Sacramento Property Management

Sacramento Property Management Blog

3 Things Landlords Need to Know About Rental Deposit Returns

Alexandra Goldthwaite - Thursday, January 19, 2023
Property Management Blog

Did you know that almost 44% of California residents rent? This makes California the second-largest tenant population in the country behind New York.

Since there are a lot of renters in California, landlords are likely to come across one that has an issue with their rental deposit.

Keep reading to learn three things to know about security deposits and deductions.

1. Rental Deposit Laws Vary by State

Each state has security deposit laws that tenants and landlords must follow. This includes knowing whether or not landlords can keep all or a portion of the tenant rental deposit.

In California, a landlord must return the security deposit to the tenant within 21 days. If they believe that there should be deductions for the security deposit, the landlord must mail or personally give the tenant the following:

  • A written letter explaining why they are keeping part or all of the deposit
  • An itemized list of each deduction
  • Any remaining refund of the security deposit

Unless the repairs cost less than $126 or the repairs cannot be finished within 21 days, the landlord doesn't have to include copies of the receipts. However, the landlord should send the tenant a good faith estimate of repair costs.

After the repairs are finished, the landlord has to send receipts to the tenant within 14 days.

2. Not Everything Can Be Deducted

In California, a landlord can deduct a few different things from the security deposit. The most common security deposit deduction goes towards the cost of fixing damages to the property, not including general wear and tear.

The cost of cleaning the unit after a tenant moves out can also be deducted from the rental deposit if the unit isn't as clean as it was when the tenant moved in.

If a tenant doesn't provide the landlord with proper notice that they are moving out or is behind on rent, landlords can use the deduction for unpaid rent. If tenants are consistently late to pay rent, learn about tenant eviction laws.

Landlords can only withhold money from the security deposit when the amounts are reasonable and necessary.

3. Tenants Can Dispute Deductions

If a landlord doesn't submit a rental deposit return within the 21 days required by law or if the tenant doesn't agree with the deductions, they can write a letter to the landlord.

In the letter, a tenant must explain why they believe they deserve a larger refund. If you and the tenant cannot agree on the security deposit amount, the tenant might file a lawsuit for:

  • The amount of the rental deposit
  • Twice the amount of the security deposit in damages

To keep tenants from disputing your deductions, it's essential to keep records of the rental property's condition. Using the evidence you have, you can prove that a tenant damaged the property.

Rental Deposit Returns: The More You Know

The more you know about rental deposit returns, the better. Landlords should follow the laws in their state to ensure deposit deductions are legal.

Keep evidence of the condition of rental property units to decide on the rental deposit return amount.

For help managing your rental property and understanding the laws in California, hire a rental property management team. Contact us today to discover what we can do for landlords like you.