Collect a Security Deposit to Protect Your Property


The security deposit is one of the ways landlords are able to protect themselves financially from tenants who are careless or rough on property. Requiring a security deposit at least equal to a month’s rent can also protect landlords from tenants who are financially unstable or who move out without giving notice. Note that security deposits are separate from first and last month’s rent and must be held in an escrow account. Legally, it’s the tenant’s money, unless the landlord needs to use to repair damages made by the tenant.

In California, deposits for furnished units may be up to three times the monthly rent; for unfurnished units, deposits may be up to twice the monthly rent. The deposit must be returned to the tenant within 21 days of the end of the lease. If the landlord is going to keep some or all of the deposit, the tenant must be provided with an itemized invoice and receipts explaining the work necessary.

Problems with returning security deposits can be avoided by carefully documenting the state of the unit before the tenant takes occupancy. Take photographs or a video. Provide the tenant with access to the documentation so there is no confusion. Before tenants move out, the landlord may inform them of their right to request an “initial inspection”. Both the landlord and tenants are present for the inspection. This may turn up any issues and give tenants a chance to correct them before moving out.

To learn more about the legal issues with security deposits and get ideas for how to handle deposits fairly, click here to go to the California Department of Consumer Affairs webpage on the subject. A Santa Cruz Property Management company will be familiar with the laws governing security deposits and can help you deal fairly with them.