Before collecting a security deposit or any rent, Santa Rosa landlords will want to get to know some of the most basic laws pertaining to how a tenant’s money is handled. Our laws are changing all the time in California, so it’s important you get this right. A mistake with your tenant’s security deposit can be expensive.
Let’s talk about some legal requirements and some best practices on handling the return of your tenant’s security deposit on your Santa Rosa rental property.
You Must Offer a Pre Move-Out Inspection
You’re legally required to offer your tenants a pre move-out inspection of the rental property before the end of their lease term. Not every tenant will accept this invitation, and not a lot of landlords like to do it. But, you need to make the offer and then follow through.
It can actually be a good opportunity. In this inspection, you’ll walk through the property with your tenant and point out things that might result in a charge against their security deposit. This is beneficial for your tenants who want to get as much of their deposit back as possible, and it’s also good for you because it lets you know what you’ll have to be prepared to repair before you rent the home out to a new tenant.
Put together a list for your tenants so they know that they either have to take care of the things on that list or prepare to lose money from their deposit to pay for them.
Conduct Your Full Inspection after Move-Out
After your tenants have turned in the keys and left a forwarding address, you’ll need to go through the vacant property and document its condition. Bring your move-in inspection report with you so you can compare the condition of the home at this point to the condition it was in when the tenants took possession. You should also take a copy of your pre-inspection checklist that you may have created after walking through the property with your tenants. See if they took care of what you instructed, and if they did it to standards that will hold up in court.
Remember that you’re not permitted to deduct anything from the security deposit for regular wear and tear. Those small nail holes in the walls and scuff marks from where the sofa rested cannot be charged to the tenant.
Take pictures to document the property’s condition. If you notice damages that are beyond normal wear and tear, you can charge for that. Make sure you can demonstrate that those things were not broken or damaged at the beginning of the lease.
Security Deposit Timelines
California law requires you to return the security deposit to the tenants within 21 days of the tenant moving out. You are permitted to charge the security deposit for tenant damage, unpaid rent and utilities, and any other costs associated with a lease break or a modification that was made to the property.
If the tenant isn’t receiving a full deposit refund, you should send the amount that they are getting back with an itemized list of what you’ve deducted and why. Be specific and include receipts, invoices, and other documentation to support what you’ve charged.
If your tenant disputes what you’ve withheld or you don’t return the deposit in time, you could face penalties of three times the amount of the original security deposit. It’s important that you know what’s expected of you, and that you follow the law.
If you’d like some help avoiding security deposit troubles with your Santa Rosa rental property, contact our team at Redwood Residential Property Management.