Deposits

Part of the cost of finding a new apartment is the deposit you will have to make to move in or even hold it for you. The sections below will provide you with information on holding deposits and security deposits, as well as what to do if your deposit is not refunded when you move out.

Holding Deposit

If you agree to rent an apartment but are not going to move in immediately, the landlord may ask you for a holding deposit. This is a cash deposit to hold the unit, usually for a stated amount of time, until you pay the first month's rent and security deposits. If you change your mind about moving in, the landlord may be able to keep your deposit.

Ask the following questions before paying any deposit:

  • If you decide to rent the unit, will the holding deposit be applied to the first month's rent?
  • Is any of the holding deposit refundable if you change your mind about renting?
  • Ask for a deposit receipt.

Security Deposit

The security deposit is often referred to as 'last month's rent' or a 'cleaning deposit.' Regardless of the name, the same principles apply.

A security deposit is an amount given to the landlord to guarantee that you will fulfill the terms of the rental agreement and that you will leave the unit in good condition. Almost all landlords in San Francisco require a security deposit in addition to your first month's rent.

For more information on security deposits, see also www.sfgov.org.rentboard.

Receipt

Make sure your rental agreement clearly states that the amount of the security deposit and the date you paid it. If you paid by check, you may also want to note the check number on the rental agreement. Always obtain a receipt for a security deposit.

Deposit Amount

State law limits the amount a landlord can require for a security deposit. The total amount cannot be more than the equivalent of two month's rent for an unfurnished unit, or three month's rent for a furnished unit.

Interest

The San Francisco Administrative Code requires landlords to pay simple interest on security deposits unless the rent is subsidized by a government agency. The current rate until February 28, 2011, is 0.9% on money held over one year. Many landlords prefer to take the interest amount off of your rent instead of paying it directly to you.

Refund

Under California law, security deposits are refundable. There is no such thing as a 'non-refundable' security deposit. All money that you pay up front, except any monies that go towards your rent, must be paid back to you as long as the rental agreement is honored.

The law allows landlords to retain all or part of your deposit under certain circumstances, including compensation for the following:

  • Outstanding unpaid rent
  • Cleaning the unit after you move out, if the unit was not left as clean as when you moved in
  • Replacing or restoring furniture, furnishings, keys, or other items belonging to your landlord
  • Any damage beyond normal wear and tear
  • Vacating the unit without giving your landlord written notice 30 days in advance

Within 21 days after you move out, your landlord must either:

  • send you a full refund of the security deposit, including any unpaid interest, or
  • send you an itemized statement that lists the reasons for the amount of any deductions from the deposit.

 

Note for Roommates and Subletters:

Landlords do not have to return the security deposit to anyone other than the person who originally paid that deposit on the lease. For roommates living together, it is important to understand the best way to deal with the security deposit. If the tenant who paid the deposit moves out while the other tenant stays, it is a good idea to have the landlord pay the security deposit back to the person leaving and then have the remaining tenant pay a new deposit on the lease. This will ensure that the new tenant will be able to get the security deposit back when s/he chooses to move out.

If your deposit is not refunded

If your deposit is not returned to you, here are suggestions on how to proceed:

  • Write a letter to your landlord demanding your deposit. In the letter, inform the landlord that s/he is in violation of California Civil Code, Section 1950. Keep a copy of the letter and mail it via Certified Mail in order to get a receipt of delivery from the post office.
  • If the landlord does not respond, fill out a form for Small Claims Court. If the landlord refuses to return the deposit within 21 days, you may be entitled to additional penalty charges if you can prove that the landlord acted in bad faith. The burden of proof is on the landlord, meaning the s/he must be able to prove why s/he is not returning your money.
    Nonetheless, it is always a good idea to be prepared to prove that you left the unit in good condition, and that you have no unpaid rent outstanding. Having pictures of the unit at move-in and move-out will help to document the condition of the unit.

Small Claims Court is used to settle claims up to $7,500 without the delay and cost of going through a normal court process. You do not need an attorney for Small Claims Court. However, it is important that you have the appropriate documentation for your case, including any letters, receipts, or photographs.

For more information on Small Claims Court:
Tel: (415) 551-4000
Web: www.courtinfo.ca.gov/selfhelp/smallclaims

 

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