Accounting and Return of Security Deposits under California Law

California has specific laws governing a landlord’s rights and obligations arising from a security deposit held by a landlord under a rental contract. This article provides an overview of the statutory scheme. 

Civil Code 1950.5 defines the rules governing the accounting and return of security deposits in California.  It provides in relevant part that no later than 21 calendar days after the tenant has vacated the rental unit, the landlord must provide the tenant with a copy of an itemized statement indicating the basis for, and the amount of any security received, the disposition of the security, and shall return any remaining portion of the security to the tenant.

Contents of the Itemized Statement

The itemized statement must include copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises.  If the landlord or landlord’s employee did the work, the itemized statement must reasonably describe the work performed, the time spent and the reasonable hourly rate charged.  If someone else did the work, the landlord is obligated to give the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work, and the name, address, and telephone number of that person or entity. If a deduction is made for materials or supplies, the landlord is required to provide a copy of the bill, invoice, or receipt reflecting the deduction.

Good Faith Estimate Allowed If Statement Cannot Be Completed Within 21 Days

The landlord may make a “good-faith estimate” of charges in the itemized statement if the repair is handled personally by the landlord or an employee and “cannot reasonably be completed within the 21 calendar days,”.  A good faith estimate is also permitted where another business or contractor is involved, and the landlord does not have the invoice or receipt within the 21 days. In this case, the landlord must include the name, address, and telephone number of the business that is doing the job as part of the good faith estimate.  The good faith estimate may be deducted from the tenant’s deposit within the 21 day period. However, within 14 calendar days after completing the repairs or receiving final documentation, the landlord must give the tenant an updated itemized statement, with final receipts, and any refund of previous overcharges on the good faith estimates.

Expenses A Landlord Can Legitimately Claim in the Itemized Statement

California law allows the landlord to use a tenant’s security deposit (1) for cleaning the unit (to the same level of cleanliness existing at the time the tenant moved in), (2) to repair damages beyond “normal wear and tear”, (3) to pay for the cost of replacing property the tenant may have lost or destroyed, and (4) for covering unpaid rent.  The security deposit may also be used for any other lawful purpose expressly authorized by the lease agreement. 

Penalties for Failing to Provide Itemized Statement

California courts have held that a landlord loses the right to keep any of the security deposit and must return the entire deposit to the tenant if he or she fails to provide the required itemization within 21 days after the tenant has vacated the unit.  If this failure on the landlord’s is in bad faith, the tenant may be able to recover additional damages against the landlord of twice the amount of the security deposit.

Please contact Lynx Legal with any questions regarding the above, and for all of your eviction needs.  Our experienced staff has handled over 12,000 evictions for our satisfied customers over the years.  We can be reached at 888-441-2355 or info@lynxlegal.com.  We are standing by to assist in any way we can.