As previously mentioned in Part I of this topic, the return of security deposit after tenancy is the most common disagreement landlords and tenants face. As a landlord, you are responsible for providing a habitable rental unit to your residents. As the tenant, you are responsible for maintaining the rented premises.

A landlord can only withhold from the security deposit amounts that are reasonably necessary for any of the four purposes explained in Part I. At the same time, the security deposit cannot be used for repairing defects that existed before a tenancy, or for deterioration caused by normal wear and tear.

With this in mind, it’s important for landlords, as well as tenants, to document the condition of their property at the time of move-in. At Dede’s Rentals in Sonoma County, we thoroughly document the condition of the property as we are “turning” it between tenants. Thereafter, when a tenant first moves in, we provide them with a Statement of Conditions Form, and allow them a sensible period of time to completely evaluate their new residence.

This gives the tenant a chance to systematically document the condition of the property and take pictures, if desired. If the tenant’s initial opinion of condition is not consistent with the landlord’s analysis, the tenant is required to communicate their concerns to the landlord. Clarifying condition of the property when the tenancy begins will allow the two parties to address items that might warrant attention. Likewise, reviewing the move-in condition will give the landlord an opportunity to identify items that should be classified as “pre-existing conditions,” and not considered to be tenant liabilities. If, at the end of tenancy, the tenant feels they were wrongfully charged, they should have documentation to “make their case.” The landlord likewise is expected to have documentation to support their position for charges assessed. Ultimately, documentation is necessary if you must convince a third party, like a judge, that a deposit deduction was (or was not) justified.

When it comes to deciding what can be deemed a “justified withholding,” it’s generally good to understand that appliances like stoves, refrigerators, and dishwashers typically last about ten years, dependent upon the manufacturer. Because of this it’s not standard practice for landlords to charge tenants unless there was serious damage or neglect done to the appliance.

For example, if a stove’s burners and receptacles were completely broken, then the tenant would likely be charged. When damage is more than what the average appliance would incur by a reasonably responsible tenant, it can be identified as a deduction from the security deposit.

Remodeling is a delicate situation for most landlords. Remodeling is typically classified as any project that substantially alters and improves the fundamental appearance of the property. Replacing carpet or painting, for example, does not qualify as a remodel. Replacing kitchen cabinets likely would be a remodel. Barring extraordinary circumstances, the landlord should not charge a tenant for improvements done to the property specifically for the purpose of making it more attractive to future renters. California landlord law clearly states:

“The security deposit cannot be used for repairing defects that existed in the unit before tenant moved in, for conditions caused by normal wear and tear during tenancy or previous tenancies, or for cleaning a rental unit that is as clean as it was when the tenant moved in.”

Thus, it is always best to never charge a tenant for discretionary remodeling or “upgrades” done to your rental unit. Your rental property is a business; it generates monthly revenue. The landlord’s goal is to increase income and limit unnecessary expenses and effort. Spending time in small claims court, arguing an unjustified case, is a waste of expense and effort. As a result, landlords should maintain fairness and good relationships with tenants throughout the tenancy, including the deposit refund process.

There are always inherent costs associated to owning rental property in Santa Rosa and beyond. Property owners have to anticipate that they will be required to invest a certain amount of money on an ongoing basis, and tenants have to realize they are expected to reasonably maintain such properties. The challenge with security deposits is to properly determine whether the tenant or owner should accept the expense and responsibility. Play fair.

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