According to the California Department of Consumer Affairs, the single most common reason for dispute between landlords and tenants is over the refund of the tenant’s security deposit after they have moved out of a rental unit. In order to avoid such conflicts, it’s recommended that both landlord and tenant treat this process as a straightforward business transaction, keep an open line of communication, and “document, document, document.”

Give Proper Notice

As a tenant, if you wish to end your rental agreement it’s critical that you provide a WRITTEN notice of intent to vacate. By law, it needs to be provided to the landlord at least 30 days prior to your intended move-out date. The notice should have at least three details: the names (and signatures) of tenant(s), the property address, and some phrase to the effect, “we are moving out.” Lacking any of those, the notice would not be enforceable. To avoid future disagreements, it’s wise to also date the notice, state your intended date of move out, and make a copy for your own file. Do not give verbal notice to vacate, and likewise please don’t presume the landlord should accept verbal notice; verbal notices are in all instances unenforceable.

If you are the rental property owner, Dede’s Rentals in Sonoma County suggests that you insist that notice from the tenant be documented. If you are informed by your tenant in conversation that they plan to vacate, ask that they put it in writing. Once you have received notice, the “move-out process” should start promptly. It is strongly recommended, during this initial stage, that you inform the tenant of their right to a preliminary evaluation.

Preliminary Inspection Process

According to California law, a landlord must notify the tenant of their right to a “preliminary inspection.” The purpose of this inspection is to provide the tenant with guidance, and a fairly thorough analysis of what the tenant must do to avoid deductions from their security deposit. The inspection has to be scheduled within the last two weeks of the tenancy, and the landlord must give at least 48 hours’ notice PRIOR to the intended appointment. During the preliminary inspection, the landlord will evaluate the property condition as it relates to the tenant’s responsibilities, also letting them know of any additional items the tenant needs to take care of prior to move out. During this visit, both landlord and tenant can also address any questions regarding the remainder of the move-out process, the tenant’s forwarding address, likely security deposit calculations and deductions, and what final steps the tenant must take to “relinquish” the property.

Itemized Statement Based on Preliminary Inspection

Based on the observations from the preliminary inspection, the landlord must prepare an itemized statement, detailing what needs to be cleaned or repaired to avoid deductions from the security deposit. The itemized statement, and analysis of tenant’s remaining obligations, should be thorough, accurate and complete as of the date of the appointment. The tenant should be given a copy of this report.

As a final observation regarding the preliminary inspection: interestingly, California law does not actually require that this service be performed. What IS required is that the tenant be informed of their right to this process, if they desire. As an additional note: DeDe’s Rentals decided long ago to ALWAYS schedule pre-inspections prior to move out; we’ve found that the additional step benefits everyone.

Tenant Preparations Prior to Move Out, and Relinquishment of the Residence

The most important thing a tenant can do prior to move out, to ensure a prompt and full return of their security deposit, is to prepare the unit thoroughly. Many property managers will provide a written “overview” to help guide tenants in the necessary steps. Proper housecleaning should include appliances, carpets, bedrooms, closets, bathrooms, light fixtures, windows and window coverings. Make sure all belongings are removed from the property, inside and out; it is not the landlord’s responsibility to remove items left behind because the tenant “ran out of time.” If personal items remain, those items can usually be thrown away by the landlord without reservation, and the disposal fee charged to the tenant. Lastly, if the rental contract stipulates that the tenant is responsible for yard maintenance, make sure it is left in appropriate condition. Typically, the tenant’s rental contract may identify other obligations required in the course of move-out, so it is wise to review the details of the original agreement and any contract revisions that may have been instituted. After the property has been completely vacated and prepared, take pictures to limit the likelihood of future dispute.

Tenants are liable for the property until possession has been delivered to the landlord. DeDe’s Rentals requires that the keys (and any other access items, like garage remote openers, mailbox keys and condo pool keys) be delivered to their office. Please don’t just leave the keys on the kitchen counter! Tenants should be prompt in the delivery of keys – until the property is turned over, the landlord can charge rent for each day the residence is “in the tenant’s possession.”

Landlord’s Move-Out Inspection and Preparation of the Residence

Once the landlord has keys and access, the move-out inspection should be performed promptly. Some landlords may allow the tenant to attend and participate in that inspection, but it is not “required by law.” DeDe’s Rentals traditionally does not include tenants in this step of the process; we feel the preliminary inspection noted above has already given tenants comprehensive guidance on the expected property condition at vacancy. The landlord should make detailed notes and take photographs during this inspection, particularly if the landlord anticipates that the tenant will be liable for damages. Having pictures is just another form of documentation that can help a landlord if a tenant tries to claim they didn’t cause damage to the property. “Before” and “after” photographs are compelling and convincing if a small claims action is pursued.  If taking pictures, make sure that they are “date stamped.”

For landlords, the move-out process should usually be fairly straightforward. As stated in California Civil Code 1950.5, the security deposit can be used to clean or repair damages to the premises “to return the unit to the same [condition] it was at the inception of the tenancy, exclusive of normal wear and tear.” Most appliances, installations and systems throughout the residence have a perceived “lifespan.” If the tenant, through their actions or neglect, cause any items to need replacement or repair earlier than standard depreciation would anticipate, the tenant could be liable for some or all of the resultant cost.

In addition to property damages, the security deposit may be used for a tenant’s “default in the payment of rent.” If the tenant vacated owing rent, that may also be deducted from the deposit.

By law, the landlord has 21 days to get the security deposit released to the prior tenant. The landlord’s documentation to the tenant should include a summary of all deductions. Additionally, invoices should be included for any repairs that the tenant is liable for. In the event that there are projects that are underway, but not yet complete, the landlord should provide the vendor’s written estimate or contract, rather than an invoice. As additional documentation, DeDe’s Rentals recommends that, if a preliminary inspection was performed, a copy of that report be included.

If the landlord and tenant have each been thorough, detailed and fair throughout this process, there are rarely disputes once the accounting is finished and delivered. However, the tenant may disagree with the landlord’s accounting. Of course, they are entitled to do so. If so, Dede’s Rentals requests and requires that the tenant state their position in writing, with as much detail and explanation as the tenant is willing to provide. By having something in writing, the landlord will get a better sense of the tenant’s thoughts and expectations. While security deposit refund disputes do occur, they can frequently be avoided or resolved by proper documentation, sensible business practices and a willingness to communicate.

If you have any questions please feel free to contact us at DeDe’s Rentals. We will be happy to help you.