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Common Security Deposit Mistakes Pleasanton Landlords Make

Disclaimer: This document and any information contained herein are provided for informational purposes only and do not constitute legal advice. The author of this document is not an attorney, and the information presented should not be considered as a substitute for professional legal advice.

Security deposits are the leading cause of litigation between Pleasanton, CA Landlords and Residents. Pleasanton has no special regulations, but California has strict laws governing security deposits, including limits on the amount Landlords can charge and specific timelines for returning deposits after a Resident returns possession. Familiarize yourself with the California Civil Code, particularly sections 1950.5 and 1950.6, to ensure you're in compliance with the law. While some controversy is unavoidable, Landlords can reduce the number of disputes they face and decrease their liability by avoiding these mistakes. 

Collecting Too Much

The maximum amount that can be collected as a security deposit is set by law. Prior to July 1, 2024, California Landlords can collect up to two months’ rent for unfurnished units and three months’ rent for furnished units, unless the Resident is a military service member, which caps security deposits at one times the rent. After July 1, 2024, AB12 limits security deposits to one month’s rent for most residential units unless the owner qualifies for an exception. This cap includes all deposits, no matter what they are called. For example, it is not permitted to collect a “pet deposit,” “cleaning deposit” or “key deposit” which would make the total security deposit amount exceed the legal maximum. 

Delaying The Return

Security deposits must be returned within 21 days of the Resident returning possession (even if it’s before the end of the lease term), along with an itemized statement for any deductions. If you can’t return the security deposit within 21 days, there is an allowance for an estimate disposition, but there are additional regulations to follow. 

Poor Documentation

The law requires the Landlord to provide copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, including bills, invoices, or receipts for work done. One of the most crucial steps in justifying a security deposit deduction is having proof of damage. Take detailed videos, photographs, 360 images, and notes. Have the Resident sign the report just after move-in acknowledging the condition. Your documentation should be date stamped, and each image should be labeled with what it is to avoid confusion later (i.e. smoke detector in bedroom 2). This documentation will serve as evidence in the case of any disputes over security deposit deductions. 

Ignoring the Initial Inspection

California Civil Code § 1950.5 gives Residents the right to request that the Landlord make an inspection of the Premises prior to moving out. Landlords are required to notify Residents of this right and perform the initial inspection if requested. After the inspection, Landlords must provide the Resident with a list of possible security deposit deductions and give the Resident a copy of California Civil Code § 1950.5. 

Automatic Deductions

Security Deposits must be fully refundable; California does not permit automatic security deposit deductions. Deductions from the security deposit for repairs or cleaning may only be made to return the unit to the same condition, exclusive of normal wear and tear, or the level of cleanliness it was in at the inception of the tenancy. 

Disposing of the Resident’s Property

It’s common for a Resident who recently moved out to leave some personal belongings in the home. Landlords can’t just dispose of the personal property if the value exceeds $700. It’s important to get an estimate of value from a third party before hauling anything off. If the value exceeds the $700 limit, there’s a specific legal process that must be followed to dispose of the personal property. 

These are only six of the numerous common mistakes that we frequently see Landlords make. If they make a mistake, landlords can face legal penalties, such as being ordered to pay significant sums above the original deposit amount to the Resident. We strongly recommend that you take the time to educate yourself and be conservative when making deductions to a resident’s security deposit. 

California’s legal landscape continues to reshape the Landlord/Tenant relationship. As the business environment becomes more complex, the importance of having professional representation becomes of greater importance. Advantage Property Management Services understands the challenges that small mom-and-pop Landlords face when new laws like this are passed. We are here to guide Landlords and help them grow their wealth without the work. Feel free to contact us to discuss your rental real estate needs.