Tips on Handling Security Deposit Returns - LA County Property Management

If there is one area that inspires the most disputes between landlords and tenants, it’s the security deposit. Tenants always think they are leaving the home in pristine condition and deserve to get their entire deposit back. Landlords often think that even wear and tear is the tenant’s responsibility and should be paid for out of the security deposit.

A consistent process and excellent documentation will ensure you don’t run into problems with the collection or return of your tenant’s security deposit. Today, we’re sharing some tips on staying compliant with California law and maintaining a professional relationship with your tenants.

Reasons to Keep a Security Deposit

The main reason that landlords get into trouble with security deposits is that they make deductions that are not legal or allowed. Normal wear and tear is expected, and the landlord’s responsibility to repair. So, you will have to pay to repair those small nail holes in the walls from where pictures were hanging and those scuffs on the wall from where the sofa was resting. The things that you can deduct for include:

  • Overdue or unpaid rent.
  • Property damage from abuse or neglect.
  • Lease violations.
  • Unpaid utility bills.
  • Cleaning costs.

If you are going to make deductions from the tenant’s security deposit for any of these reasons, make sure you have documentation.

Offering a Walk-Through Inspection

Tenants are entitled to a walk-through inspection before they move out. During this inspection, the landlord will point out what might be deducted from the security deposit, and the tenant has an opportunity to fix any of those problems. You’ll need to notify the tenant in writing at least 48 hours in advance that this inspection is available, and it should be scheduled within two weeks of the move out date. The tenant does not have to agree to this inspection, but you’re required to offer it. Once you complete the walk-through, provide the tenants with a list of all repairs that need to be made before the final inspection.

Security Deposit Timelines

California law requires you to return a tenant’s security deposit within 21 days of the tenant moving out. You’ll also need to include an itemized list of any deductions that were taken. If the repairs have already been made, include invoices and receipts with the itemized list. Your documentation must also show how much of the deposit was returned to the tenant.

California Security Deposit Penalties

California Security Deposit PenaltiesIf a tenant decides to dispute a charge, it’s in your best interest to work it out. Hopefully, you’ll have the necessary documentation that shows you are correct to make the deduction. You should have pictures and notes from the move-in condition inspection and the move-out inspection. You don’t want to wind up in court. If a judge finds in favor of the tenant, you’ll be required to return the full security deposit plus a punitive cost that could be up to three times the amount of the deposit.

We understand California’s security deposit law, and we can help you stay in compliance. Contact us at Bell Properties, and we’d be happy to tell you more about the best practices in the LA County property management.