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Explainer 

Security Deposit: Ten Steps to a Timely Refund [Updated]

Mark Elliot

State law requires that the security deposit be returned to the tenant within 21 days of move-out. Any deduction up to $125 must include an itemized list of actual expenses paid by the landlord. But too often we hear of improper deductions or even the entire deposit stolen by the landlord. The law is clear that the deposit is the tenant’s money and is to be returned minus only specific, lawful expenses. Before the landlord can steal your money protect yourself with these steps….starting with move-in.

About the Security Deposit

The security deposit is a payment intended to compensate the landlord in the event that a tenant defaults in the payment of rent; causes the landlord to repair damages to the apartment exclusive of ordinary wear and tear; or fails to leave the premises clean commensurate with “the same level of cleanliness it was in at the inception of the tenancy.”

There may be an additional deposit demanded for pets, keys, etc., but the total amount of all deposits is regulated by state law and for most tenants the amount of the total deposit that can be demanded is one month’s rent.

The deposit by law is refundable because, after all, it is the tenant’s money. The entirety of the deposit (less lawful deductions) must be returned within 21 calendar days along with an itemized list of any deductions when deductions total more than $125.

That is the letter of the law but in practice sometimes a landlord will arbitrarily withhold of some or all of the deposit without any lawful reason reason to do so. Why why wouldn’t an unscrupulous landlord work that way? After the 21 days the tenant must formally demand the money be returned and, if it is not returned, can only go to small claims court to get it back — and possibly with additional damages for withholding the money.

Ten Steps to Get Your Deposit Back

The best course of action is to maximize your chance that the landlord won’t steal your money. We offer ten steps to take in order to avoid a misunderstanding after move-out.

1) Request an ‘initial inspection.’ Every tenant has the right to a walk-though with the landlord, or the landlord’s agent, prior to turning over the keys. This is called an ‘initial inspection’ because it gives the tenant an opportunity to hear from the landlord what may need to be repaired prior to move-out.

“The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security,” says Civil Code 1950.5(f)(1). The section continues:

Within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenant’s option to request an initial inspection and of the tenant’s right to be present at the inspection…At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises…If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours’ prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. — Civil Code 1950.5 (f)(1)

We strongly urge every tenant to request an initial inspection and attend that inspection. If the landlord later makes improper deductions from the security deposit, then the tenant can point to the results of the initial inspection to support a claim that the deductions are improper because the alleged deficiencies were not indicated at the initial inspection.

2) At the initial inspection politely contest any questionable alleged damage and document the findings of the inspection.  Because the goal is to get the landlord on record about alleged deficiencies, it is important to conduct the initial inspection at a time when all areas of the apartment can be inspected but not too late to address what are identified as alleged deficiencies. The apartment should be clean — especially the kitchen, appliances and bathrooms.

Disputes over cleanliness may seem insignificant, but it is one of the most common deductions from the security deposit precisely because it is a matter of opinion. We routinely see landlords deduct $200-$400 for cleaning because, why not? It is too easy to steal that money. So use the initial inspection as an opportunity to foreclose that kind of money grab.

There are legitimate reasons to deduct from the security deposit. These often concern wall paint marred by children,  damage to window coverings, the presence of pet stains or odors and damage to walls from bolt-on furnishings. We have seen landlords try to bill a tenant for a full paint job for small nail holes! That is the sign of a crook.

So patch all big and small holes and repaint where there is obvious damage to the paint. Alternately, discuss the condition of the paint and perhaps the window coverings at the initial inspection. If the landlord forgives that damage be sure to get that in writing at the inspection.

Remember, the landlord’s agent is conducting the inspection on the landlord’s behalf. That could be a manager, a handyman or a realtor. What the agent represents to the tenant is what the landlord will have to stand behind. Just get it in writing.

Too often we see landlords bill $1,000 to $2,000 for what they represent is the need for a complete interior repainting. Nonsense. Spot-painting may be necessary; a child’s room may need to be repainted. Those costs can be deducted from the security deposit. Protest any representations otherwise.

Again the law allows a deduction for damage beyond ordinary wear-and-tear. A long-term tenant has outlived the service life of interior paint (7 to 10 years, say). In that case it is the landlord’s cost to prepare the apartment for the next tenant. Whereas a short-term tenant of 1-3 years has caused relatively ordinary little wear-and-tear and that should not be an occasion to need to repaint. Don’t let the landlord foist his cost of doing business onto the tenant.

3) Document the entire apartment at move-out. A thorough set of images and video will help the tenant make a case that she left the apartment in satisfactory condition. Those images can support a challenge to the landlord after improper deductions; and should a case go to small claims then that documentation is important evidence showing that the landlord has improperly deducted money from the security deposit.

We suggest images of every room, of the floor coverings and window treatments, and particularly of the bathrooms and the kitchen including the inside and outside of the appliances. The smart tenant snapped pictures at move-in; that provides a ready before-and-after comparison that will help to persuade a smalls claims court judge.

Also a wise tenant will have called-out any defects or deficiencies before actually singing the lease or, at the latest, before move-in, and those will have been repaired. If they are not at least called-out, the landlord could allege that they were caused by the departing tenant. With images in hand the tenant is prepared to push back on such allegations.

4) Document any repairs pursuant to the findings of the initial inspection. Communication is always the first and best option to avoid security deposit surprises. So in a memo along with the returned apartment keys, simply itemize the problems flagged by the landlord during the initial inspection and note (with images) the repairs that were completed by the tenant prior to moving out. Use the opportunity to remind the landlord that he has an obligation to timely refund the security deposit now that all issues are addressed. Be sure to include the address to which the deposit should be sent. That need not be the tenant’s actual new address; only where the deposit check should go.

Again this is about creating an evidentiary record in case a dispute about unlawful deductions later arises. For the same reason we encourage tenants to communicate about the security deposit only in writing. Accept no verbal promises or excuses. Later you may have to show a judge the landlord’s bad-faith misrepresentations.

5) If the deposit is not refunded in a timely manner then promptly follow up with a demand letter. The law is clear that landlord has 21 days to return the security deposit and, for any deduction(s) greater than $125, to provide an itemized statement and receipts for actual costs. The sooner that the landlord understands that you know the law and will assert your right to a timely refund, the more likely is the average landlord to refund it. (Find sample letter links in the ‘recommended reading’ section below.)

6) If anything is deducted from the security deposit, then scrutinize the itemized statement. All deductions above $125 for cleaning must be supported by receipts or appropriate documentation if repairs were made by the landlord’s workers. If the landlord says the work could be completed within the 21 day period, then the law requires the landlord to provide a good-faith estimate for the cost of the work — and to provide final receipts. The California Tenants Guide linked below provides an excellent overview.

7) If deductions seem questionable or improper then challenge them. We have seen not a few landlords try to bill the tenant for a full paint job even after a relatively short tenancy. That is theft, pure and simple, but under the guise of the law. Floor coverings are another opportunity for overreach. Were the floor coverings already worn? An unscrupulous landlord will try to push his own cost of doing business onto the departing tenant. That also goes for the valuation of work that the landlord claims was necessary to repair damage. Question it. Get an estimate from a different vendor. (This is where images come in handy too!)

8) Challenge receipts or vendors that don’t seem legitimate. We have seen receipts presented to tenants that don’t even pass the smell test even though they concern sums in the thousands of dollars. Take this opportunity to look at that receipt and run the vendor though google and yelp and perhaps even the state licensing authority or Beverly Hills business license search engine. Is the vendor a going concern with a website and a business license? This is also about creating an evidentiary record should the tenant have to push back on the deduction or else take the landlord to small claims court.

9) Identify examples where the landlord was disinclined to repair or replace fixtures or furnishings. This is important! If the landlord was not responsive to maintenance requests as a business practice, then call that to his attention, and to the attention of the judge, if necessary. Why should the landlord bill for minor damages if he himself was unwilling to address such conditions for a rent-paying tenant?  Again this is about evidence: in small claims court the landlord’s failure to perform could suggest bad-faith or at least undermine the credibility of the landlord’s assertions.

10) File a small claims case. This is a last resort because it takes time and effort and may be frustrating. But it is the only way to hold unscrupulous landlords to account.  The landlord must be served, a case must be made. If small claims is necessary then be prepared: prepare the evidence, file with the court, serve the landlord with paper and then be prepared to contrast for the judge the tenant’s good-faith efforts against the landlord’s bad-faith claim on the deposit. Read our explainer, Small Claims: A Tenant’s Guide for more.

Additional Reading