As the owner of rental property, you likely require each new tenant to post a security deposit before they move in. Under normal circumstances, you likely then return this amount to him or her when (s)he moves out at the end of the lease or other rental term.

Sometimes, however, you may need to keep a portion of that security deposit amount. The California Court System explains what amounts you can keep and when you can keep them.

Valid security deposit deductions

In general, you can use your tenant’s security deposit to pay for the following:

  • The amount you must spend to repair property damage caused by the tenant
  • The amount you must spend to clean the tenant’s unit when (s)he moves out so as to return it to the same condition it was in when (s)he moved in
  • The amount of any unpaid rent (s)he owes you if (s)he moves out without giving you proper notice

Notice to tenant

When the tenant moves out, you have 21 days in which to do the following:

  • Return his or her full security deposit OR
  • Give him or her written notice of what amount you are keeping and why AND
  • Return the balance of his or her security deposit to him or her

For your own protection, keep a written record, including receipts, of all the repair and/or clean-up costs you incur. Then give your former tenant a copy thereof.

Should you find it impossible to complete the repairs or clean-up within the 21-day period and therefore have incomplete actual receipts, you can give your former tenant the reasonable estimate of such costs on which you based your security deposit deductions. You then have 14 days from completion of the repairs and/or clean-up to send him or her the receipts and any security deposit balance you owe him or her.

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