Managing Security Deposits

Security deposits can be challenging to manage, and it’s usually where most of the disputes between tenants and landlords originate. We get a lot of questions from people who aren’t sure how much they should charge for a security deposit.

California Maximum Deposits
The general rule in California is that you cannot take more than three times the amount of rent as a total move-in cost. That means if you are charging $1,000 per month for your property, you can collect no more than $3,000 total from a tenant to move in and get possession of the home. That would mean $1,000 for the first month’s rent and $2,000 for the security deposit. While twice the amount of rent is acceptable for the security deposit, most landlords take the equivalent of one month’s rent. This is a great rule of thumb for unfurnished properties. When you rent out a furnished property, you can charge a little more for a security deposit. You’ll want to complete a careful inventory of your belongings and come up with better number. But this is the general rule for most unfurnished, long term rental properties.

Tenants With Pets
When you have tenants moving in with pets, we recommend that you assess the situation and the pet, and then take a separate pet deposit or a pet fee that will cover any potential damages.

Returning Security Deposits
Under California law, a landlord must return the renter's security deposit, with an itemized statement of deductions, within 21 days after the renter has surrendered the rental property to the landlord (that is, returned the keys and vacated the property).

If you have any questions about how to manage the security deposit collection and disbursement, please feel free to contact us at 1-510-649-3380.