Rental revision changes duties of landlord
Nothing makes a renter madder than not getting a rent deposit back.
Residential security deposits is one of the most aggravating, hotly contested aspects of landlord tenant law.
In the old days, and until the end of this year, landlords merely waited until the tenant vacated, inspected the premises (or not), returned the deposit or sent a letter to the tenant identifying the reasons for any security deposit withhold. Or just kept the deposit. Then it was up to the tenant to object and maybe even sue for “bad faith” withhold of their deposit. All of that has changed.
New Civil Code Sect. 1950.5 defines residential “security” as a deposit to be used to reimburse the landlord for costs associated with processing a new tenant, including any of the following: (1) compensation for a tenant’s default in the payment of rent; (2) repair of damages exclusive of ordinary wear and tear; (3) the cleaning of the premises to the same level of cleanliness it was at the beginning of the tenancy (this clause applies to tenancies starting after Jan. 1, 2003); and (4) to remedy tenant defaults for failure to restore or replace the owner’s personal property if the rental agreement so specifies. Application screening fees may not be deducted.
The security deposit may not exceed two month’s rent if unfurnished or three months if furnished; plus rent for the first month.
NOTICE OF RIGHT TO INSPECT
Within a reasonable time after notification of either party’s intent to terminate the tenancy or before the end of the lease term, the landlord must notify the tenant in writing of the renter’s option to request an initial inspection of the premises and of their right to be present at the inspection. Landlords, calendar one month before leases expire.
No earlier than two weeks before the noticed termination (see last week’s Law Review) or the end of the lease, but not just before, the landlord or agent must, upon the request of the tenant (fax or e-mail, so you have proof, tenants), make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated. The purpose of the initial inspection is to allow the tenant an opportunity to remedy identified deficiencies. The landlord and tenant must attempt to schedule an inspection, and whether they reach agreement on a mutually acceptable time or not, the landlord must give at least 48 hours prior written notice of the date and time of the inspection, although the written notice may be waived in writing.
Based on the initial inspection, the landlord must give the tenant an itemized statement specifying repairs or cleaning that are proposed to be the basis of any deductions from the security deposit.
The statement (make two copies) must also include much of the text of revised Civil Code Sect. 1950.5 regarding security deposits. The statement must be left with the tenant or left inside the rental unit.
The renter has the opportunity during the period following the inspection, up until termination of the tenancy, to remedy identified deficiencies in the rental unit in order to avoid deductions from the deposit.
The landlord may only deduct for listed items not cured and for deficiencies that occur between the completion of the initial inspection and termination of the tenancy and for deficiencies not identified during the initial inspection due to the presence of the renter’s possessions. E.g., carpet damage hidden by furniture.
Within three weeks after the renter has left, the landlord must give the renter by personal delivery or first class mail, a copy of a statement itemizing deductions from the security deposit and must return any remaining portion.
If the landlord wrongfully withholds a portion of the security deposit in “bad faith,” the court may award damages, even if the renter does not ask for bad faith damages, up to twice the amount of the security deposit, in addition to the amount wrongfully withheld. The landlord has the so-called burden of proof as to the reasonableness of the security deposit withheld.
No residential lease may characterize a security deposit as “non-refundable.”
Editorial: This new security deposit law is an honorable effort to clean up the occasional misuse of security deposits by landlords, but it will create its own problems, principally surrounding the initial inspection.
Landlords and renters should take photographs of the rental unit when moving in and out.
Jim Porter is an attorney with Porter-Simon, with offices in Truckee, South Lake Tahoe and Reno.
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