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What Are the Rules Surrounding Rental Security Deposits In California?

What Are the Rules Surrounding Rental Security Deposits In California?

Over 40% of California’s population are renters, so it’s easy to find tenants. The challenge lies in finding responsible residents who will keep your property clean and pay on time every month.

That’s why security deposits are necessary. If a tenant is unreliable, these fees can help you recoup lost rent and restore your property to mint condition. However, you can’t use this money to settle all your financial obligations for the apartments.

Keep reading to learn what California rental laws say about security deposits so you can avoid fines and legal action.

Security Deposit Limits in California

If you’re renting an empty unit, the greatest amount you can collect for a security deposit is 2 months’ worth of rent. For furnished units, it’s 3 times the monthly rent.

Active service members have added protections under federal law. Landlords can only charge one month’s rent as an upfront deposit for unfurnished properties. For furnished spaces, soldiers can’t be charged more than 2 months’ worth of rent.

All deposits must be refundable.

Storing Security Deposits

Security deposit laws don’t specify how to store funds. It’s best to have the money available for the length of the tenancy.

Landlords can’t use security deposits for personal expenses or cash flow issues. They’re meant exclusively for cleaning costs or damage the tenant makes.

What Security Deposits Cover

The security deposit covers unpaid rent, late fees, and other charges that may arise during the term of your lease agreement. It also covers the cost of cleaning the rental property, fixing damages, and removing items the renter may have left behind.

Eligible damages are only those caused by the tenant, not ones that result from normal wear and tear on the property. For example, you can use the deposit if someone makes an intentional hole in your wall. However, you shouldn’t expect it to pay for fixing leaky roofs or peeling paint.

Returning Security Deposits

You should return the security deposit within 21 days of the tenant leaving the property. The law requires you to provide a list of any deductions you’ve taken from the deposit, along with an invoice for each deduction over $125.

If there are no deductions for damages or cleaning fees, return the full security deposit to the renter.

Manage Security Deposits With Ease

Handling security deposits can be a time-consuming task, especially when you’re receiving money from multiple tenants and need to keep track of how much you’ve spent. If you want to make sure your finances are on point, contact Blue Line Property Management. Our team keeps track of all rental payments, security deposits, late fees, and other charges, so you don’t have to.

We’ll also perform a thorough inspection of your property and provide you with a report that outlines any damage.