When it comes to collecting a security deposit from any tenant you place, at Broadpoint Properties, we’ve learned the art of handling them properly. And, believe it or not, there is a law that surrounds the collection and use of security deposits.
4 Things Every Landlord Should Know About Security Deposits
Here are 4 things that every landlord should know about security deposits:
- In the state of California, security deposits or the disposition of any security deposit must be provided to the tenant within 21 days of move out. This means that you must provide evidence of how you spent the deposit and/or return the security deposit by the 21st day of move out. At Broadpoint Properties, we take both move-in and move-out videos and photos in order to show the condition of the property at move-in and move-out. We then share those with the tenant and provide invoices for any of the items which we are charged against the security deposit.
- Landlords can only charge for items that are damaged, and cannot assess a fee for normal wear and tear. So, if the tenant has lived in your property for 10 years, new paint is going to be at the cost of the owner as most wall paint would be worn by then. Additionally, carpet that has been in place for over 7 years would also be the cost of the owner, since the life span of carpet according to HUD is only 7 years. At Broadpoint Properties, we adhere to HUD guidelines for wear and tear vs. tenant damage and apply only those charges that are tenant damage against the tenant’s security deposit.
- The maximum allowable security deposit for an unfurnished unit is two months’ rent. This means that if you are renting an unfurnished unit, you cannot require more than the equivalent of two months of rent as your security deposit amount. Doing so would be a violation of the landlord-tenant law.
- Security deposits should never be taken in payments. It is common for prospective tenants who are seeking to move to ask to pay their security deposit in multiple payments over a period of time. This is not advisable, as you are not able to evict a tenant if they have not completed their security deposit payments; you can evict for non-payment or rent and for other reasons, but not due to a non-payment of the security deposit. For this reason, Broadpoint Properties does not permit security deposits to be paid in payments. The tenant must pay the entire security deposit upfront prior to moving in.
There is a lot to know about security deposits. But, if you follow the guidelines in these 4 tips above, you will go a long way toward being a successful landlord. If you or anyone you know is seeking property management services in North County San Diego, please do not hesitate to contact Broadpoint Properties located in Escondido CA.