What rules govern the return of the security deposit to the tenant?

Q. What rules govern the return of the security deposit to the tenant?
A. Residential: Upon termination of a rental agreement on residential property, the landlord must furnish the tenant the unused portion of the security deposit and an itemized statement showing what deductions have been made, no later than 21 days after the tenant vacates the property. (Cal. Civ. Code § 1950.5(g).) The itemized statement must be accompanied by receipts or invoices issued by the person that performed the work that the deductions were used to pay for; or, if the landlord or landlord’s employee performed the work, the itemized statement must list the work that was done, the time spent, and the reasonable hourly rate charged. (Cal. Civ. Code § 1950.5(g).)
C.A.R. Sample Letter “Security Deposit Return” (Form SDR) may be used for this purpose and can be found in ZipForm within the C.A.R. Sample Letters library.
If the landlord retains any of the deposit in bad faith, s/he will be liable for up to twice the amount of the deposit in punitive damages, as well as any actual damages the tenant may suffer. (Cal. Civ. Code § 1950.5(l).)
A. Commercial: For commercial leases, the deadline for returning a deposit is generally 30 days. However, if the landlord only claims deductions from the deposit based on defaults in the payment of rent, and if the deposit exceeds one month plus the last month’s rent, then any amount exceeding one month’s rent must be returned within two weeks. (Cal. Civ. Code § 1950.7(c).) If the landlord retains any of the deposit in bad faith, s/he will be liable for up to $200 in punitive damages, as well as any actual damages the tenant may suffer. (Cal. Civ. Code § 1950.7(f).)
For more information, please see the C.A.R. Legal Q&A, Security Deposits.

Q. May a tenant take the landlord (or vice versa) to small claims court over a security deposit dispute?
A15. Yes, as long as the damages claimed do not exceed the jurisdictional limit for small claims court ($10,000 in most situations where the claim is brought by a natural person.). (Cal. Civ. Code § 1950.5(n); Cal. Code of Civ. Proc. §§ 116.220, 116.221.)

Helpful Hints to Successfully Renew Your Lease

It is up to the Tenant to notify the Landlord of his/her intention to exercise the “Option to Renew”  during the lease specified notification window. Tenants need to be vigil about lease termination dates and option exercise timelines, not only to keep their renewal options in-tact, but to have better leverage when negotiating a renewal. Furthermore, if the Tenant does not notify the Landlord, the Landlord is not obligated to allow the Tenant to renew.

Avoid Costly Mistakes

One crucial mistake that a Tenant often makes, is to assume he/she can simply go to a month-to-month term until they find another location. Most leases will have a “Holdover” clause. These clauses in the lease agreement often allow the Landlord to charge a premium of sometimes as high as 200% of the last month’s rent.

How your Commercial Broker can help you

Keep in mind, it is always best to contact your commercial real estate professional at least a year prior to the expiration of your lease term to assist with these matters.  Commercial real estate professionals can:

  • Listen to your needs and provide specific options. Is it best to move or stay?
  • Explain current market conditions and how they affect your potential move
  • Provide a Lease vs. Buy analysis to see if it makes more sense to buy rather than lease
  • Perform a comparable analysis to assist in re-negotiating with the current Landlord
  • Find a new location and negotiate terms
  • Provide a timeline for tenant improvements and assist in coordinating move

Landlord’s Responsibility on Previous Tenant’s Personal Property Left Behind.

How to handle when personal property remains on the premises after a tenancy has terminated and the premises have been vacated by the tenant.

There are specific procedures and laws in place that a landlord must follow. Failure to follow the processes and procedures outlined in this article leaves the landlord vulnerable to a lawsuit by the tenant for the possessions that were left on the premises.

  • According to California Civil Code1980-1991, the landlord is required to give the previous tenant a written “Notice of Right to Reclaim Abandoned Property”.
    • This notice needs to notify the tenant that a reasonable costs of storage may be charged before the property is returned.
    • Where the property may be claimed and the date before which the claim must be made.
    • The date specified has to be not less than 15 days after the notice is personally delivered emailed, or mailed by  first-class mail and not less than 18 days after the notice is deposited in the mail.
    • The notice shall also contain ONE of the following statements:
      (1) “If you fail to reclaim the property, it will be sold at a public sale after notice of the sale has been given by publication. You have the right to bid on the property at this sale. After the property is sold and the cost of storage, advertising, and sale is deducted, the remaining money will be paid over to the county. You may claim the remaining money at any time within one year after the county receives the money.”
      (2) “Because this property is believed to be worth less than $700, it may be kept, sold, or destroyed without further notice if you fail to reclaim it within the time indicated above.”
  • If the previous tenant pays the reasonable cost of storage and takes possession of the property not later than the date specified in the notice then the landlord, at his option, can release the property.
  • If the personal property is not released and the notice stated that the items would be sold at a public sale, the landlord will release the personal property to the former tenant if he or she claims it prior to the time it is sold and pays the reasonable cost of storage, advertising, and sale incurred prior to the time the property is withdrawn from sale.
  • Please note, if the property remained in the dwelling and the former tenant reclaims the property within two days of vacating then the landlord has to release the personal property and can not require the former tenant to pay the cost of storage.

Disclaimer: This is a summary of the California Civil Code1980-1991. Please consult the code in full prior to taking any steps to remove personal possessions left by a former tenant. The full code can be found at, CIVIL CODE SECTION 1980-1991