Disposition of Security Deposit
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What is a disposition of Security Deposit?

A disposition of security deposit is the process and outcome of handling a tenant’s security deposit when their tenancy ends. This process involves several steps and legal requirements to ensure that the deposit is appropriately returned to the tenant or used by the landlord for legitimate purposes.

What are the requirements of a Disposition of Security Deposit?

In California, landlords must adhere to specific legal requirements when handling a tenant’s security deposit upon the termination of a lease. Here are the key legal requirements:

Return of Security Deposit

• Time Frame: The landlord must return the security deposit, or the portion of it that is due, within 21 days after the tenant has vacated the property.

Deductions

• Permissible Deductions: The landlord can deduct from the security deposit for the following reasons:
  • Unpaid rent.
  • Cost of repairs for damage caused by the tenant (beyond normal wear and tear).
  • Cleaning of the rental unit to return it to the same level of cleanliness it was in at the start of the tenancy.
  • Replacement of personal property or appliances that the tenant damaged (beyond normal wear and tear).

Itemized Statement

• Requirement: If any deductions are made, the landlord must provide an itemized statement listing the amounts of any deductions and the reasons for them.
• Documentation: For repairs or cleaning costs exceeding $125, the landlord must provide copies of receipts or invoices. If repairs cannot be completed within the 21-day period, the landlord must provide a good faith estimate of the costs and follow up with receipts within 14 days of the repairs being completed.

Inspection

• Right to Inspection: The tenant has the right to request an initial inspection of the unit no earlier than two weeks before the end of the tenancy. This allows the tenant the opportunity to fix any issues before moving out to avoid deductions from the security deposit.
• Notice: The landlord must provide at least 48 hours’ written notice prior to the inspection unless the tenant waives this requirement in writing.

Interest on Security Deposit

• Local Requirements: Some cities in California have local ordinances requiring landlords to pay interest on security deposits. It is important to check local laws for any such requirements.

Legal Reference

• California Civil Code: The relevant sections of the California Civil Code that govern security deposits are §§ 1950.5 and 1940-1954.1.