required by law, failure to comply can and often will weaken a landlord’s position in court. During such inspections, both the tenant and landlord can document the inspection and discuss any wear or damage. If there are disagreements, these can be negotiated here rather than in court.
A Renter’s Right to the Security Deposit
Most states and jurisdictions require landlords to fulfill their damage deposit requirements within 30 days. In California, a landlord has 21 days from the move-out day to provide the ex-tenant with the full security deposit. That 21-day requirement isn’t limited to business days and includes weekends and holidays. There can be extenuating circumstances, but in most cases, the landlord is required to pay interest on the security deposit for every day the money is held beyond the 21st. There may be other penalties as well depending on the jurisdiction.
In Lieu of a Full Deposit, a Renter’s Right to Information
In lieu of receiving a full deposit within the time frame established by law, the ex-tenant has a right to information about the withholding. As a landlord, you must inform the ex-tenant what you’re withholding as well as provide an itemized deduction sheet. Such documents must usually be delivered to the other party in a certified manner and within the same time limit. In other words, you have 21 days to provide the full deposit or to provide some or none of the deposit along with itemized reasoning for any and all deductions made. Although generally not required by law, many landlords will send move-in and move-out pictures that support their deductions in the hopes of avoiding legal action.
A Renter’s Right to Challenge a Landlord’s Decisions
As a landlord or property manager, you have the right to claim some or all of a security deposit, but your decision isn’t necessarily final, and the renter has a right to contest those decisions. One option tenants have is to file in small claims court for amounts up to $10,000 in California. They can sue for the security deposit, interest, penalties and court costs. If the judge deems you acted in bad faith, the penalty can be as much as twice the security deposit. Note that tenants can waive any amount to come in under the $10,000 limit. If they have a claim to more than $10,000 and choose not to waive it, then they have the right to pursue the lawsuit in superior court. In superior court, there’s an even greater burden on the landlord to prove that his or her deductions were reasonable.