Security Deposits

This handout has been prepared by the Legal Aid Foundation of Los Angeles to provide you with general information about tenants’ rights and security deposits. It includes a sample letter and checklist that you may find useful.

Q: What is a Security Deposit?
A security deposit is money you pay to move into a new home or apartment. In addition to the first month’s rent, landlords often require a security deposit and other fees. Section 1950.5 of the California Civil Code says that any payment paid in advance by the tenant is to be a “security deposit.” It does not matter if the deposit is called a cleaning fee, key deposit, or last month’s rent.

Q: Is the Security Deposit Refundable?
The law says that there is no such thing as a “non-refundable” security deposit. Even if the landlord tells you in writing that your deposit is non-refundable, you still have the right to get some or all of this money back after you leave your apartment.

Q: How much can I be charged for a Security Deposit?
When you move into your apartment or house, the landlord can charge you both for the first month’s rent and a security deposit. If you are renting an unfurnished apartment or house, California law says that the most you can be charged for a security deposit is two month’s rent. If you are renting a furnished apartment or house, the most you can be asked to pay is three month’s rent.

Example: The monthly rent for your new unfurnished apartment or house is $400. When you first move in, you can only be charged $1,200. $400 will be charged for the first month’s rent, and the additional $800 (which is two month’s
rent) will be designated as your security deposit.

Q: When do I get my Security Deposit back?
You can get your deposit back after you move from your house or apartment. The landlord must return the deposit within three weeks after you move. If your landlord keeps part of your deposit, he or she must give you a written, itemized statement telling you what your deposit was used for within this three-week period. Your landlord can only deduct from the security deposit any amounts that are reasonably necessary to pay for:

  • Unpaid rent – If you have not paid all of your rent
  • Damages – Any damages caused by you or your family, not including damages due to the ordinary wear and tear of the property.
  • Cleaning – Any expenses the landlord may have for cleaning your house or apartment.

Q: Can I get interest on my security deposit?
If you live within the city of Los Angeles, and are protected by the Los Angeles Rent Stabilization Ordinance1, your landlord should pay you 5% interest on your security deposit, which includes last month’s rent, after you’ve been living in the unit for 12 months. Your landlord doesn’t have to pay you the interest until you move out or after five years of occupancy. If you lived in a unit less than 12 months, your landlord doesn’t owe you any interest. If you do not live in the city of Los Angeles, you should call your local housing department to ask if there is any requirement that your landlord pay you interest.

Q: Can my security deposit be increased?
If you have already paid the maximum deposit (2 months rent if unfurnished) then your deposit cannot be increased. If you have a lease, look to see if there are any terms relating to an increase in security deposit. If you have not already paid the maximum deposit, and an increase is not prohibited in your lease, your landlord must give you a 30 day notice before increasing the deposit amount.

If you are protected by the Los Angeles Rent Stabilization Ordinance your security deposit can only be increased 3%-5% a year (or what ever percentage allowed as a rent increase in a particular year) until it reaches the maximum allowed.

Q: What happens if my landlord does not return all of my deposit?
If your landlord fails or refuses to return all or part of your security deposit, you should send a letter demanding the return of the deposit and/or an explanation of how any part of the deposit was used (for example, to pay for damages or cleaning). If you still do not receive your deposit, or if you disagree with the explanation, you can sue your landlord. Under California Civil Code 1950.5(k), you may sue for actual damages and up to $600 in punitive damages. Actual damages include the amount of the deposit and any money you have to spend because you did not have your deposit. Punitive damages are awarded if the judge finds that the landlord has kept your deposit in bad faith.

If you choose to sue your landlord, your landlord must prove that the amount he or she has deducted from your deposit is “reasonable” and is limited to the purposes stated above.

Q: Where do I go to sue my Landlord for not returning my deposit?
If the amount you are requesting is $5000 or less, you can sue your landlord in Small Claims Court.

Q: How do I prove that I am entitled to a return of my deposit?
In order to prove the condition of your house or apartment when you left, you should take pictures of the apartment or house when leaving, and/or get the landlord to walk through the unit with you and sign a paper saying that everything is left in good condition. It is also a good idea to have a witness walk through the apartment or house your deposit, or if you disagree with the explanation, you can sue your landlord. Under California Civil Code 1950.5(k), you may sue for actual damages and up to $600 in punitive damages. Actual damages include the amount of the deposit and any money you have to spend because you did not have your deposit. Punitive damages are awarded if the judge finds that the landlord has kept your deposit in bad faith. You should save receipts showing that you paid the deposit, and well as receipts to show that you paid all your rent.

To protect yourself when you move into a new apartment or house, you can prepare a checklist showing the condition of the apartment and have the landlord sign the checklist. You can then use the checklist when you move out to show that you and your family did not damage the apartment. If the landlord will not sign the checklist, you can have a friend walk through with you who can be a witness for you after you move out.

Q: What if I am being evicted and I have paid deposits?
If you have paid deposits, you should appear in court in your eviction case and ask the judge to credit any security deposit or last month’s rent to any judgment for back rent that you might owe. The law does not require the judge to do this, but some judges do.

Example: You owe the landlord $500 in back rent and you paid the landlord a $300 deposit. If the judge allows your deposit to be credited to your back rent, the judgment against you would be for $200.

If you settle your case with the landlord and he/she waives (agrees not to collect) your back rent, you should still get your security deposit unless your settlement specifically says that your are also waiving your rights to collect your deposit.

JUDGMENT
RENT OWED= $500
DEPOSIT PAID= $300
AMOUNT OWED= $200
+ DAMAGES

 

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