Security Deposits

Chances are that you have handed over a lot of money in order to move into your rental unit. This is your money. In San Francisco, your landlord must pay you interest every year (unless the rent is assisted by a government agency), and return your deposit to you when you move out if there is no damage. The landlord must agree to do a pre-move-out inspection and can only withhold your deposit for certain specific reasons.

If your landlord does not return your security deposit, you will need to sue in Small Claims Court or Superior Court. You can sue by yourself in Small Claims Court but suing in Superior Court will probably require an attorney.


Moving In

When you move in, your landlord will ask for some type of deposit. Whatever it’s called, the law treats this initial payment as security deposit subject to California Civil Code Section 1950.5.

According to this state law:

  • There is no such thing as a “nonrefundable” security deposit. No matter what it’s called—a key deposit, cleaning fee, move-in fee, pet deposit, closing costs, last month’s rent, etc.—all money you pay in addition to your first month’s rent is refundable except for an application screening fee, holding deposit, or if the property is totally destroyed. Since “nonrefundable” deposits are illegal, don’t worry if your rental agreement includes a section about a “nonrefundable” deposit. This section will not be valid even if you have signed the rental contract.
  • No matter what it’s called, the total amount the landlord can charge for all the deposits (including last month’s rent) is twice the amount of one month’s rent for an unfurnished place or three times one month’s rent for a furnished place.


Protecting Your Deposit When Moving In

Take some of these basic precautions when you move in. Many tenants end up going to Small Claims Court to get their deposits back and these precautions can give you needed evidence.

  • Get an itemized receipt for your deposit. This receipt will identify each charge ( for example, pet deposit, last month’s rent, cleaning fees, etc.).
  • When moving in, take careful inventory of the condition of the place. Record any existing damage and check all appliances to make sure they work properly. Ask the landlord to sign and date the inventory and be sure to keep a copy (if s/he won’t sign, take pictures, videos, and/or witnesses of the existing condition of the rental unit).


Moving Out

The law requires that a landlord do a pre-move-out inspection with you if you ask, let you fix identified deficiencies and limits what can be withheld. It also says how long the landlord has to return your money and what he or she must do to justify any withholding.

According to California Civil Code Section 1950.5:

  • The landlord must notify you in writing that you have the right to an inspection and must conduct an inspection of the rental unit with you. The inspection should be done in the last 2 weeks of tenancy. The landlord must let you fix anything which is wrong if it is consistent with the rental agreement and the landlord is limited to taking deductions for deficiencies not fixed by the move-out.
  • If your security deposit is not returned or accounted for within 21 days, you can sue the landlord in Small Claims Court (limit is $10,000; if higher, then lawsuit would be in Superior Court) for the amount of the deposit and any other loss by the tenant, plus twice the amount of the deposit if you can show bad faith retention of the deposit by the landlord.
  • Your deposit must be returned to you within 21 days after you move out unless the repair cannot reasonably be finished within 21 days. Your landlord must give you a written, itemized statement of the reason for any amount withheld from your deposit. Money can deducted for amounts that are “reasonably necessary” including:
    • •Unpaid Rent (talk to a counselor if you are breaking a lease or giving less than 30 days’ notice).
    • •Damage caused by you beyond normal wear and tear.
    • •“Reasonable” cleaning charges.

Landlords must provide receipts documenting the costs of claimed repairs or estimates, unless the landlord does the work themselves (in which case they must describe the work done). In either case, if materials are purchased, copies of the purchase receipts must be provided (or estimates).


Last Month’s Rent Paid by Using Deposit

Depending on where you’re moving to or what your landlord is like, you may want to think about applying your security deposit to your last month’s rent.

  • If all or part of your security deposit is called “last month’s rent” on your rental agreement, then applying this amount to your last month’s rent is simply what your rental agreement allows.
  • If part of your deposit was not specifically for last month’s rent, you are supposed to pay rent the last 30 days you are there (even when the security deposit is larger than or equal to one month’s rent). However, if you think it will be difficult to get your landlord to return the security deposit, you may want to use your deposit towards your last month’s rent. Write a note and keep a copy explaining that you need your money for moving expenses, and that you intend to leave the place clean (you may even offer to have the landlord inspect right then to look for damage).
  • If your landlord doesn’t like this solution, the landlord is required to send you a 3-day notice to pay the rent or move out. If you don’t do either, the law says that you cannot be locked out, have your things removed, or be harassed in order to make you leave. Your landlord must take you to court to regain possession of your rental unit (unless you are a sole lodger sharing the rental unit with the landlord). Since you are moving anyway, and your landlord already has your money for that month, chances are your landlord would find that taking you to court would be a big waste of time and money.


Protecting Your Deposit When Moving Out
  • Be sure to give at least 30 days written notice (by certified mail or with proof if the notice is delivered in person) before you move out. Technically, you are responsible to pay rent for these 30 days and your landlord can deduct “unpaid rent” from your deposit. If you need to move quickly because of conditions in your rental unit or if you are breaking a lease, talk to one of the Tenants Union counselors.
  • On the day you move out, have the landlord or manager do a final inspection of the rental unit with you. Try to arrange an exchange of your keys for your security deposit. Or have the landlord/manager sign and date a statement that the place is clean and in good condition. If the landlord won’t exchange keys or sign a statement, take pictures/videos (hold up a copy of the day’s newspaper to show the pictures were taken that day) and have witnesses examine the condition of the rental unit.


Suing Your Landlord

If your landlord does not return your money on time or if he or she unjustly withholds some of it, be prepared to assert your rights. Remember, many landlords withhold all security deposits knowing that many tenants will not take the steps to get back their money.


Small Claims Court
  • Send a letter to your landlord requesting the money. Refer to the Security Deposit Laws (California Civil Code Section 1950.5). Give the landlord a deadline date of when you expect the money, for example, a week.
  • If the landlord doesn’t respond within a reasonable time, you can take him or her to Small Claims Court for a small filing fee. In addition to the disputed money, you can sue for statutory damages for your landlord’s illegally withholding your deposit. Small Claims Court is informal and no lawyers are allowed. A hearing will be held. You will tell your side of the story and the landlord will tell his or her side. Your written documentation (receipts, inspection report, photos, witnesses, etc.) will help your case. You must sue in the city where the rental was—if you rented in San Francisco then you must sue in San Francisco court.


Interest on Security Deposits

If you are a tenant in San Francisco, except for government-subsidized tenants, the landlord must pay you interest each year on your deposit after September 1, 1983. The landlord must pay this at least once a year and may deduct for a Rent Board Fee.”

If you don’t get your interest paid to you annually, you may either withhold it from your rent or sue the landlord in Small Claim Court. It is safer to pay and sue.


Increases in Security Deposits

  • There is nothing in the law which allows your landlord to raise your security deposit amount over time.
  • If your landlord tries to do this, file an “unlawful rent increase petition” with the SF Rent Board if you are covered under rent control. If you do not pay this increase, you can not be evicted for nonpayment of rent, since the security deposit is not considered rent.


Updated 12/17.

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