Proactive Protection of Your Security Deposit

Nothing lasts forever although it may seem, at the time, that there are no time limitations to tenancy.  As the market changes and rents escalate in the Bay area, many landlords are enticed to capitalize on higher profits through increased rents.  You may find yourself facing a just cause for eviction through no fault of your own (ex: an owner move-in eviction) or maybe your landlord wants to buy you out and pay you to relocate.

When you have been handed a Notice to Terminate your Tenancy, have you proactively protected all of your interests?  For instance, perhaps you put up the first and last month’s rent on an apartment renting for $1,200 per month as a security deposit. Under state law, you should have $2,400 coming via a security deposit refund. Under municipal law, you may also have earned interest on this amount.

To protect your security deposit, you must document the condition of the property on move-in day.  A state of California guide, “California Tenants: A Guide to Residential Tenants’ and Landlords’Rights and Responsibilities” (July 2012) includes a property inspection form that you can use to record any apartment defects upon move-in. See “Inventory Checklist.” I advise my clients to take digital photographs of the property condition for added assurance. On move-out day, you can use the original Inventory Checklist to record the property condition together with photographs of the property condition.

Under Cal. Civ. Code section 1950.5, your landlord has a legal responsibility to provide you with a security deposit refund and an itemized statement of any deductions within 21 calendar days after you move-out.  Lawful deductions include any unpaid rent, certain cleaning costs, and repairs.

But what if your landlord fails to follow the law? Write a DEMAND LETTER to your landlord following the format in the link to the right (see "Security Deposits.")  If after sending the DEMAND LETTER by postal mail with delivery tracking and by email, and, after one to two weeks of no-response has passed, you can file a complaint in small claims court, pay a small filing fee, and gather your evidence.  Your evidence will include your security deposit receipt together with your demand letter.

It can take 6-months to get a hearing and you will need to represent yourself in court.  The court has self-help centers that can provide guidance concerning the proper procedures.  And, Nolo Press sells well written guides to presenting your case in small claims court.

What many landlords don’t appear to know is that if the judge decides that their retention of your security deposit was made in “bad faith,” the judge can award you up to two times the value of your security deposit in addition to court costs and filing fees. 

So don’t sit on your rights. Protect your interest in your security deposit from the get-go by documenting the property condition immediately upon move-in to your new apartment and do the same when you move-out.  If you show your landlord that you are proactive with your money, this, in itself, may encourage your landlord to follow the law.  

This is not to imply that there aren’t honest landlords who follow the letter and intent of the law; there are many wonderful landlords. But for those landlords who chose to pocket your money, know that you have some legal recourse.