AB 2801: Tenancy: security deposits.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2024-09-19
Current Status:
Passed
(2024-09-19: Chaptered by Secretary of State - Chapter 280, Statutes of 2024.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law regulates the terms and conditions of residential tenancies, including limitations on the demanding or receiving of security, as defined, from a tenant and charging amounts against the tenant or the security. Existing law limits the landlords claim of the security to only those amounts as are reasonably necessary for specified purposes, including, but not limited to, the repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant, and the cleaning of the premises upon the termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy.
Existing law prohibits a landlord from asserting a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
This bill would limit claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee to the amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear. The bill would also prohibit a landlord from requiring a tenant to pay for, or asserting a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition that it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
Existing law requires the landlord to notify, within a reasonable time after notification of either partys intention to terminate the tenancy or before the end of the lease term, the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. Existing law sets forth procedures for requesting the inspection and requires the landlord to give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security, as specified. Existing law provides that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of the initial inspection and termination of the tenancy or that were not identified during the initial inspection due to the presence of a tenants possessions.
This bill would instead provide that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of initial inspection and when possession of the unit is returned to the landlord or that were not identified during the initial inspection due to the tenants possessions. The bill would also prohibit the landlord from using the security for deductions for repairs or cleanings that are not identified in the itemized statement, if an initial inspection is conducted and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions.
Existing law requires, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than a specified time, the landlord to furnish the tenant an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and to return any remaining portion of the security to the tenant. Existing law requires the itemized statement to be accompanied by copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, including a copy of the bill, invoice, or receipt for materials or supplies deductions.
This bill would require, for tenancies that begin on or after July 1, 2025, a landlord to take photographs of the unit immediately before, or at the inception of, the tenancy. The bill would also require, beginning April 1, 2025, the landlord to take photographs of the unit within a reasonable time after possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make deduction from or claim against the security deposit, as described, and within a reasonable time after such repairs or cleanings are completed. The bill would additionally require the landlord to provide, as described, these photographs along with and at the same time the itemized statement is sent, along with a written explanation of the cost of the allowable repairs or cleanings. The bill would prohibit the landlord from making a claim against the tenant or the security if the landlord, in bad faith, fails to comply with these itemized statement requirements.
This bill would make other nonsubstantive changes.
This bill would incorporate additional changes to Section 1950.5 of the Civil Code proposed by SB 611 to be operative only if this bill and SB 611 are enacted and this bill is enacted last.
Existing law regulates the terms and conditions of residential tenancies, including limitations on the demanding or receiving of security, as defined, from a tenant and charging amounts against the tenant or the security. Existing law limits the landlords claim of the security to only those amounts as are reasonably necessary for specified purposes, including, but not limited to, the repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant, and the cleaning of the premises upon the termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy.
Existing law prohibits a landlord from asserting a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
This bill would limit claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee to the amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear. The bill would also prohibit a landlord from requiring a tenant to pay for, or asserting a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition that it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
Existing law requires the landlord to notify, within a reasonable time after notification of either partys intention to terminate the tenancy or before the end of the lease term, the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. Existing law sets forth procedures for requesting the inspection and requires the landlord to give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security, as specified. Existing law provides that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of the initial inspection and termination of the tenancy or that were not identified during the initial inspection due to the presence of a tenants possessions.
This bill would instead provide that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of initial inspection and when possession of the unit is returned to the landlord or that were not identified during the initial inspection due to the tenants possessions. The bill would also prohibit the landlord from using the security for deductions for repairs or cleanings that are not identified in the itemized statement, if an initial inspection is conducted and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions.
Existing law requires, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than a specified time, the landlord to furnish the tenant an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and to return any remaining portion of the security to the tenant. Existing law requires the itemized statement to be accompanied by copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, including a copy of the bill, invoice, or receipt for materials or supplies deductions.
This bill would require, for tenancies that begin on or after July 1, 2025, a landlord to take photographs of the unit immediately before, or at the inception of, the tenancy. The bill would also require, beginning April 1, 2025, the landlord to take photographs of the unit within a reasonable time after possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make deduction from or claim against the security deposit, as described, and within a reasonable time after such repairs or cleanings are completed. The bill would additionally require the landlord to provide, as described, these photographs along with and at the same time the itemized statement is sent, along with a written explanation of the cost of the allowable repairs or cleanings. The bill would prohibit the landlord from making a claim against the tenant or the security if the landlord, in bad faith, fails to comply with these itemized statement requirements.
This bill would make other nonsubstantive changes.
This bill would incorporate additional changes to Section 1950.5 of the Civil Code proposed by SB 611 to be operative only if this bill and SB 611 are enacted and this bill is enacted last.
Existing law regulates the terms and conditions of residential tenancies, including limitations on the demanding or receiving of security, as defined, from a tenant and charging amounts against the tenant or the security. Existing law limits the landlords claim of the security to only those amounts as are reasonably necessary for specified purposes, including, but not limited to, the repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant, and the cleaning of the premises upon the termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy.
Existing law prohibits a landlord from asserting a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
This bill would limit claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee to the amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear. The bill would also prohibit a landlord from requiring a tenant to pay for, or asserting a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition that it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
Existing law requires the landlord to notify, within a reasonable time after notification of either partys intention to terminate the tenancy or before the end of the lease term, the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. Existing law sets forth procedures for requesting the inspection and requires the landlord to give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security, as specified. Existing law provides that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of the initial inspection and termination of the tenancy or that were not identified during the initial inspection due to the presence of a tenants possessions.
This bill would instead provide that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of initial inspection and when possession of the unit is returned to the landlord or that were not identified during the initial inspection due to the tenants possessions. The bill would also prohibit the landlord from using the security for deductions for repairs or cleanings that are not identified in the itemized statement, if an initial inspection is conducted and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions.
Existing law requires, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than a specified time, the landlord to furnish the tenant an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and to return any remaining portion of the security to the tenant. Existing law requires the itemized statement to be accompanied by copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, including a copy of the bill, invoice, or receipt for materials or supplies deductions.
This bill would require, for tenancies that begin on or after July 1, 2025, a landlord to take photographs of the unit immediately before, or at the inception of, the tenancy. The bill would also require, beginning April 1, 2025, the landlord to take photographs of the unit within a reasonable time after possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make deduction from or claim against the security deposit, as described, and within a reasonable time after such repairs or cleanings are completed. The bill would additionally require the landlord to provide, as described, these photographs along with and at the same time the itemized statement is sent, along with a written explanation of the cost of the allowable repairs or cleanings. The bill would prohibit the landlord from making a claim against the tenant or the security if the landlord, in bad faith, fails to comply with these itemized statement requirements.
This bill would make other nonsubstantive changes.
This bill would incorporate additional changes to Section 1950.5 of the Civil Code proposed by SB 611 to be operative only if this bill and SB 611 are enacted and this bill is enacted last.
Existing law regulates the terms and conditions of residential tenancies, including limitations on the demanding or receiving of security, as defined, from a tenant and charging amounts against the tenant or the security. Existing law limits the landlords claim of the security to only those amounts as are reasonably necessary for specified purposes, including, but not limited to, the repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant, and the cleaning of the premises upon the termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy.
Existing law prohibits a landlord from asserting a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
This bill would limit claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee to the amount necessary to make reasonable replacements. The bill would limit claims against the tenant or the security for materials or supplies related to repairs to those necessary to restore the premises back to the same condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear. The bill would also prohibit a landlord from requiring a tenant to pay for, or asserting a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services. services, unless reasonably necessary to return the premises to the condition that it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
Existing law requires the landlord to notify, within a reasonable time after notification of either partys intention to terminate the tenancy or before the end of the lease term, the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. Existing law sets forth procedures for requesting the inspection and requires the landlord to give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security, as specified. Existing law provides that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of the initial inspection and termination of the tenancy or that were not identified during the initial inspection due to the presence of a tenants possessions.
This bill would, if an initial inspection is conducted, would instead provide that the initial inspection and related requirements do not prevent a landlord from using the security for specified purposes that occur between completion of initial inspection and when possession of the unit is returned to the landlord or that were not identified during the initial inspection due to the tenants possessions. The bill would also prohibit the landlord from using the security for deductions for repairs or cleanings that are not identified in the itemized statement. statement, if an initial inspection is conducted and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions.
Existing law requires, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than a specified time, the landlord to furnish the tenant an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and to return any remaining portion of the security to the tenant. Existing law requires the itemized statement to be accompanied by copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, including a copy of the bill, invoice, or receipt for materials or supplies deductions.
This bill would require, for tenancies that begin on or after July 1, 2025, a landlord to take photographs of the unit immediately before, or at the inception of, the tenancy. The bill would also require, beginning April 1, 2025, the landlord to take photographs of the unit within a reasonable time after possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make deduction from or claim against the security deposit, as described, and within a reasonable time after such repairs or cleanings are completed. The bill would additionally require the landlord to provide, as described, these photographs justifying the cost of repairs or cleanings, as described, and would clarify that the landlord is required to include, along with and at the same time the itemized statement is sent, the specified copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises. along with a written explanation of the cost of the allowable repairs or cleanings. The bill would prohibit the landlord from making a claim against the tenant or the security if the landlord landlord, in bad faith, fails to comply with these itemized statement requirements.
Existing law provides that the bad faith claim or retention by a landlord or their successors in interest of the security or any portion thereof in violation of the law may subject to the landlord or the successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages.This bill would instead provide that the landlord or their successors in interest may be subject to statutory damages of up to 3 times the amount of the security, in addition to actual damages, the costs associated with filing an enforcement action, and the costs incurred as a result of the landlords failure to comply with specified law, if the landlord or the successors in interest fail to strictly comply with the above-described provisions relating to security.This bill would make other nonsubstantive changes.
Existing law regulates the terms and conditions of residential tenancies, including limitations on the demanding or receiving of security, as defined, from a tenant and charging amounts against the tenant or the security. Existing law limits the landlords claim of the security to only those amounts as are reasonably necessary for specified purposes, including, but not limited to, the repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant, and the cleaning of the premises upon the termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy.
Existing law prohibits a landlord from asserting a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
This bill would limit claims against the tenant or the security for materials or supplies to the amount necessary to make reasonable replacements. The bill would limit claims against the tenant or the security for materials or supplies related to repairs to those necessary to restore the premises back to the same condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear. The bill would also prohibit a landlord from requiring a tenant to pay for, or asserting a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services.
Existing law requires the landlord to notify, within a reasonable time after notification of either partys intention to terminate the tenancy or before the end of the lease term, the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. Existing law sets forth procedures for requesting the inspection and requires the landlord to give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security, as specified.
This bill would, if an initial inspection is conducted, prohibit the landlord from using the security for deductions for repairs or cleanings that are not identified in the itemized statement.
Existing law requires, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than a specified time, the landlord to furnish the tenant an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and to return any remaining portion of the security to the tenant. Existing law requires the itemized statement to be accompanied by copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, including a copy of the bill, invoice, or receipt for materials or supplies deductions.
This bill would additionally require photographs justifying the cost of repairs or cleanings, as described, and would clarify that the landlord is required to include, along with and at the same time the itemized statement is sent, the specified copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises. The bill would prohibit the landlord from making a claim against the tenant or the security if the landlord fails to comply with these itemized statement requirements.
Existing law provides that the bad faith claim or retention by a landlord or their successors in interest of the security or any portion thereof in violation of the law may subject to the landlord or the successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages.
This bill would instead provide that the landlord or their successors in interest may be subject to statutory damages of up to 3 times the amount of the security, in addition to actual damages, the costs associated with filing an enforcement action, and the costs incurred as a result of the landlords failure to comply with specified law, if the landlord or the successors in interest fail to strictly comply with the above-described provisions relating to security.
This bill would make other nonsubstantive changes.
It is the intent of the Legislature, in enacting this measure, to ensure that landlords do not subsidize improvements to their rental properties with a former tenants security deposit.
SEC. 2.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (4), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)(A)Notwithstanding paragraph (1), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(5)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(2)(A)The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with this subdivision.
(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (h).
(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(k)(1)In the event of noncompliance with subdivision (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (i) or provides the tenant with an accounting as provided in subdivision (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (i), the successor in interest is not liable for damages as provided in subdivision (m), or any security not transferred pursuant to subdivision (i).
(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement of security in violation of subdivision (k), may subject the landlord or the landlords successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(n)A lease or rental agreement shall not contain a provision characterizing any security as nonrefundable.
(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(s)This section shall become operative on July 1, 2024.
SEC. 2.5.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (5), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)On or after April 1, 2025, if a landlord or its agent charges a service member who rents residential property in which the service member will reside a higher than standard or advertised security pursuant to paragraph (1) due to the credit history, credit score, housing history, or other factor related to the tenant, the landlord shall provide the tenant with a written statement, on or before the date the lease is signed, of the amount of the higher security and an explanation why the higher security amount is being charged. The additional amount of security shall be returned to the tenant after no more than six months of residency if the tenant is not in arrears for any rent due during that period. The date for return of the additional amount of security shall be included in the lease agreement. For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(5)(A)Notwithstanding paragraph (1), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this subparagraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(6)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(2)(A)The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with this subdivision.
(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (h).
(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(j)(1)In the event of noncompliance with subdivision (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (i) or provides the tenant with an accounting as provided in subdivision (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (i), the successor in interest is not liable for damages as provided in subdivision (m), or any security not transferred pursuant to subdivision (i).
(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement of security in violation of subdivision (k), may subject the landlord or the landlords successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(n)A lease or rental agreement shall not contain a provision characterizing any security as nonrefundable.
(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(s)This section shall become operative on July 1, 2024.
SEC. 3.Section 2.5 of this bill incorporates amendments to Section 1950.5 of the Civil Code proposed by both this bill and Senate Bill 611. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2025, (2) each bill amends Section 1950.5 of the Civil Code, and (3) this bill is enacted after Senate Bill 611, in which case Section 2 of this bill shall not become operative.
It is the intent of the Legislature, in enacting this measure, to ensure that landlords do not subsidize improvements to their rental properties with a former tenants security deposit.
SEC. 2.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (4), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)(A)Notwithstanding paragraph (1), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(5)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(2)(A)The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with this subdivision.
(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (h).
(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(k)(1)In the event of noncompliance with subdivision (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (i) or provides the tenant with an accounting as provided in subdivision (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (i), the successor in interest is not liable for damages as provided in subdivision (m), or any security not transferred pursuant to subdivision (i).
(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement of security in violation of subdivision (k), may subject the landlord or the landlords successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(n)A lease or rental agreement shall not contain a provision characterizing any security as nonrefundable.
(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(s)This section shall become operative on July 1, 2024.
SEC. 2.5.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (5), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)On or after April 1, 2025, if a landlord or its agent charges a service member who rents residential property in which the service member will reside a higher than standard or advertised security pursuant to paragraph (1) due to the credit history, credit score, housing history, or other factor related to the tenant, the landlord shall provide the tenant with a written statement, on or before the date the lease is signed, of the amount of the higher security and an explanation why the higher security amount is being charged. The additional amount of security shall be returned to the tenant after no more than six months of residency if the tenant is not in arrears for any rent due during that period. The date for return of the additional amount of security shall be included in the lease agreement. For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(5)(A)Notwithstanding paragraph (1), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this subparagraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(6)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(2)(A)The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with this subdivision.
(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (h).
(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(j)(1)In the event of noncompliance with subdivision (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (i) or provides the tenant with an accounting as provided in subdivision (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (i), the successor in interest is not liable for damages as provided in subdivision (m), or any security not transferred pursuant to subdivision (i).
(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement of security in violation of subdivision (k), may subject the landlord or the landlords successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(n)A lease or rental agreement shall not contain a provision characterizing any security as nonrefundable.
(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(s)This section shall become operative on July 1, 2024.
SEC. 3.Section 2.5 of this bill incorporates amendments to Section 1950.5 of the Civil Code proposed by both this bill and Senate Bill 611. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2025, (2) each bill amends Section 1950.5 of the Civil Code, and (3) this bill is enacted after Senate Bill 611, in which case Section 2 of this bill shall not become operative.
It is the intent of the Legislature, in enacting this measure, to ensure that landlords do not subsidize improvements to their rental properties with a former tenants security deposit.
SEC. 2.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (4), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)(A)Notwithstanding paragraph (1), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(5)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(2)(A)The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with this subdivision.
(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (h).
(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(k)(1)In the event of noncompliance with subdivision (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (i) or provides the tenant with an accounting as provided in subdivision (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (i), the successor in interest is not liable for damages as provided in subdivision (m), or any security not transferred pursuant to subdivision (i).
(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement of security in violation of subdivision (k), may subject the landlord or the landlords successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(n)A lease or rental agreement shall not contain a provision characterizing any security as nonrefundable.
(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(s)This section shall become operative on July 1, 2024.
SEC. 2.5.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (4), (5), a landlord may shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)On or after April 1, 2025, if a landlord or its agent charges a service member who rents residential property in which the service member will reside a higher than standard or advertised security pursuant to paragraph (1) due to the credit history, credit score, housing history, or other factor related to the tenant, the landlord shall provide the tenant with a written statement, on or before the date the lease is signed, of the amount of the higher security and an explanation why the higher security amount is being charged. The additional amount of security shall be returned to the tenant after no more than six months of residency if the tenant is not in arrears for any rent due during that period. The date for return of the additional amount of security shall be included in the lease agreement. For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(4)(5)(A)Notwithstanding paragraph (1), a landlord may shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this paragraph, subparagraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(5)(6)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(e)(2)(A)The landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b). The landlord may shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(4)(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(5)(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and termination of the tenancy or when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(g)(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)Along with the itemized statement, the landlord shall also include The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with this subdivision.
(h)(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (g). (h).
(i)(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (h). (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(j)(j)(1)In the event of noncompliance with subdivision (h), (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (g). (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (h), (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (h) (i) or provides the tenant with an accounting as provided in subdivision (g). (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (h), (i), the successor in interest is not liable for damages as provided in subdivision ( l ), (m), or any security not transferred pursuant to subdivision (h). (i).
(k)(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (h), (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(l)(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement of security in violation of subdivision (j), (k), may subject the landlord or the landlords successors in interest to statutory damages of up to twice the amount of the security, in addition to actual damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(m)(n)No A lease or rental agreement may shall not contain a provision characterizing any security as nonrefundable.
(n)(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(o)(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(p)(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(q)(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(r)(s)This section shall become operative on July 1, 2024.
SEC. 3.Section 2.5 of this bill incorporates amendments to Section 1950.5 of the Civil Code proposed by both this bill and Senate Bill 611. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2025, (2) each bill amends Section 1950.5 of the Civil Code, and (3) this bill is enacted after Senate Bill 611, in which case Section 2 of this bill shall not become operative.
It is the intent of the Legislature, in enacting this measure, to ensure that landlords do not subsidize improvements to their rental properties with a former tenants security deposit.
SEC. 2.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (4), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)(A)Notwithstanding paragraph (1), a landlord shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(5)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)(1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b).
(2)(A)The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies and for work performed by a contractor, the landlord, or the landlords employee shall be limited to the a reasonable amount necessary to make reasonable replacements. restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(C)Claims against the tenant or the security for materials or supplies related to repairs, as described in subdivision (b), shall be limited to those necessary to restore the premises back to the same condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.(D)(C)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services. services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision, subdivision and, at the time of inspection, the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and termination of the tenancy when possession of the unit is returned to the landlord or that was not identified during the initial inspection due to the presence of a tenants possessions.
(7)The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure.
(g)(1)For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit immediately before, or at the inception of, the tenancy.
(2)Beginning April 1, 2025, the landlord shall take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit pursuant to this section, and shall also take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
(g)(h)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)The landlord shall also include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)The landlord shall provide photographs justifying the cost of repairs or cleanings pursuant to this section and a written explanation of the cost. At minimum, the landlord shall include photographs of the relevant portions of the premises requiring repair or cleaning from the beginning of the tenancy, from immediately before the repair or cleaning, and from immediately after the termination of the tenancy.(D)If a deduction is made for repairs or cleanings allowed by this section, the landlord shall provide photographs taken pursuant to subdivision (g), along with a written explanation of the cost of the allowable repairs or cleanings, as described in subparagraphs (A) to (C), inclusive. The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if they fail the landlord, in bad faith, fails to comply with this subdivision.
(h)(i)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (g). (h).
(i)(j)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (h). (i).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(j)(k)(1)In the event of noncompliance with subdivision (h), (i), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (g). (h). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (h), (i), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (h) (i) or provides the tenant with an accounting as provided in subdivision (g). (h).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (h), (i), the successor in interest is not liable for damages as provided in subdivision (l), (m), or any security not transferred pursuant to subdivision (h). (i).
(k)(l)Upon receipt of any portion of the security under paragraph (1) of subdivision (h), (i), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(l)Failure to strictly comply with the provisions of this section(m)The bad faith claim or retention by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section section, or the bad faith demand of replacement of security in violation of subdivision (k), may subject the landlord or the landlords successors in interest to statutory damages of up to three times twice the amount of the security, in addition to actual damages, the costs associated with filing an action to enforce this section, and the costs incurred as a result of the landlords failure to comply with Section 1962. damages. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(m)(n)A lease or rental agreement shall not contain a provision characterizing any security as nonrefundable.
(n)(o)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(o)(p)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(p)(q)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(q)(r)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(r)(s)This section shall become operative on July 1, 2024.
It is the intent of the Legislature, in enacting this measure, to ensure that landlords do not subsidize improvements to their rental properties with a former tenants security deposit.
SEC. 2.Section 1950.5 of the Civil Code, as added by Section 2 of Chapter 733 of the Statutes of 2023, is amended to read:1950.5.(a)This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.
(b)As used in this section, security means any payment, fee, deposit, or charge, including, but not limited to, any payment, fee, deposit, or charge, except as provided in Section 1950.6, that is imposed at the beginning of the tenancy to be used to reimburse the landlord for costs associated with processing a new tenant or that is imposed as an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:
(1)The compensation of a landlord for a tenants default in the payment of rent.
(2)The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
(3)The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. The amendments to this paragraph enacted by the act adding this sentence shall apply only to tenancies for which the tenants right to occupy begins after January 1, 2003.
(4)To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
(c)(1)Except as provided in paragraph (2), (3), or (4), a landlord may shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to one months rent, in addition to any rent for the first month paid on or before initial occupancy.
(2)This subdivision does not prohibit an advance payment of not less than six months rent if the term of the lease is six months or longer.
(3)This subdivision does not preclude a landlord and a tenant from entering into a mutual agreement for the landlord, at the request of the tenant and for a specified fee or charge, to make structural, decorative, furnishing, or other similar alterations, if the alterations are other than cleaning or repairing for which the landlord may charge the previous tenant as provided by subdivision (e).
(4)(A)Notwithstanding paragraph (1), a landlord may shall not demand or receive security, however denominated, in an amount or value in excess of an amount equal to two months rent, in addition to any rent for the first month paid on or before initial occupancy if the landlord meets both of the following requirements:
(i)The landlord is a natural person or a limited liability company in which all members are natural persons.
(ii)The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
(B)Subparagraph (A) shall not apply if the prospective tenant is a service member. A landlord shall not refuse to enter into a rental agreement for residential property with a prospective tenant who is a service member because this subparagraph prohibits the landlord from demanding or receiving a greater amount of security than that which is established in paragraph (1). For purposes of this paragraph, service member has the same meaning as in Section 400 of the Military and Veterans Code.
(C)For purposes of this paragraph:
(i)Natural person includes any natural person who is a settlor or beneficiary of a family trust.
(ii)Family trust means a revocable living trust or irrevocable trust in which the settlors and beneficiaries of the trust are persons who are related to each other as sibling, spouse, domestic partner, child, parent, grandparent, or grandchild.
(5)This subdivision shall not apply to a security collected or demanded by the landlord before July 1, 2024.
(d)Any security shall be held by the landlord for the tenant who is party to the lease or agreement. The claim of a tenant to the security shall be prior to the claim of any creditor of the landlord.
(e)The (1)Subject to paragraph (2), the landlord may claim of the security only those amounts as are reasonably necessary for the purposes specified in subdivision (b). The
(2)(A)The landlord may shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.
(B)Claims against the tenant or the security for materials or supplies shall be limited to the amount necessary to make reasonable replacements.
(C)Claims against the tenant or the security for materials or supplies related to repairs, as described in subdivision (b), shall be limited to those necessary to restore the premises back to the same condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
(D)The landlord shall not require a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services.
(f)(1)Within a reasonable time after notification of either partys intention to terminate the tenancy, or before the end of the lease term, the landlord shall notify the tenant in writing of the tenants option to request an initial inspection and of the tenants right to be present at the inspection. The requirements of this subdivision do not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure. At a reasonable time, but no earlier than two weeks before the termination or the end of lease date, the landlord, or an agent of the landlord, shall, upon the request of the tenant, make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. The purpose of the initial inspection shall be to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. If a tenant chooses not to request an initial inspection, the duties of the landlord under this subdivision are discharged. If an inspection is requested, the parties shall attempt to schedule the inspection at a mutually acceptable date and time. The landlord shall give at least 48 hours prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. The tenant and landlord may agree to forgo the 48-hour prior written notice by both signing a written waiver. The landlord shall proceed with the inspection whether the tenant is present or not, unless the tenant previously withdrew their request for the inspection. Written notice by the landlord shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(2)Based on the inspection, the landlord shall give the tenant an itemized statement specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make pursuant to paragraphs (1) to (4), inclusive, of subdivision (b). This statement shall also include the texts of paragraphs (1) to (4), inclusive, of subdivision (b). The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.
(3)The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.
(4)Subject to paragraphs (5) and (6), if an initial inspection is conducted pursuant to this subdivision, the landlord shall not use the security for deductions for repairs or cleanings that are not identified in the itemized statement described in paragraph (2).
(4)(5)Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.
(5)(6)Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and termination of the tenancy or was not identified during the initial inspection due to the presence of a tenants possessions.
(g)(1)No later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy under Section 1946 or 1946.1, Section 1161 of the Code of Civil Procedure, or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord shall furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and tenant may mutually agree to have the landlord deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant. After either the landlord or the tenant provides notice to terminate the tenancy, the landlord and the tenant may also agree to have the landlord provide a copy of the itemized statement along with the copies required by paragraph (2) to an email account provided by the tenant.
(2)Along with the itemized statement, the The landlord shall also include include, along with and at the same time the itemized statement is sent, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
(A)If the landlord or landlords employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
(B)If the landlord or landlords employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
(C)If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.
(D)The landlord shall provide photographs justifying the cost of repairs or cleanings pursuant to this section and a written explanation of the cost. At minimum, the landlord shall include photographs of the relevant portions of the premises requiring repair or cleaning from the beginning of the tenancy, from immediately before the repair or cleaning, and from immediately after the termination of the tenancy.
(3)If a repair to be done by the landlord or the landlords employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlords possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlords possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements in paragraphs (1) and (2) in the manner specified.
(4)The landlord need not comply with paragraph (2) or (3) if either of the following applies:
(A)The deductions for repairs and cleaning together do not exceed one hundred twenty-five dollars ($125).
(B)The tenant waived the rights specified in paragraphs (2) and (3). The waiver shall only be effective if it is signed by the tenant at the same time or after a notice to terminate a tenancy under Section 1946 or 1946.1 has been given, a notice under Section 1161 of the Code of Civil Procedure has been given, or no earlier than 60 calendar days prior to the expiration of a fixed-term lease. The waiver shall substantially include the text of paragraph (2).
(5)Notwithstanding paragraph (4), the landlord shall comply with paragraphs (2) and (3) when a tenant makes a request for documentation within 14 calendar days after receiving the itemized statement specified in paragraph (1). The landlord shall comply within 14 calendar days after receiving the request from the tenant.
(6)Any mailings to the tenant pursuant to this subdivision shall be sent to the address provided by the tenant. If the tenant does not provide an address, mailings pursuant to this subdivision shall be sent to the unit that has been vacated.
(7)The landlord shall not be entitled to claim any amount of the security if they fail to comply with this subdivision.
(h)Upon termination of the landlords interest in the premises, whether by sale, assignment, death, appointment of receiver, or otherwise, the landlord or the landlords agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the security held:
(1)Transfer the portion of the security remaining after any lawful deductions made under subdivision (e) to the landlords successor in interest. The landlord shall thereafter notify the tenant by personal delivery or by first-class mail, postage prepaid, of the transfer, of any claims made against the security, of the amount of the security deposited, and of the names of the successors in interest, their addresses, and their telephone numbers. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign their name on the landlords copy of the notice.
(2)Return the portion of the security remaining after any lawful deductions made under subdivision (e) to the tenant, together with an accounting as provided in subdivision (g).
(i)Prior to the voluntary transfer of a landlords interest in the premises, the landlord shall deliver to the landlords successor in interest a written statement indicating the following:
(1)The security remaining after any lawful deductions are made.
(2)An itemization of any lawful deductions from any security received.
(3)Their election under paragraph (1) or (2) of subdivision (h).
This subdivision does not affect the validity of title to the real property transferred in violation of this subdivision.
(j)(1)In the event of noncompliance with subdivision (h), the landlords successors in interest shall be jointly and severally liable with the landlord for repayment of the security, or that portion thereof to which the tenant is entitled, when and as provided in subdivisions (e) and (g). A successor in interest of a landlord may not require the tenant to post any security to replace that amount not transferred to the tenant or successors in interest as provided in subdivision (h), unless and until the successor in interest first makes restitution of the initial security as provided in paragraph (2) of subdivision (h) or provides the tenant with an accounting as provided in subdivision (g).
(2)This subdivision does not preclude a successor in interest from recovering from the tenant compensatory damages that are in excess of the security received from the landlord previously paid by the tenant to the landlord.
(3)Notwithstanding this subdivision, if, upon inquiry and reasonable investigation, a landlords successor in interest has a good faith belief that the lawfully remaining security deposit is transferred to the successor in interest or returned to the tenant pursuant to subdivision (h), the successor in interest is not liable for damages as provided in subdivision ( l ), (l), or any security not transferred pursuant to subdivision (h).
(k)Upon receipt of any portion of the security under paragraph (1) of subdivision (h), the landlords successors in interest shall have all of the rights and obligations of a landlord holding the security with respect to the security.
(l)The bad faith claim or retention Failure to strictly comply with the provisions of this section by a landlord or the landlords successors in interest of the security or any portion thereof in violation of this section, or the bad faith demand of replacement security in violation of subdivision (j), section may subject the landlord or the landlords successors in interest to statutory damages of up to twice three times the amount of the security, in addition to actual damages. damages, the costs associated with filing an action to enforce this section, and the costs incurred as a result of the landlords failure to comply with Section 1962. The court may award damages for bad faith whenever the facts warrant that award, regardless of whether the injured party has specifically requested relief. In an action under this section, the landlord or the landlords successors in interest shall have the burden of proof as to the reasonableness of the amounts claimed or the authority pursuant to this section to demand additional security deposits.
(m)No A lease or rental agreement may shall not contain a provision characterizing any security as nonrefundable.
(n)An action under this section may be maintained in small claims court if the damages claimed, whether actual, statutory, or both, are within the jurisdictional amount allowed by Section 116.220 or 116.221 of the Code of Civil Procedure.
(o)Proof of the existence of and the amount of a security deposit may be established by any credible evidence, including, but not limited to, a canceled check, a receipt, a lease indicating the requirement of a deposit as well as the amount, prior consistent statements or actions of the landlord or tenant, or a statement under penalty of perjury that satisfies the credibility requirements set forth in Section 780 of the Evidence Code.
(p)The amendments to this section made during the 1985 portion of the 198586 Regular Session of the Legislature that are set forth in subdivision (e) are declaratory of existing law.
(q)The amendments to this section made during the 2003 portion of the 200304 Regular Session of the Legislature that are set forth in paragraph (1) of subdivision (f) are declaratory of existing law.
(r)This section shall become operative on July 1, 2024.
|
Date
|
Status
|
|---|---|
| Sep 19, 2024 | Chaptered by Secretary of State - Chapter 280, Statutes of 2024. |
| Sep 19, 2024 | Approved by the Governor. |
| Sep 9, 2024 | Enrolled and presented to the Governor at 3:30 p.m. |
| Aug 28, 2024 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 52. Noes 16.). |
| Aug 28, 2024 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 30 pursuant to Assembly Rule 77. |
| Aug 28, 2024 | Assembly Rule 77 suspended. |
| Aug 27, 2024 | Read third time. Passed. Ordered to the Assembly. (Ayes 25. Noes 10.). |
| Aug 26, 2024 | Read second time. Ordered to third reading. |
| Aug 23, 2024 | Read third time and amended. Ordered to second reading. |
| Jun 13, 2024 | Read second time. Ordered to third reading. |
| Jun 12, 2024 | From committee: Do pass. (Ayes 9. Noes 2.) (June 11). |
| May 22, 2024 | Referred to Com. on JUD. |
| May 13, 2024 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 13, 2024 | Read third time. Passed. Ordered to the Senate. (Ayes 54. Noes 14. Page 5188.) |
| May 2, 2024 | Read second time. Ordered to third reading. |
| May 1, 2024 | From committee: Do pass. (Ayes 9. Noes 3.) (April 30). |
| Apr 29, 2024 | Re-referred to Com. on JUD. |
| Apr 25, 2024 | From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. |
| Mar 4, 2024 | Referred to Com. on JUD. |
| Feb 16, 2024 | From printer. May be heard in committee March 17. |
| Feb 15, 2024 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 28, 2024 | AB 2801 Friedman Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 27, 2024 | Assembly 3rd Reading AB2801 Friedman By Wahab | Senate Floor |
Passed |
|
| Jun 11, 2024 | Do pass | Senate Standing Committee on Judiciary |
Passed |
|
| May 13, 2024 | AB 2801 Friedman Assembly Third Reading | Assembly Floor |
Passed |
|
| Apr 30, 2024 | Do pass. | Assembly Standing Committee on Judiciary |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Apartment Association Of Orange County | ** Against | |
| Bay Area Apartment Association | * Indeterminate | Apr 30, 2024 |
| Bay Area Regional Health Inequities Initiative | ** Support | |
| California Apartment Association | * Neutral | Apr 30, 2024 |
| California Association Of Realtors | ** Against | |
| California Democratic Party Renters Council | ** Support | |
| California Rural Legal Assistance Foundation | ** Support | |
| California State University Employees Union | ** Support | |
| City of West Hollywood | ** Support | |
| College Democrats At UC San Diego | ** Support | |
| Disability Rights California | * Support | Apr 30, 2024 |
| East Bay for Everyone | ** Support | |
| East Bay Rental Housing Association | ** Against | |
| GENup | ** Support | |
| Housing Now! CA | ** Support | |
| Long Beach Forward | ** Support | |
| Orange County Apartment Association | * Indeterminate | Apr 30, 2024 |
| Our Time to Act | ** Support | |
| Power CA Action | ** Support | |
| Public Advocates | ** Support | |
| Student Homes Coalition | ** Support | |
| Techequity Action | ** Support | |
| Telegraph for People | ** Support | |
| Tenants Together | ** Support | |
| The Childrens Partnership | ** Support | |
| UC San Diego Associated Students Office of Local Affairs | ** Support | |
| UC San Diego Housing Commission | ** Support | |
| UC Santa Barbara Campus Democrats | ** Support | |
| UCSC Student Housing Coalition | ** Support | |
| University Housing Rights Organization | * Support | Apr 30, 2024 |
| University Of California Student Association | ** Support | |
| western center on law and poverty | ** Support | |
| Young Invincibles | ** Support | |
| Youthbridge Housing | ** Support |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2801
Author:(Friedman)
As Amended Ver:August 23, 2024
Majority vote
SUMMARY
Strengthens security deposit law by adopting certain guardrails.
- Establishes that a landlord may claim against the security deposit only the amounts that are reasonably necessary, as provided.
- Establishes that claims against the tenant or the security deposit for work performed by a contractor, the landlord, or the landlord's employee must be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
- Establishes that claims against the tenant or the security deposit for material or supplies must be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
- Prohibits a landlord from requiring a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
- Replaces the term "may not" with "shall not" in the provisions related to security deposit limits.
- Establishes that if an initial inspection is conducted, as provided, and at the time of the inspection the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord is prohibited from using the security for items unidentified in the itemized statement based on the initial inspection, as required.
- Provides that a landlord may still use the security deposit for allowable deductions, as provided, that occur between completion of the initial inspection and when possession of the unit returned to the landlord.
- Provides that a landlord may still use the security deposit for allowable deductions, as provided, not identified during the initial inspection due to the presence of the tenant's possessions.
- Establishes that the initial inspection requirements, as provided, do not apply when a tenancy is terminated because the tenant is guilty of unlawful detainer, as provided.
- Establishes that for tenancies that begin on or after July 1, 2025, the landlord is required to take photographs of the unit immediately before or at the inception of the tenancy.
- Establishes that beginning on April 1, 2025, the landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit, as permitted.
- Establishes that beginning on April 1, 2025, the landlord must take photographs of the unit within a reasonable time after any repairs or cleanings for which the landlord is making a deduction or claim against the security deposit are completed.
- Establishes that if a deduction is made for repairs or cleanings, as permitted, the landlord must provide photographs, as provided, along with a written explanation of the cost of the allowable repairs or cleanings.
- Provides that the landlord may provide the photographs required in 13) to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
- Establishes that a landlord is not entitled to claim any amount of the security, if in bad faith, they fail to comply with the requirements regarding return of the security deposit.
- Makes chaptering amendments to resolve conflicts with SB 611.
Senate Amendments
Make chaptering amendments to resolve conflicts with SB 611.
COMMENTS
Renting in California. Almost 17 million people rent their homes in California, amounting to 44% of the state's population. (California Budget and Policy Center, California's 17 Million Renters Face Housing Instability and Inequity Before and After COVID-19 (Jan. 2021).) Many of these renters are cost-burdened. As of 2020, over 52% of renter households paid more than 30% of their total income in rent, and 27% were severely cost-burdened, paying more than 50% of their income in rent. (California Housing Partnership, California Affordable Housing Needs Report 2021 (March 2021).) Black households are nearly 50% more likely to be severely cost-burdened than white households. (Ibid.)
Existing law provides tenants with certain rights regarding the return of their security deposit at the end of their lease. Civil Code Section 1950.5(e)-(g) outlines the process and requirements for landlords to return the security deposit to tenants.
Initial inspection process. A tenant may request an "initial inspection" before they move out of their rental. The initial inspection process aims to document the conditions prior to the tenant vacating the premises, and in order to know ahead of time what repairs, if any, are necessary. During the "initial inspection" the landlord or the landlord's agent identifies defects or conditions that might justify deductions from the screening deposit. The tenant has the right to be present during the inspection. Based on the findings of that inspection, the landlord or agent must prepare an itemized statement of repairs or cleaning that the landlord or agent believes the tenant should perform in order to avoid deductions from the tenant's security deposit. The landlord cannot, for example, use the security deposit to repair damages or correct defects in the rental that existed before the tenant moved in, or that are the result of ordinary wear and tear. After the initial inspection, the tenant may make the repairs or do the cleaning described in the itemized statement as allowed by the rental agreement, to avoid deductions from the deposit.
Final inspection process. The landlord may perform a final inspection after the tenant has moved out of the rental. The landlord may make a deduction from the tenant's security deposit to repair damages to the unit, exclusive of ordinary wear and tear, or perform cleaning necessary to return the unit to the same level of cleanliness it was in at the beginning of the tenancy, in the following instances:
- Where the damage/condition was identified in the itemized statement and the tenant did not repair or correct; or
- Where the damage/condition occurred after the initial inspection; or
- The damage/condition was not identified during the initial inspection process due to the presence of the tenant's possessions.
Landlord's obligations at end of tenancy. Within 21 days after the tenant vacates the property, the landlord must return the full security deposit to the tenant. Or, if the landlord has deducted from the deposit, within the same 21-day period, they must return any remaining amount along with written notice of their withholding. This notice must include an itemized statement explaining the deductions, along with receipts or invoices for any repairs or cleaning expenses, including any labor and materials.
This bill strengthens landlord-tenant law regarding security deposits and the inspection process in two keys ways.
- Permissible charges. Amends existing law, which allows for claims for materials and supplies limited to "an amount necessary to make reasonable replacements" by requiring that claims for materials, supplies, and labor be limited to "a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear." This change is intended to prevent landlords from subsidizing improvements to their rental unit with their prior tenant's security deposit. The measure also prohibits the inclusion of professional carpet cleaning and other professional carpet cleaning service, which has become more commonplace in many leases, unless "reasonably necessary to return the premises to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear."
- Photograph requirement. This measure requires landlords in all leases beginning on or after July 1, 2025 to also take photographs immediately before or at the inception of the tenancy. And starting April 1, 2025, all landlords will be required to take photographs of the unit after the tenant moves out, but before repairs or cleanings, which the landlord intends to deduct from the security deposit, are performed. The landlord is then required to take photographs of the unit after the repairs/cleaning are completed. If the landlord does intend to deduct for damages/cleaning, they must provide photographs to the tenant in addition to the itemized statement. This photograph requirement is meant to minimize disputes over charges, and provide documentary evidence in the event a dispute over deductions does arise.
According to the Author
For many renters, especially those from lower income backgrounds, affording a security deposit entails a great deal of sacrifice. By creating a burden of evidence on the part of the landlord we are giving tenants, especially our most vulnerable, another tool in the toolbox to protect themselves against egregious claims of their hard earned money.
Arguments in Support
East Bay for Everyone supports this measure:
According to the Federal Reserve's Survey of Consumer Finances, the bottom quartile of American households (most of whom are renters) had a median net worth of under $3,500 in 2022. As such, just one month's security deposit can be a major factor for millions of households' financial stability, but landlords often use and spend these funds in unaccountable ways. [This bill] would put more guardrails around landlords' use of funds, to ensure landlords do not use them for normal wear and tear or property improvements, and would increase potential civil damages for violating. Renters have far less negotiating power than landlords as only one side at the table has their shelter at stake, which is a kind of market failure: therefore regulation is needed to make the contractual relationship fair and even.
UC San Diego Housing Commission also writes in support:
[This bill] will address the concerns of student renters while also preserving the landlord's right to repair any damages caused by the tenant with the security deposit. Existing law limits the landlord's claim of a security deposit to only those amounts as are reasonably necessary for the repair of damages to the premises, exclusive of ordinary wear and tear, to return the unit to the same level of cleanliness it was in at the inception of the tenancy. Under the current system, however, landlords are able to overcharge tenants to subsidize upgrades to the unit after the termination of the tenancy. Bad-faith retentions like this reduce the accessibility of housing, as many renters depend on the return of their security deposit to cover the costs associated with moving to another unit.
By requiring any deductions from the security deposit to be justified with photo evidence and preventing landlords from making additional claims on a deposit after a valid initial inspection is conducted, [this bill] will help protect the security deposits of tenants and close existing loopholes that allow landlords to violate the intention of the law.
Arguments in Opposition
A coalition of regional apartment associations, including the East Bay Rental Housing Association, oppose the introduced version of the bill:
AB 2801 proposes to limit the use of a security deposit to material and supplies necessary to make reasonable replacement or repairs and prohibits the use of professional cleaning services, including carpet cleaning. AB 2801 also leaves a gap of time between a pre-move out inspection and when tenants fully vacates the dwelling that exposes property owners or their agents to liability for damage caused by tenants and prohibiting recovery from tenants.
AB 2801 is an attempt to redefine the definition of a "security deposit" by severely limiting the ways in which a property owner may provide a clean and sanitary unit to a subsequent tenant following damage caused by a former tenant without violating California State Habitability Laws.
FISCAL COMMENTS
None.
VOTES:
ASM JUDICIARY: 9-3-0
YES: Kalra, Bauer-Kahan, Bryan, Connolly, Haney, Maienschein, McKinnor, Pacheco, Reyes
NO: Dixon, Essayli, Sanchez
ASSEMBLY FLOOR: 54-14-12
YES: Addis, Aguiar-Curry, Alvarez, Arambula, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Rendon, Reyes, Luz Rivas, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Villapudua, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
NO: Bains, Chen, Davies, Dixon, Essayli, Flora, Vince Fong, Gallagher, Hoover, Lackey, Jim Patterson, Joe Patterson, Sanchez, Ta
ABS, ABST OR NV: Alanis, Bauer-Kahan, Megan Dahle, Grayson, Mathis, Petrie-Norris, Quirk-Silva, Ramos, Rodriguez, Valencia, Waldron, Wallis
SENATE FLOOR: 25-10-5
YES: Allen, Ashby, Atkins, Becker, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Padilla, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener
NO: Alvarado-Gil, Dahle, Grove, Jones, Min, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk
ABS, ABST OR NV: Archuleta, Blakespear, Glazer, Newman, Portantino
UPDATED
VERSION: August 23, 2024
CONSULTANT: Shiran Zohar / JUD. / (916) 319-2334 FN: 0004616
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 2801 |
THIRD READING
Bill No: AB 2801
Author: Friedman (D)
Amended: 8/23/24 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE: 9-2, 6/11/24
AYES: Umberg, Allen, Ashby, Caballero, Durazo, Laird, Roth, Stern, Wahab
NOES: Wilk, Niello
ASSEMBLY FLOOR: 54-14, 5/13/24 - See last page for vote
SUBJECT: Tenancy: security deposits
SOURCE: GenUp
Power CA Action
Student Homes Coalition
DIGEST:
This bill prohibits a landlord of residential property from deducting from a tenant’s security deposit costs for materials or supplies, the work of a contractor, or for professional carpet cleaning services, unless they are reasonably necessary to restore the premises to their condition before the tenancy, less ordinary wear and tear, and requires landlords to take photographs of the premises, as specified.
Senate Floor Amendments of 8/23/24 incorporate additional changes to Civil Code Section 1950.5, the code section amended by this bill, made by SB 611 (Menjivar, 2024), to be operative only if this bill and SB 611 are enacted, and this bill is enacted last.
ANALYSIS:
Existing law:
- Defines “security” for the rental of residential property as a payment, fee, deposit, or charge, to be used for any purpose by the landlord, including but not limited to:
- Processing a new tenant;
- Ensuring advance payment of rent;
- Compensating for nonpayment of rent;
- Repairing damages to the property, other than ordinary wear and tear, caused by the tenant or the tenant’s guest or licensee;
- For tenancies beginning on or after January 1, 2003, cleaning the property upon termination of the tenancy in order to restore the same level of cleanliness the property had at the beginning of the tenancy; or
- Cover any obligation, as established by the rental agreement, to restore, replace, or return personal property or accessories, other than due to ordinary wear and tear. (Civ. Code § 1950.5 (b).)
- Excludes from the definition of “security” any permissible application screening fee that a landlord charges a prospective tenant. (Civ. Code § 1950.6.)
- Starting July 1, 2024, limits the amount of a security deposit a landlord can collect for a residential tenancy to no more than one month's rent, regardless of whether the property is furnished or unfurnished. (Civ. Code § 1950.5 (c)(1).)
- Establishes that, notwithstanding (3), above, small landlords who meet the following requirements may demand or receive a security deposit of up to two months’ rent:
- the landlord is a natural person or a limited liability company in which all members are natural persons; and
- the landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent. (Civ. Code § 1950.5 (c)(4)(A).)
- Clarifies that notwithstanding (4), above, service members, as defined, may not be required to pay more than one month’s rent in security deposit. (Civ. Code § 1950.5 (c)(4)(B).)
- Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or pay rent that lawfully accrued within the last 12 months, the tenant does neither. Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or comply with a material obligation under the lease other than the payment of rent, the tenant does neither. (Code of Civ. Procedure § 1161.)
- Specifies that a tenant who maintains, commits, or permits the maintenance or commission of a nuisance on rental property thereby terminates the lease and may on that basis be subject to an unlawful detainer action seeking a court order for the eviction of the tenant if the tenant does not vacate within three days of receiving notice from the landlord about the nuisance. (Code of Civ. Procedure § 1161(4).)
- Permits a landlord to claim only that portion of the security deposit reasonably necessary for the purposes set forth in 1) above. Prohibits a landlord from asserting a claim against the tenant or the security for damages or defective conditions that preexisted the tenancy, ordinary wear and tear, or the cumulative effects of wear and tear. (Civ. Code § 1950.5 (e).)
- Provides that, within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord must notify the tenant in writing of the tenant’s option to request an initial inspection where the tenant may be present. (Civ. Code § 1950.5 (f)(1).)
- Establishes that, at a reasonable time, but no earlier than two weeks before the termination or the end of lease date, upon the request of the tenant, the landlord or their agent must make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. Establishes that the purpose of the initial inspection is to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. Provides that the landlord’s obligation to conduct an initial inspection is triggered only upon the tenant’s request. (Ibid.)
- Provides that if an inspection is requested, the parties must attempt to schedule the inspection at a mutually acceptable date and time. The landlord must give at least 48 hours’ prior written notice of the date and time of the inspection if either: a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. Permits the tenant and landlord to agree to forgo the 48-hour prior written notice by both signing a written waiver. (Ibid.)
- Establishes that a landlord must provide the tenant with an itemized statement, based on the inspection, specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make, as permitted. Provides that the landlord must give the statement in 17) to the tenant at the inspection, if the tenant is present, or must be left inside the unit, and that the statement must include the text of Civil Code Section 1950.5(b)(1)-(4). (Civ. Code § 1950.5 (f)(2).)
- Provides that, during the period following the initial inspection until termination of the tenancy, the tenant has the opportunity to remedy identified deficiencies in order to avoid deductions from the security. (Civ. Code § 1950.5 (f)(3).)
- Permits a landlord to use the security deposit for itemized deductions that were not cured by the tenant, as provided. (Civ. Code § 1950.5 (f)(4).)
- Permits a landlord to use the security for any permitted purposes, as provided, that occurs between completion of the initial inspection and termination of the tenancy, or that was not identified during the initial inspection due to the presence of a tenant’s possessions on the premises. (Civ. Code § 1950.5 (f)(5).)
- Establishes that, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord must furnish the tenant, by personal delivery or by pre-paid first-class mail, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and must return any remaining portion of the security to the tenant. (Civ. Code § 1950.5 (g)(1).)
- Exempts from this requirement deductions for repairs and cleaning that together do not exceed $125, or when the tenant waives the right to the above provision, as specified. (Civ. Code § 1950.5(g)(4).)
- If the tenant requests documentation within 14 calendar days of receiving the itemized statement, the landlord must provide the required documentation within 14 calendar days of the request from the tenant. (Civ. Code § 1950.5(g)(5).)
- Requires the landlord to provide to the tenant, along with the itemized statement, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
- If the landlord or landlord’s employee did the work, the itemized statement must reasonably describe the work performed. The itemized statement must include the time spent and the reasonable hourly rate charged;
- If the landlord or landlord’s employee did not do the work, the landlord must provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement must provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information;
- If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit. (Civ. Code § 1950.5 (g)(2).)
- Specifies that a tenant may receive statutory damages of up to twice the amount of the security deposit, in addition to actual damages, if the landlord retains or claims the tenant’s deposit or any portion thereof in bad faith violation of Civil Code Section 1950.5. Provides that, in any action under Section 1950.5, the landlord has the burden of proof as to the reasonableness or lawfulness of the amounts claimed. (Civ. Code § 1950.5(l).
- Specifies that an action under Civil Code Section 1950.5 may be brought in small claims court, if the damages claimed are within the jurisdictional amount allowed for small claims court cases. (Civ. Code § 1950.5(n).)
This bill:
- States that it is the intent of the Legislature to ensure that landlords do not subsidize improvements to their rental properties with a former tenant’s security deposit.
- Specifies that claims by the landlord against a tenant or the deposit for materials or supplies, and for work performed by a contractor, must be limited to a reasonable amount necessary to restore the premises back to the condition it was in before the tenancy, except for ordinary wear and tear.
- Prohibits a landlord from requiring a tenant to pay for, or from deducting from the deposit, the costs for professional carpet cleaning or other professional cleaning services, unless those services are reasonably necessary to return the premises to the condition it was in before the tenancy, except for ordinary wear and tear.
- Specifies that, if an initial inspection is conducted and the premises did not contain tenant possessions that prevented the identification of repairs or cleaning, a landlord may not deduct from the security deposit costs for repairs or cleaning that are not identified in the itemized statement the landlord provided to the tenant.
- Requires that, for tenancies beginning on or after July 1, 2025, a landlord must take photographs of the leased unit immediately before, or at the inception of the tenancy.
- Requires that, beginning April 1, 2025, a landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but before any repairs or cleanings for which the landlord will deduct from the deposit are completed, and that the landlord take photographs of the unit within a reasonable time after the repairs or cleanings are completed.
- Requires that the landlord include the photographs required by (5) and (6), above, along with a written explanation of the cost of the allowable repairs and cleanings as required, if deductions from the security deposit are made for allowable repairs or cleanings. Specifies that the landlord may provide the photographs by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
- Specifies that a landlord is not entitled to claim any amount of the security deposit if the landlord fails to comply, in bad faith, with the requirement that they provide a tenant with an itemized statement, documentation of the charges incurred and deducted from the deposit, and the photographs and explanation as required in (7), above.
- Includes double-jointing amendments to avoid chaptering out issues with SB 611 (Menjivar, 2024), which also amends Civil Code Section 1950.5.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 8/23/24)
GenUp (co-source)
Power CA Action (co-source)
Student Homes Coalition (co-source)
Bay Area Regional Health Inequities Initiative
California Democratic Party Renters Council
California Rural Legal Assistance Foundation
California State University Employees Union
City of West Hollywood
College Democrats at UC San Diego
East Bay for Everyone
Housing Now! CA
Long Beach Forward
Our Time to Act
Public Advocates
Techequity Action
Telegraph for People
Tenants Together
The Children’s Partnership
UC San Diego Associated Students Office of Local Affairs
UC San Diego Housing Commission
UC Santa Barbara Campus Democrats
UCSC Student Housing Coalition
University of California Student Association
Western Center on Law and Poverty
Young Invincibles
Youthbridge Housing
OPPOSITION: (Verified 8/23/24)
Apartment Association of Orange County
California Association of Realtors
East Bay Rental Housing Association
ARGUMENTS IN SUPPORT: According to the Student Homes Coalition:
The members of the Student HOMES Coalitions believe that every student has the right to accessible and affordable housing. With the majority of California’s higher education institutions failing to guarantee undergraduate housing, the majority of students will have to rent while in college. Faced with limited options due to lack of available housing near college campuses, students often have to enter into any available lease. Landlords take advantage of the challenges facing student renters by refusing to return security deposits or manipulating the application process to shut out student renters all together. As first-time tenants often lack resources to contest unfair leasing practices, student renters are unlikely to get relief through the small claims court process.
AB2801 will address the concerns of student renters while also preserving the landlord's right to repair any damages caused by the tenant with the security deposit. Existing law limits the landlord’s claim of a security deposit to only those amounts as are reasonably necessary for the repair of damages to the premises, exclusive of ordinary wear and tear, to return the unit to the same level of cleanliness it was in at the inception of the tenancy. Under the current system, however, landlords are able to overcharge tenants to subsidize upgrades to the unit after the termination of the tenancy. Bad-faith retentions like this reduce the accessibility of housing, as many renters depend on the return of their security deposit to cover the costs associated with moving to another unit.
By requiring any deductions from the security deposit to be justified with photo evidence and preventing landlords from making additional claims on a deposit after a valid initial inspection is conducted, AB 2801 will help protect the security deposits of tenants and close existing loopholes that allow landlords to violate the intention of the law.
ARGUMENTS IN OPPOSITION: According to the California Association of Realtors, which is opposed to this bill:
AB 2801, among other things, establishes that claims against the tenant or the security deposit for work performed by a contractor, the housing provider, or the housing provider’s employee must be limited to a “reasonable” amount necessary to restore the premises back to the condition it was in at the inception of the tenancy. It isn’t clear what “reasonable” means in this context, and C.A.R. is concerned that this lack of clarity could lead to confusion in the marketplace and, in turn, increased litigation.
Does a reasonable amount for a repair mean that a small housing provider has to use an unscrupulous repair person with 1 star on Yelp because they only charge $75 for that repair, or can a small housing provider pay $150 to a respected repair person with 4 stars on Yelp to ensure that the repair is done properly? An urgent repair in Anaheim that has to be performed on Labor Day Weekend is going to cost a different amount than the same repair performed in Yreka on a random Tuesday in October – is that reasonable or unreasonable under the bill?
ASSEMBLY FLOOR: 54-14, 5/13/24
AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Rendon, Reyes, Luz Rivas, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Villapudua, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
NOES: Bains, Chen, Davies, Dixon, Essayli, Flora, Vince Fong, Gallagher, Hoover, Lackey, Jim Patterson, Joe Patterson, Sanchez, Ta
NO VOTE RECORDED: Alanis, Bauer-Kahan, Megan Dahle, Grayson, Mathis, Petrie-Norris, Quirk-Silva, Ramos, Rodriguez, Valencia, Waldron, Wallis
Prepared by: Ian Dougherty / JUD. / (916) 651-4113
8/25/24 13:35:46
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 2801 |
THIRD READING
Bill No: AB 2801
Author: Friedman (D)
Amended: 4/25/24 in Assembly
Vote: 21
SENATE JUDICIARY COMMITTEE: 9-2, 6/11/24
AYES: Umberg, Allen, Ashby, Caballero, Durazo, Laird, Roth, Stern, Wahab
NOES: Wilk, Niello
ASSEMBLY FLOOR: 54-14, 5/13/24 - See last page for vote
SUBJECT: Tenancy: security deposits
SOURCE: Generation Up
Student Homes Coalition
University of California Student Association
DIGEST:
This bill prohibits a landlord of residential property from deducting from a tenant’s security deposit costs for materials or supplies, the work of a contractor, or for professional carpet cleaning services, unless they are reasonably necessary to restore the premises to their condition before the tenancy, less ordinary wear and tear, and requires landlords to take photographs of the premises, as specified.
ANALYSIS:
Existing law:
- Defines “security” for the rental of residential property as a payment, fee, deposit, or charge, to be used for any purpose by the landlord, including but not limited to:
- Processing a new tenant;
- Ensuring advance payment of rent;
- Compensating for nonpayment of rent;
- Repairing damages to the property, other than ordinary wear and tear, caused by the tenant or the tenant’s guest or licensee;
- For tenancies beginning on or after January 1, 2003, cleaning the property upon termination of the tenancy in order to restore the same level of cleanliness the property had at the beginning of the tenancy; or
- Cover any obligation, as established by the rental agreement, to restore, replace, or return personal property or accessories, other than due to ordinary wear and tear. (Civil Code (Civ. Code) § 1950.5 (b))
- Excludes from the definition of “security” any permissible application screening fee that a landlord charges a prospective tenant. (Civ. Code § 1950.6)
- Starting July 1, 2024, limits the amount of a security deposit a landlord can collect for a residential tenancy to no more than one month's rent, regardless of whether the property is furnished or unfurnished. (Civ. Code § 1950.5 (c)(1))
- Establishes that, notwithstanding (3), above, small landlords who meet the following requirements may demand or receive a security deposit of up to two months’ rent:
- the landlord is a natural person or a limited liability company in which all members are natural persons; and
- the landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent. (Civ. Code § 1950.5 (c)(4)(A))
- Clarifies that notwithstanding (4), above, service members, as defined, may not be required to pay more than one month’s rent in security deposit. (Civ. Code § 1950.5 (c)(4)(B))
- Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or pay rent that lawfully accrued within the last 12 months, the tenant does neither. Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or comply with a material obligation under the lease other than the payment of rent, the tenant does neither. (Civ. Code § 1161)
- Specifies that a tenant who maintains, commits, or permits the maintenance or commission of a nuisance on rental property thereby terminates the lease and may on that basis be subject to an unlawful detainer action seeking a court order for the eviction of the tenant if the tenant does not vacate within three days of receiving notice from the landlord about the nuisance. (Civ. Code § 1161(4))
- Permits a landlord to claim only that portion of the security deposit reasonably necessary for the purposes set forth in 1) above. Prohibits a landlord from asserting a claim against the tenant or the security for damages or defective conditions that preexisted the tenancy, ordinary wear and tear, or the cumulative effects of wear and tear. (Civ. Code § 1950.5 (e))
- Provides that, within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord must notify the tenant in writing of the tenant’s option to request an initial inspection where the tenant may be present. (Civ. Code § 1950.5 (f)(1))
- Establishes that, at a reasonable time, but no earlier than two weeks before the termination or the end of lease date, upon the request of the tenant, the landlord or their agent must make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. Establishes that the purpose of the initial inspection is to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. Provides that the landlord’s obligation to conduct an initial inspection is triggered only upon the tenant’s request. (Ibid.)
- Provides that if an inspection is requested, the parties must attempt to schedule the inspection at a mutually acceptable date and time. The landlord must give at least 48 hours’ prior written notice of the date and time of the inspection if either: a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. Permits the tenant and landlord to agree to forgo the 48-hour prior written notice by both signing a written waiver. (Ibid.)
- Establishes that a landlord must provide the tenant with an itemized statement, based on the inspection, specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make, as permitted. Provides that the landlord must give the statement in 17) to the tenant at the inspection, if the tenant is present, or must be left inside the unit, and that the statement must include the text of Civil Code Section 1950.5(b)(1)-(4). (Civ. Code § 1950.5 (f)(2))
- Provides that, during the period following the initial inspection until termination of the tenancy, the tenant has the opportunity to remedy identified deficiencies in order to avoid deductions from the security. (Civ. Code § 1950.5 (f)(3))
- Permits a landlord to use the security deposit for itemized deductions that were not cured by the tenant, as provided. (Civ. Code § 1950.5 (f)(4))
- Permits a landlord to use the security for any permitted purposes, as provided, that occurs between completion of the initial inspection and termination of the tenancy, or that was not identified during the initial inspection due to the presence of a tenant’s possessions on the premises. (Civ. Code § 1950.5 (f)(5))
- Establishes that, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord must furnish the tenant, by personal delivery or by pre-paid first-class mail, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and must return any remaining portion of the security to the tenant. (Civ. Code § 1950.5 (g)(1))
- Exempts from this requirement deductions for repairs and cleaning that together do not exceed $125, or when the tenant waives the right to the above provision, as specified. (Civ. Code § 1950.5(g)(4))
- If the tenant requests documentation within 14 calendar days of receiving the itemized statement, the landlord must provide the required documentation within 14 calendar days of the request from the tenant. (Civ. Code § 1950.5(g)(5))
- Requires the landlord to provide to the tenant, along with the itemized statement, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
- If the landlord or landlord’s employee did the work, the itemized statement must reasonably describe the work performed. The itemized statement must include the time spent and the reasonable hourly rate charged;
- If the landlord or landlord’s employee did not do the work, the landlord must provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement must provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information;
- If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit. (Civ. Code § 1950.5 (g)(2))
- Specifies that a tenant may receive statutory damages of up to twice the amount of the security deposit, in addition to actual damages, if the landlord retains or claims the tenant’s deposit or any portion thereof in bad faith violation of Civil Code Section 1950.5. Provides that, in any action under Section 1950.5, the landlord has the burden of proof as to the reasonableness or lawfulness of the amounts claimed. (Civ. Code § 1950.5(l))
- Specifies that an action under Civil Code Section 1950.5 may be brought in small claims court, if the damages claimed are within the jurisdictional amount allowed for small claims court cases. (Civ. Code § 1950.5(n))
This bill:
- States that it is the intent of the Legislature to ensure that landlords do not subsidize improvements to their rental properties with a former tenant’s security deposit.
- Specifies that claims by the landlord against a tenant or the deposit for materials or supplies, and for work performed by a contractor, must be limited to a reasonable amount necessary to restore the premises back to the condition it was in before the tenancy, except for ordinary wear and tear.
- Prohibits a landlord from requiring a tenant to pay for, or from deducting from the deposit, the costs for professional carpet cleaning or other professional cleaning services, unless those services are reasonably necessary to return the premises to the condition it was in before the tenancy, except for ordinary wear and tear.
- Specifies that, if an initial inspection is conducted and the premises did not contain tenant possessions that prevented the identification of repairs or cleaning, a landlord may not deduct from the security deposit costs for repairs or cleaning that are not identified in the itemized statement the landlord provided to the tenant.
- Requires that, for tenancies beginning on or after July 1, 2025, a landlord must take photographs of the leased unit immediately before, or at the inception of the tenancy.
- Requires that, beginning April 1, 2025, a landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but before any repairs or cleanings for which the landlord will deduct from the deposit are completed, and that the landlord take photographs of the unit within a reasonable time after the repairs or cleanings are completed.
- Requires that the landlord include the photographs required by (5) and (6), above, along with a written explanation of the cost of the allowable repairs and cleanings as required, if deductions from the security deposit are made for allowable repairs or cleanings. Specifies that the landlord may provide the photographs by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
- Specifies that a landlord is not entitled to claim any amount of the security deposit if the landlord fails to comply, in bad faith, with the requirement that they provide a tenant with an itemized statement, documentation of the charges incurred and deducted from the deposit, and the photographs and explanation as required in (7), above.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 6/13/24)
Generation Up dba GENup (co-source)
Student Homes Coalition (co-source)
University of California Student Association (co-source)
California Rural Legal Assistance Foundation
California State University Employees Union
City of West Hollywood
Our Time to Act
Power CA Action
Public Advocates
Tenants Together
UC San Diego Housing Commission
UC San Diego Associated Students Office of Local Affairs
UC Santa Barbara Campus Democrats
UCSC Student Housing Coalition
Western Center on Law and Poverty
Young Invincibles
Youthbridge Housing
OPPOSITION: (Verified 6/13/24)
California Association of Realtors
ARGUMENTS IN SUPPORT:
According to the Student Homes Coalition, which is a co-sponsor of this bill:
The members of the Student HOMES Coalitions believe that every student has the right to accessible and affordable housing. With the majority of California’s higher education institutions failing to guarantee undergraduate housing, the majority of students will have to rent while in college. Faced with limited options due to lack of available housing near college campuses, students often have to enter into any available lease. Landlords take advantage of the challenges facing student renters by refusing to return security deposits or manipulating the application process to shut out student renters all together. As first-time tenants often lack resources to contest unfair leasing practices, student renters are unlikely to get relief through the small claims court process.
AB2801 will address the concerns of student renters while also preserving the landlord's right to repair any damages caused by the tenant with the security deposit. Existing law limits the landlord’s claim of a security deposit to only those amounts as are reasonably necessary for the repair of damages to the premises, exclusive of ordinary wear and tear, to return the unit to the same level of cleanliness it was in at the inception of the tenancy. Under the current system, however, landlords are able to overcharge tenants to subsidize upgrades to the unit after the termination of the tenancy. Bad-faith retentions like this reduce the accessibility of housing, as many renters depend on the return of their security deposit to cover the costs associated with moving to another unit.
By requiring any deductions from the security deposit to be justified with photo evidence and preventing landlords from making additional claims on a deposit after a valid initial inspection is conducted, AB 2801 will help protect the security deposits of tenants and close existing loopholes that allow landlords to violate the intention of the law.
ARGUMENTS IN OPPOSITION:
According to the California Association of Realtors:
AB 2801, among other things, establishes that claims against the tenant or the security deposit for work performed by a contractor, the housing provider, or the housing provider’s employee must be limited to a “reasonable” amount necessary to restore the premises back to the condition it was in at the inception of the tenancy. It isn’t clear what “reasonable” means in this context, and C.A.R. is concerned that this lack of clarity could lead to confusion in the marketplace and, in turn, increased litigation.
Does a reasonable amount for a repair mean that a small housing provider has to use an unscrupulous repair person with 1 star on Yelp because they only charge $75 for that repair, or can a small housing provider pay $150 to a respected repair person with 4 stars on Yelp to ensure that the repair is done properly? An urgent repair in Anaheim that has to be performed on Labor Day Weekend is going to cost a different amount than the same repair performed in Yreka on a random Tuesday in October – is that reasonable or unreasonable under the bill?
ASSEMBLY FLOOR: 54-14, 5/13/24
AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Rendon, Reyes, Luz Rivas, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Villapudua, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
NOES: Bains, Chen, Davies, Dixon, Essayli, Flora, Vince Fong, Gallagher, Hoover, Lackey, Jim Patterson, Joe Patterson, Sanchez, Ta
NO VOTE RECORDED: Alanis, Bauer-Kahan, Megan Dahle, Grayson, Mathis, Petrie-Norris, Quirk-Silva, Ramos, Rodriguez, Valencia, Waldron, Wallis
Prepared by: Ian Dougherty / JUD. / (916) 651-4113
6/13/24 15:13:30
**** END ****
Senator Thomas Umberg, Chair
2023-2024 Regular Session
Bill No: AB 2801 (Author:Friedman)
Version: April 25, 2024
Hearing Date: June 11, 2024
Fiscal: No
Urgency: No
Consultant: ID
SUBJECT
Tenancy: security deposits
DIGEST
This bill prohibits a landlord of residential property from deducting from a tenant’s security deposit costs for materials or supplies, the work of a contractor, or for professional carpet cleaning services, unless they are reasonably necessary to restore the premises to their condition before the tenancy, less ordinary wear and tear, and requires landlords to take photographs of the premises, as specified.
EXECUTIVE SUMMARY
Rent and renting housing in California is incredibly expensive. In addition to rent, landlords often require tenants to provide an amount of money as security for the unit before they can move in. Under California law, landlords may only require specified amounts for deposits, and landlords must return the deposit at the end of the tenancy, less any specified, allowable deductions. Deposits pose significant burdens on prospective tenants, and the unlawful withholding of a tenant’s deposit after the tenancy has ended threatens many tenant’s savings. In order to limit landlords’ wrongful and excessive withholding of a tenant’s deposit, AB 2801 clarifies the laws regarding allowable charges by a landlord, prohibiting the landlord from deducting from a tenant’s security deposit costs for materials or supplies, the work of a contractor, or for professional carpet cleaning services, unless they are reasonably necessary to restore the premises to their condition before the tenancy, less ordinary wear and tear. AB 2801 also requires landlords to document the condition of the leased premises by taking photographs of the premises before the tenancy and before and after any repairs or cleanings at the end of the tenancy, and that the landlord provide the photographs to the tenant. AB 2801 is sponsored by Student Homes Coalition, Power California Action, and the University of California Students Association, and is supported by various Democratic and pro-housing groups and labor unions. It is opposed by the California Association of Realtors.
PROPOSED CHANGES TO THE LAW
Existing law:
- Defines “security” for the rental of residential property as a payment, fee, deposit, or charge, to be used for any purpose by the landlord, including but not limited to:
- Processing a new tenant;
- Ensuring advance payment of rent;
- Compensating for nonpayment of rent;
- Repairing damages to the property, other than ordinary wear and tear, caused by the tenant or the tenant’s guest or licensee;
- For tenancies beginning on or after January 1, 2003, cleaning the property upon termination of the tenancy in order to restore the same level of cleanliness the property had at the beginning of the tenancy; or
- Cover any obligation, as established by the rental agreement, to restore, replace, or return personal property or accessories, other than due to ordinary wear and tear. (Civ. Code § 1950.5 (b).)
- Excludes from the definition of “security” any permissible application screening fee that a landlord charges a prospective tenant. (Civ. Code § 1950.6.)
- Starting July 1, 2024, limits the amount of a security deposit a landlord can collect for a residential tenancy to no more than one month's rent, regardless of whether the property is furnished or unfurnished. (Civ. Code § 1950.5 (c)(1).)
- Establishes that, notwithstanding (3), above, small landlords who meet the following requirements may demand or receive a security deposit of up to two months’ rent:
- the landlord is a natural person or a limited liability company in which all members are natural persons; and
- the landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent. (Civ. Code § 1950.5 (c)(4)(A).)
- Clarifies that notwithstanding (4), above, service members, as defined, may not be required to pay more than one month’s rent in security deposit. (Civ. Code § 1950.5 (c)(4)(B).)
- Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or pay rent that lawfully accrued within the last 12 months, the tenant does neither. Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or comply with a material obligation under the lease other than the payment of rent, the tenant does neither. (Code of Civ. Procedure § 1161.)
- Specifies that a tenant who maintains, commits, or permits the maintenance or commission of a nuisance on rental property thereby terminates the lease and may on that basis be subject to an unlawful detainer action seeking a court order for the eviction of the tenant if the tenant does not vacate within three days of receiving notice from the landlord about the nuisance. (Code of Civ. Procedure § 1161(4).)
- Permits a landlord to claim only that portion of the security deposit reasonably necessary for the purposes set forth in 1) above. Prohibits a landlord from asserting a claim against the tenant or the security for damages or defective conditions that preexisted the tenancy, ordinary wear and tear, or the cumulative effects of wear and tear. (Civ. Code § 1950.5 (e).)
- Provides that, within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord must notify the tenant in writing of the tenant’s option to request an initial inspection where the tenant may be present. (Civ. Code § 1950.5 (f)(1).)
- Establishes that, at a reasonable time, but no earlier than two weeks before the termination or the end of lease date, upon the request of the tenant, the landlord or their agent must make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. Establishes that the purpose of the initial inspection is to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. Provides that the landlord’s obligation to conduct an initial inspection is triggered only upon the tenant’s request. (Ibid.)
- Provides that if an inspection is requested, the parties must attempt to schedule the inspection at a mutually acceptable date and time. The landlord must give at least 48 hours’ prior written notice of the date and time of the inspection if either: a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. Permits the tenant and landlord to agree to forgo the 48-hour prior written notice by both signing a written waiver. (Ibid.)
- Establishes that a landlord must provide the tenant with an itemized statement, based on the inspection, specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make, as permitted. Provides that the landlord must give the statement in 17) to the tenant at the inspection, if the tenant is present, or must be left inside the unit, and that the statement must include the text of Civil Code Section 1950.5(b)(1)-(4). (Civ. Code § 1950.5 (f)(2).)
- Provides that, during the period following the initial inspection until termination of the tenancy, the tenant has the opportunity to remedy identified deficiencies in order to avoid deductions from the security. (Civ. Code § 1950.5 (f)(3).)
- Permits a landlord to use the security deposit for itemized deductions that were not cured by the tenant, as provided. (Civ. Code § 1950.5 (f)(4).)
- Permits a landlord to use the security for any permitted purposes, as provided, that occurs between completion of the initial inspection and termination of the tenancy, or that was not identified during the initial inspection due to the presence of a tenant’s possessions on the premises. (Civ. Code § 1950.5 (f)(5).)
- Establishes that, no later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord must furnish the tenant, by personal delivery or by pre-paid first-class mail, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and must return any remaining portion of the security to the tenant. (Civ. Code § 1950.5 (g)(1).)
- Exempts from this requirement deductions for repairs and cleaning that together do not exceed $125, or when the tenant waives the right to the above provision, as specified. (Civ. Code § 1950.5(g)(4).)
- If the tenant requests documentation within 14 calendar days of receiving the itemized statement, the landlord must provide the required documentation within 14 calendar days of the request from the tenant. (Civ. Code § 1950.5(g)(5).)
- Requires the landlord to provide to the tenant, along with the itemized statement, copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
- If the landlord or landlord’s employee did the work, the itemized statement must reasonably describe the work performed. The itemized statement must include the time spent and the reasonable hourly rate charged;
- If the landlord or landlord’s employee did not do the work, the landlord must provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement must provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information;
- If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit. (Civ. Code § 1950.5 (g)(2).)
- Specifies that a tenant may receive statutory damages of up to twice the amount of the security deposit, in addition to actual damages, if the landlord retains or claims the tenant’s deposit or any portion thereof in bad faith violation of Civil Code Section 1950.5. Provides that, in any action under Section 1950.5, the landlord has the burden of proof as to the reasonableness or lawfulness of the amounts claimed. (Civ. Code § 1950.5(l).
- Specifies that an action under Civil Code Section 1950.5 may be brought in small claims court, if the damages claimed are within the jurisdictional amount allowed for small claims court cases. (Civ. Code § 1950.5(n).)
This bill:
- States that it is the intent of the Legislature to ensure that landlords do not subsidize improvements to their rental properties with a former tenant’s security deposit.
- Specifies that claims by the landlord against a tenant or the deposit for materials or supplies, and for work performed by a contractor, must be limited to a reasonable amount necessary to restore the premises back to the condition it was in before the tenancy, except for ordinary wear and tear.
- Prohibits a landlord from requiring a tenant to pay for, or from deducting from the deposit, the costs for professional carpet cleaning or other professional cleaning services, unless those services are reasonably necessary to return the premises to the condition it was in before the tenancy, except for ordinary wear and tear.
- Specifies that, if an initial inspection is conducted and the premises did not contain tenant possessions that prevented the identification of repairs or cleaning, a landlord may not deduct from the security deposit costs for repairs or cleaning that are not identified in the itemized statement the landlord provided to the tenant.
- Requires that, for tenancies beginning on or after July 1, 2025, a landlord must take photographs of the leased unit immediately before, or at the inception of the tenancy.
- Requires that, beginning April 1, 2025, a landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but before any repairs or cleanings for which the landlord will deduct from the deposit are completed, and that the landlord take photographs of the unit within a reasonable time after the repairs or cleanings are completed.
- Requires that the landlord include the photographs required by (5) and (6), above, along with a written explanation of the cost of the allowable repairs and cleanings as required, if deductions from the security deposit are made for allowable repairs or cleanings. Specifies that the landlord may provide the photographs by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
- Specifies that a landlord is not entitled to claim any amount of the security deposit if the landlord fails to comply, in bad faith, with the requirement that they provide a tenant with an itemized statement, documentation of the charges incurred and deducted from the deposit, and the photographs and explanation as required in (7), above.
COMMENTS
- Author’s statement
According to the author:
As the Attorney General pointed out in a recent settlement with a predatory landlord, ‘For many renters, especially those from lower income backgrounds, affording a security deposit entails a great deal of sacrifice.’ By creating a burden of evidence on the part of the landlord we are giving tenants, especially our most vulnerable, another tool in the toolbox to protect themselves against egregious claims of their hard earned money.
- The state of renting in California
Almost 17 million Californians rent their apartments or homes, accounting for about 44 percent of all individuals in the state.[1] Yet at the same time, California is experiencing record high prices for homes and rent. In the past decade, median rents in the state have increased dramatically. In 2022, the median gross rent in the state was $1,870, which represented about an eight percent increase per year from the median gross rent in 2019.[2] As a result for these high rents, significant numbers of California renters pay a disproportionate amount of their income toward rent and struggle to make ends meet. In 2019, 51.8 percent of California renters were cost-burdened, in which their rent costs exceeded 30 percent of their household income, and 27.3 percent were severely cost-burdened, in which their rent costs exceeded 50 percent of their household income.[3] Moreover, 78 percent of extremely low-income households are severely cost burdened, meaning that they spend more than half of their income on housing costs, and 52 percent of low-income households are severely cost burdened.[4] Data and multiple studies also have demonstrated a strong link between homelessness and the cost of housing, suggesting that California’s increases in residential rental rates contributes directly to the state’s growing population of individuals experiencing homelessness.[5] The state’s high rents significantly affects people of color, who disproportionately account for the state’s renters.[6]
- Current landlord-tenant laws
The financial strain of the high cost of renting in California is made worse by the fact that most rentals require a substantial security deposit in order to begin the tenancy. Security deposits are typically paid to ensure that the landlord will be covered in the case that the tenant fails to pay rent or causes significant damage to the property, and are required to be paid up front before the tenancy may start. In theory, the tenant will receive their deposit back at the end of the tenancy, less any costs for which the deposit was held as security. For lower income renters, this security deposit may be a major barrier to accessing housing or moving between rental units, as a renter needs to save up a month’s rent just to be able to enter into the rental agreement.
Recognizing the importance of housing and the significant financial impact that the high costs of housing have on Californians, the state has enacted a variety of laws to protect the state’s renters and their security deposits. In 2023, the Legislature enacted AB 12, which will prohibit most landlords from charging a deposit of greater than one month’s rent, starting July 1, 2024. (AB 12 (Haney), Ch. 733, Stats. 2023). In addition, existing law limits what landlords can deduct from a tenant’s security deposit at the end of the tenancy. Landlords may only deduct from a tenant’s deposit costs related to: the compensation of a landlord for a tenant’s default in the payment of rent; the repair of damages to the property, except for ordinary wear and tear, caused by the tenant or their guest; the cleaning of the premises upon termination of the tenancy necessary to return the unit to the same cleanliness it was in at the beginning of the tenancy and to remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property. (Civ. Code § 1950(b).) The landlord may only deduct from the deposit only those amounts reasonably necessary for those purposes, and may not deduct or claim any amount of the deposit to cover damages to the property that existed prior to the beginning of the tenancy or to cover ordinary wear and tear. (Civ. Code § 1950(e).)
In addition to these limitations on what a landlord may deduct from a tenant’s deposit, the law outlines a process by which the tenant can be made aware of any repairs or costs that may be needed before the lease ends. The landlord must notify the tenant that they may request an “initial inspection” prior to their vacating the unit to document the condition of the unit and potential repairs needed or deductions from the tenant’s deposit, and the tenant may request this inspection in writing. (Civ. Code § 1950.5(f).) This inspection must take place no earlier than two weeks before the end of the lease, and provides the tenant the opportunity to fix any deficiencies or damage to the unit before the lease ends in order to avoid deductions from their deposit. The landlord must give the tenant an itemized statement of the repairs and cleanings that the landlord intends to make and deduct from the deposit, and the tenant is allowed to try to remedy the deficiencies before the end of the tenancy. The landlord may still deduct from the tenant’s deposit the costs of any deficiency identified in the inspection that was not remedied by the tenant, or the costs of deficiencies that either arose between the initial inspection and the end of the lease or that were not discovered during the inspection because of the presence of the tenant’s possessions. (Id.) Exempt from this initial inspection requirements are circumstances in which the tenancy is terminated through an unlawful detainer action in court.
Within 21 calendar days of the tenant vacating the unit, the landlord must return the full deposit, or provide the tenant with a detailed, itemized statement describing the original reason for the deposit, the deposit amount received, and how much the landlord is returning. (Civ. Code § 1950.5(g).) Along with the statement, the landlord must include copies of documents showing the charges incurred and deducted from the deposit to clean or repair the unit, including a copy of any bill, invoice, or receipt for materials or supplies. (Id.) The law includes an exception to this documentation requirement for deductions for repairs and cleaning that together are not more than $125. However, if the tenant requests documentation to support the itemized statement within 14 days of receiving the statement, the landlord must provide the documentation within 14 days. (Id.)
- AB 2801 addresses landlords who try to keep more of a tenant’s deposit than they are entitled to
The author asserts that AB 2801 is necessary to prevent landlords from unfairly withholding tenant’s security deposits. They point out that a security deposit required just to begin a tenancy is the tenant’s hard-earned money, and that being able to cover the security deposit often entails significant sacrifice and saving. The author states that their office has received reports of landlords over-charging former tenants for expenses that go beyond what is reasonably necessary to repair damage to the premises or return it to the condition in which it was before the tenancy. The reports include charges for repairing damage or defective conditions that existed before the tenant moved into the unit, or that resulted from ordinary wear and tear. These charges included charges for materials to improve the unit, essentially using the tenant’s deposit to subsidize renovations of the unit, even when the defective fixture was defective before the tenant moved into the unit. The author also cites to reports or landlords charging pre-set cleaning fees, regardless of whether cleaning is necessary or whether the tenant sufficiently cleaned the premises themselves.
The author points to a recent settlement that the California Attorney General reached against a corporate landlord that manages properties in Los Angeles and Orange County for illegally withholding deposits from former tenants.[7] The basis of that case alleged that the company had automatically deducted pre-set cleaning charges. The settlement was actually predated by a 2001 settlement between the same company and the Attorney General, in a case in which the company had been accused of charging former tenants for ordinary wear and tear and unreasonable clean-up and repair costs, and of withholding tenants’ entire deposits regardless of the condition of the unit.[8]
- AB 2801 proposes to strengthen protections for tenants regarding residential security deposits
- AB 2801 limits charges for materials or supplies, or work performed by a contractor
AB 2801 revises the rules relating to a tenant’s deposit and what the landlord can deduct in two significant ways. First, it specifies that any deductions against a deposit for materials, supplies, or work performed by a contractor to restore the premises must be limited to a reasonable amount necessary to restore the premises back to the condition it was before the tenancy began, except for ordinary wear and tear. It also prohibits the landlord from requiring the tenant to pay for, or have deducted from the security deposit, the costs for professional carpet cleaning or other professional cleaning services, unless the cleaning services are reasonably necessary to return the premises to the condition it was in before the tenancy began, except for ordinary wear and tear. Under current law, it is already the case that a landlord may only claim from the deposit amounts that are reasonably necessary for the allowed purposes, and may not deduct costs for damage that occurred to the premises before the tenancy or for ordinary wear and tear.
These requirements arguably already apply to materials and supplies and to professional cleaning costs; however, current law does not specifically address such charges. AB 2801 would specify that these requirements apply to materials and supplies, work performed by a contractor, and professional cleaning, including carpet cleaning. Furthermore, it would specify that the charges related to materials or supplies, or work performed by a contractor, must be limited to an amount reasonably necessary to restore the premises back to the condition in which it was before the tenancy, except for normal wear and tear. That requirement could be read to mean that, if such materials or supplies or contracted work is necessary, the landlord can only charge the tenant the portion of those materials or supplies or work that would return the premises to the condition was in before the tenancy. The landlord would not be able to charge an amount for more than that, such as for more materials than necessary or for work done both to restore and improve the premises.
- AB 2801 revises the initial inspection process
AB 2801 also makes clarifying changes to the initial inspection process. It specifies that a landlord may not deduct charges from the deposit not identified in the itemized statement, unless: the damage necessitating the repair or cleaning occurs after the initial inspection and before possession is returned to the landlord; or the tenant’s possessions were in the unit at the time of the inspection and prevented the landlord from identifying repairs or cleanings. While current law specifies these two circumstances as allowable deductions, it does not specify that no other deductions for repairs or cleanings not identified in the initial inspection are allowed. Thus, AB 2801 clarifies that a landlord may only make deductions from a deposit or otherwise charge the tenant for repairs or cleanings that are identified in the initial inspection, that are necessary due to damage that occurs after the initial inspection, or that were not identified during the initial inspection because of the presence of the tenant’s possessions in the unit. AB 2801 does not change the current rule that the initial inspection process does not apply to tenancies terminated through an unlawful detainer proceeding or when a tenant does not request an initial inspection.
- AB 2891 requires a landlord to document the premises’ condition with photographs
Perhaps most significantly, AB 2801 includes additional documentation requirements requiring the landlord to photograph the premises at multiple stages and provide these photographs to the tenant. For tenancies beginning on or after July 1, 2025, it requires the landlord to take photographs of the unit immediately before, or at the inception of the tenancy. AB 2801 also requires, beginning April 1, 2025, that the landlord take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to making any repairs or cleanings that will be deducted from the tenant’s deposit. Lastly, the landlord must take photographs of the unit within a reasonable time after the repairs and cleanings are completed. Thus, AB 2801 requires photographs be taken by the landlord to document the condition of the unit at three separate times: before the tenant moves in; after the tenant moves out; and after the landlord has completed any repairs or cleanings necessary and for which they will be deducting charges from the deposit.
AB 2801 requires that the landlord provide these photographs to the tenant as part of the itemized statement and documents the landlord is currently required to provide the tenant within 21 calendar days of the tenant vacating the premises. The photographs must be provided along with a written explanation of the cost of the specified allowable repairs or cleaning, and can be provided by mail, email, computer flash drive, or by an online link.
- AB 2801 prohibits landlords from deducting from a tenant’s deposit if they fail, in bad faith, to provide an itemized statement and documentation of the deductions
Lastly, AB 2801 prohibits a landlord from keeping any part of the deposit if the landlord fails to comply with the requirements that they provide the tenant an itemized statement, documents showing the charges, and the photographs and written explanation within the 21-day deadline, if the failure was a result of bad faith. This provision requires that a landlord comply with the documentation requirements for any deductions from the deposit, or forfeit their ability to claim any amount of the security deposit. However, it does not require strict adherence; just a good faith attempt to comply. Thus, if a landlord believes they are complying with the requirements in good faith, they may still be able to withhold or deduct from the deposit for allowable charges relating to repairs or cleaning.
- AB would be enforced through the courts
If a landlord violates the provisions of Civil Code Section 1950.5, including the provisions amended or created by this bill, the tenant may pursue a claim against the landlord through small claims court or through a civil cause of action in court. (Civ. Code §§ 1950.5(l), (n).) A tenant may obtain statutory damages up to twice the amount of the security deposit, as well as actual damages, for a bad faith violation of AB 2801’s provisions. (Civ. Code § 1950.5(l).) However, if a landlord violates the provisions of Civil Code Section 1950.5 in good faith, a tenant may still pursue an action against the landlord, but the landlord may offset their damages by any amounts which they could have properly deducted from the tenant’s deposit originally.[9]
- Arguments in support
According to the Student Homes Coalition, which is a co-sponsor of AB 2801:
The members of the Student HOMES Coalitions believe that every student has the right to accessible and affordable housing. With the majority of California’s higher education institutions failing to guarantee undergraduate housing, the majority of students will have to rent while in college. Faced with limited options due to lack of available housing near college campuses, students often have to enter into any available lease. Landlords take advantage of the challenges facing student renters by refusing to return security deposits or manipulating the application process to shut out student renters all together. As first-time tenants often lack resources to contest unfair leasing practices, student renters are unlikely to get relief through the small claims court process.
AB2801 will address the concerns of student renters while also preserving the landlord's right to repair any damages caused by the tenant with the security deposit. Existing law limits the landlord’s claim of a security deposit to only those amounts as are reasonably necessary for the repair of damages to the premises, exclusive of ordinary wear and tear, to return the unit to the same level of cleanliness it was in at the inception of the tenancy. Under the current system, however, landlords are able to overcharge tenants to subsidize upgrades to the unit after the termination of the tenancy. Bad-faith retentions like this reduce the accessibility of housing, as many renters depend on the return of their security deposit to cover the costs associated with moving to another unit.
By requiring any deductions from the security deposit to be justified with photo evidence and preventing landlords from making additional claims on a deposit after a valid initial inspection is conducted, AB 2801 will help protect the security deposits of tenants and close existing loopholes that allow landlords to violate the intention of the law.
- Arguments in opposition
According to the California Association of Realtors, which is opposed to AB 2801:
AB 2801, among other things, establishes that claims against the tenant or the security deposit for work performed by a contractor, the housing provider, or the housing provider’s employee must be limited to a “reasonable” amount necessary to restore the premises back to the condition it was in at the inception of the tenancy. It isn’t clear what “reasonable” means in this context, and C.A.R. is concerned that this lack of clarity could lead to confusion in the marketplace and, in turn, increased litigation.
Does a reasonable amount for a repair mean that a small housing provider has to use an unscrupulous repair person with 1 star on Yelp because they only charge $75 for that repair, or can a small housing provider pay $150 to a respected repair person with 4 stars on Yelp to ensure that the repair is done properly? An urgent repair in Anaheim that has to be performed on Labor Day Weekend is going to cost a different amount than the same repair performed in Yreka on a random Tuesday in October – is that reasonable or unreasonable under the bill?
SUPPORT
Genup (Generation Up) (co-sponsor)
Student Homes Coalition (sponsor)
University of California Student Association (co-sponsor)
California Rural Legal Assistance Foundation
California State University Employees Union
Our Time to Act
Power California Action
Public Advocates
Tenants Together
UC San Diego Housing Commission
UC San Diego Associated Students Office of Local Affairs
UC Santa Barbara Campus Democrats
UCSC Student Housing Coalition
Youthbridge Housing
OPPOSITION
California Association of Realtors
RELATED LEGISLATION
Pending Legislation:
AB 2785 (Wilson, 2024) would require a landlord to deposit a tenant’s security deposit into a bank account or other financial institution, that this account shall only contain deposit funds, and that, if the account is interest-bearing, the interest be paid to the tenant. AB 2785 is currently on the inactive file on the floor of the Assembly.
AB 2216 (Haney, 2024) would prohibit a landlord from inquiring about whether a prospective tenant plans to own or have a pet in the unit, prohibit a landlord from preventing a tenant from owning or keeping a pet in the unit without reasonable justification, prohibit a landlord from imposing payment of a separate or additional rent for the pet, and would specify that a landlord could deduct from a tenant’s deposit repair damages, or other related costs, caused by the tenant’s pet. AB 2216 is currently in the Senate Rules Committee.
AB 611 (Menjivar, 2023) would, among other things, amend a prohibition on landlords requiring security deposits or more than one month’s rent from a service member, requiring the landlord to specify the rental agreement that a higher deposit is being required because of the tenant’s poor credit score, and requiring that the additional amount of deposit be returned after six months if the tenant does not owe rent or the higher amount is not because of the tenant’s prior history of residential property damage. SB 611 is currently in the Assembly Judiciary Committee.
Prior Legislation:
AB 12 (Haney, Ch. 733, Stats. 2023) limited allowable security deposits that a landlord may charge a residential tenant to the amount equal to one month of rent, with exceptions.
AB 2297 (Wicks, 2022) would have required a landlord who offers a tenant the option of paying a fee in lieu of the security deposit to take certain action, including offering the tenant the option of paying a deposit, and would allow a tenant paying a fee in lieu of a deposit to stop paying the fee and pay a deposit at any time. AB 2297 died in the Assembly Judiciary Committee.
AB 3260 (Wicks, 2020) would have required a landlord of residential property to authorize a tenant, in place of paying the full amount of a security deposit, to satisfy security through obtaining and maintaining rental security insurance coverage, by obtaining a surety bond, or paying the security in monthly installments. AB 3260 died on the Assembly Third Reading file.
SB 644 (Glazer, Ch. 602, Stats. 2019) prohibits a landlord from demanding or receiving security from a service member who rents residential property in excess of one month’s rent, or in excess of two month’s rent if the unit is furnished.
PRIOR VOTES:
Assembly Floor (Ayes 54, Noes 14)
Assembly Judiciary Committee (Ayes 9, Noes 3)
**************
Monica Davalos et al, California’s 17 Million Renters Face Housing Instability and Inequity Before and After COVID-19, California Budget & Policy Center (Jan. 2021), available at https://calbudgetcenter.org/resources/renters-face-housing-instability-and-inequity-before-and-after-covid-19/. ↑
U.S. Census Bureau, Table: Median Gross Rent by Bedroom, American Community Survey (multiple years) (accessed May 29, 2024), available at https://data.census.gov/. ↑
Davalos supra note 1, p. 3. ↑
California Housing Partnership, “Housing Needs Dashboard,” Mar. 2024, available at https://chpc.net/housingneeds/. ↑
Margot Kushel et al, “California Statewide Study of People Experiencing Homelessness, UCSF Benioff Homelessness and Housing Initiative (Jun. 2023), available at https://homelessness.ucsf.edu/our-impact/studies/california-statewide-study-people-experiencing-homelessness; Alex Horowitz et al, “How housing costs drive levels of homelessness: data from metro areas highlights strong connection,” The APew Charitable Trusts (ug. 22, 2023), available at https://www.pewtrusts.org/en/research-and-analysis/articles/2023/08/22/how-housing-costs-drive-levels-of-homelessness. ↑
Davalos supra note 1, p. 6. ↑
Office of the Attorney General, “California Attorney General Rob Bonta Announces Settlement with Arnel Management Company over Illegal Withholding of Security Deposits,” California Department of Justice (Mar. 29, 2024), available at https://oag.ca.gov/news/press-releases/california-attorney-general-rob-bonta-announces-settlement-arnel-management. ↑
Office of the Attorney General, “Attorney General Lockyer Files Legal Action Against Arnel Management Company to Provide Refunds to Renters in Orange County,” California Department of Justice (Sept. 28, 2001), available at https://oag.ca.gov/news/press-releases/attorney-general-lockyer-files-legal-action-against-arnel-management-company. ↑
250 L.L.C. v. PhotoPoint Corp., (2005) 131 Cal. App. 4th 702, 727. ↑
ASSEMBLY THIRD READING
ATR Bill Id:AB 2801
Author:(Friedman)
As Amended Ver:April 25, 2024
Majority vote
SUMMARY
Strengthens security deposit law by adopting certain guardrails.
Major Provisions
- Establishes that a landlord may claim against the security deposit only the amounts that are reasonably necessary, as provided.
- Establishes that claims against the tenant or the security deposit for work performed by a contractor, the landlord, or the landlord's employee must be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
- Establishes that claims against the tenant or the security deposit for material or supplies must be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
- Prohibits a landlord from requiring a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
- Replaces the term "may not" with "shall not" in the provisions related to security deposit limits.
- Establishes that if an initial inspection is conducted, as provided, and at the time of the inspection the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord is prohibited from using the security for items unidentified in the itemized statement based on the initial inspection, as required.
- Provides that a landlord may still use the security deposit for allowable deductions, as provided, that occur between completion of the initial inspection and when possession of the unit returned to the landlord.
- Provides that a landlord may still use the security deposit for allowable deductions, as provided, not identified during the initial inspection due to the presence of the tenant's possessions.
- Establishes that the initial inspection requirements, as provided, do not apply when a tenancy is terminated because the tenant is guilty of unlawful detainer, as provided.
- Establishes that for tenancies that begin on or after July 1, 2025, the landlord is required to take photographs of the unit immediately before or at the inception of the tenancy.
- Establishes that beginning on April 1, 2025, the landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit, as permitted.
- Establishes that beginning on April 1, 2025, the landlord must take photographs of the unit within a reasonable time after any repairs or cleanings for which the landlord is making a deduction or claim against the security deposit are completed.
- Establishes that if a deduction is made for repairs or cleanings, as permitted, the landlord must provide photographs, as provided, along with a written explanation of the cost of the allowable repairs or cleanings.
- Provides that the landlord may provide the photographs required in 13) to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
- Establishes that a landlord is not entitled to claim any amount of the security, if in bad faith, they fail to comply with the requirements regarding return of the security deposit.
COMMENTS
Renting in California. Almost 17 million people rent their homes in California, amounting to 44% of the state's population. (California Budget and Policy Center, California's 17 Million Renters Face Housing Instability and Inequity Before and After COVID-19 (Jan. 2021).) Many of these renters are cost-burdened. As of 2020, over 52% of renter households paid more than 30% of their total income in rent, and 27% were severely cost-burdened, paying more than 50% of their income in rent. (California Housing Partnership, California Affordable Housing Needs Report 2021 (March 2021).) Black households are nearly 50% more likely to be severely cost-burdened than white households. (Ibid.)
Existing law provides tenants with certain rights regarding the return of their security deposit at the end of their lease. Civil Code Section 1950.5(e)-(g) outlines the process and requirements for landlords to return the security deposit to tenants.
Initial inspection process. A tenant may request an "initial inspection" before they move out of their rental. The initial inspection process aims to document the conditions prior to the tenant vacating the premises, and in order to know ahead of time what repairs, if any, are necessary. During the "initial inspection" the landlord or the landlord's agent identifies defects or conditions that might justify deductions from the screening deposit. The tenant has the right to be present during the inspection. Based on the findings of that inspection, the landlord or agent must prepare an itemized statement of repairs or cleaning that the landlord or agent believes the tenant should perform in order to avoid deductions from the tenant's security deposit. The landlord cannot, for example, use the security deposit to repair damages or correct defects in the rental that existed before the tenant moved in, or that are the result of ordinary wear and tear. After the initial inspection, the tenant may make the repairs or do the cleaning described in the itemized statement as allowed by the rental agreement, to avoid deductions from the deposit.
Final inspection process. The landlord may perform a final inspection after the tenant has moved out of the rental. The landlord may make a deduction from the tenant's security deposit to repair damages to the unit, exclusive of ordinary wear and tear, or perform cleaning necessary to return the unit to the same level of cleanliness it was in at the beginning of the tenancy, in the following instances:
- Where the damage/condition was identified in the itemized statement and the tenant did not repair or correct; or
- Where the damage/condition occurred after the initial inspection; or
- The damage/condition was not identified during the initial inspection process due to the presence of the tenant's possessions.
Landlord's obligations at end of tenancy. Within 21 days after the tenant vacates the property, the landlord must return the full security deposit to the tenant. Or, if the landlord has deducted from the deposit, within the same 21-day period, they must return any remaining amount along with written notice of their withholding. This notice must include an itemized statement explaining the deductions, along with receipts or invoices for any repairs or cleaning expenses, including any labor and materials.
This bill strengthens landlord-tenant law regarding security deposits and the inspection process in two keys ways.
- Permissible charges. Amends existing law, which allows for claims for materials and supplies limited to "an amount necessary to make reasonable replacements" by requiring that claims for materials, supplies, and labor be limited to "a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear." This change is intended to prevent landlords from subsidizing improvements to their rental unit with their prior tenant's security deposit. The measure also prohibits the inclusion of professional carpet cleaning and other professional carpet cleaning service, which has become more commonplace in many leases, unless "reasonably necessary to return the premises to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear."
- Photograph requirement. This measure requires landlords in all leases beginning on or after July 1, 2025 to also take photographs immediately before or at the inception of the tenancy. And starting April 1, 2025, all landlords will be required to take photographs of the unit after the tenant moves out, but before repairs or cleanings, which the landlord intends to deduct from the security deposit, are performed. The landlord is then required to take photographs of the unit after the repairs/cleaning are completed. If the landlord does intend to deduct for damages/cleaning, they must provide photographs to the tenant in addition to the itemized statement. This photograph requirement is meant to minimize disputes over charges, and provide documentary evidence in the event a dispute over deductions does arise.
According to the Author
For many renters, especially those from lower income backgrounds, affording a security deposit entails a great deal of sacrifice. By creating a burden of evidence on the part of the landlord we are giving tenants, especially our most vulnerable, another tool in the toolbox to protect themselves against egregious claims of their hard earned money.
Arguments in Support
East Bay for Everyone supports this measure:
According to the Federal Reserve's Survey of Consumer Finances, the bottom quartile of American households (most of whom are renters) had a median net worth of under $3,500 in 2022. As such, just one month's security deposit can be a major factor for millions of households' financial stability, but landlords often use and spend these funds in unaccountable ways. [This bill] would put more guardrails around landlords' use of funds, to ensure landlords do not use them for normal wear and tear or property improvements, and would increase potential civil damages for violating. Renters have far less negotiating power than landlords as only one side at the table has their shelter at stake, which is a kind of market failure: therefore regulation is needed to make the contractual relationship fair and even.
UC San Diego Housing Commission also writes in support:
[This bill] will address the concerns of student renters while also preserving the landlord's right to repair any damages caused by the tenant with the security deposit. Existing law limits the landlord's claim of a security deposit to only those amounts as are reasonably necessary for the repair of damages to the premises, exclusive of ordinary wear and tear, to return the unit to the same level of cleanliness it was in at the inception of the tenancy. Under the current system, however, landlords are able to overcharge tenants to subsidize upgrades to the unit after the termination of the tenancy. Bad-faith retentions like this reduce the accessibility of housing, as many renters depend on the return of their security deposit to cover the costs associated with moving to another unit.
By requiring any deductions from the security deposit to be justified with photo evidence and preventing landlords from making additional claims on a deposit after a valid initial inspection is conducted, [this bill] will help protect the security deposits of tenants and close existing loopholes that allow landlords to violate the intention of the law.
Arguments in Opposition
A coalition of regional apartment associations, including the East Bay Rental Housing Association, oppose the introduced version of the bill:
AB 2801 proposes to limit the use of a security deposit to material and supplies necessary to make reasonable replacement or repairs and prohibits the use of professional cleaning services, including carpet cleaning. AB 2801 also leaves a gap of time between a pre-move out inspection and when tenants fully vacates the dwelling that exposes property owners or their agents to liability for damage caused by tenants and prohibiting recovery from tenants.
AB 2801 is an attempt to redefine the definition of a "security deposit" by severely limiting the ways in which a property owner may provide a clean and sanitary unit to a subsequent tenant following damage caused by a former tenant without violating California State Habitability Laws.
FISCAL COMMENTS
None.
VOTES
ASM JUDICIARY: 9-3-0
YES: Kalra, Bauer-Kahan, Bryan, Connolly, Haney, Maienschein, McKinnor, Pacheco, Reyes
NO: Dixon, Essayli, Sanchez
UPDATED
VERSION: April 25, 2024
CONSULTANT: Shiran Zohar / JUD. / (916) 319-2334 FN: 0002818
Date of Hearing: April 30, 2024
ASSEMBLY COMMITTEE ON JUDICIARY
Ash Kalra, Chair
ABPCA Bill Id:AB 2801
Author:(Friedman) – As Amended Ver:April 25, 2024
SUBJECT: Tenancy: security deposits
KEY ISSUE: in order to ensure that tenants are not unfairly charged, should certain guardrails be added to security deposit law, such as requiring photographs to support repair or cleaning charges and prohibiting charges for materials or labor not “reasonably necessary to return the premises to the condition it was in at the inception of the tenancy, exClusive of ordinary wear and tear?”
SYNOPSIS
Existing law limits the amount that a landlord can deduct from a tenant’s security deposit at the end of a tenancy. It also establishes procedures for permissible deductions, including requiring a landlord to provide a tenant the opportunity to request an initial inspection, requiring a landlord to provide a written itemized statement of any deduction, and establishing a time certain by which funds and documentation must be provided to the tenant. This measure places important guardrails on this process to better ensure that tenants are not unfairly charged for security deposit deductions. First, the measure clarifies that deductions for labor and materials are limited to those “reasonably necessary to restore the unit to the condition it was in at the beginning of the tenancy, exclusive of wear and tear.” This language was added to curb efforts by some landlords subsidizing improvements to the unit with their former tenant’s security deposit. Second, and in the same vein, this measure prohibits the growing trend of charging for professional cleaning and carpet cleaning services as a matter of course, and establishes that such deductions are only permissible when reasonably necessary to return the unit to the condition it was in before the tenancy began. Finally, the measure requires landlords to take photographs at the beginning and end of the tenancy, as well as after any repairs or cleaning were completed. This photograph requirement is intended to minimize disputes over charges, and provide documentary evidence in the event a dispute over deductions does arise. AB 2801 is co-sponsored by Student Homes Coalition and Power California Action, and supported by a broad coalition of housing advocates and public interest organizations, including the Western Center on Law & Poverty and Public Advocates. The author has worked extensively with the California Apartment Association to address concerns and ensure a fair process with which all landlords should be able to comply. Regional apartment associations, as well as the California Association of Realtors, remain opposed to the introduced version of the bill.
SUMMARY: Strengthens security deposit law by adopting certain guardrails. Specifically, this bill:
- Establishes that a landlord may claim against the security deposit only the amounts that are reasonably necessary, as provided.
- Establishes that claims against the tenant or the security deposit for work performed by a contractor, the landlord, or the landlord’s employee must be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
- Establishes that claims against the tenant or the security deposit for material or supplies must be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
- Prohibits a landlord from requiring a tenant to pay for, or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
- Replaces the term “may not” with “shall not” in the provisions related to security deposit limits.
- Establishes that if an initial inspection is conducted, as provided, and at the time of the inspection the premises do not contain tenant possessions that prevent the landlord from identifying repairs or cleanings due to the presence of those possessions, the landlord is prohibited from using the security for items unidentified in the itemized statement based on the initial inspection, as required.
- Provides that a landlord may still use the security deposit for allowable deductions, as provided, that occur between completion of the initial inspection and when possession of the unit returned to the landlord.
- Provides that a landlord may still use the security deposit for allowable deductions, as provided, not identified during the initial inspection due to the presence of the tenant’s possessions.
- Establishes that the initial inspection requirements, as provided, do not apply when a tenancy is terminated because the tenant is guilty of unlawful detainer, as provided.
- Establishes that for tenancies that begin on or after July 1, 2025, the landlord is required to take photographs of the unit immediately before or at the inception of the tenancy.
- Establishes that beginning on April 1, 2025, the landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make a deduction from or claim against the security deposit, as permitted.
- Establishes that beginning on April 1, 2025, the landlord must take photographs of the unit within a reasonable time after any repairs or cleanings for which the landlord is making a deduction or claim against the security deposit are completed.
- Establishes that if a deduction is made for repairs or cleanings, as permitted, the landlord must provide photographs, as provided, along with a written explanation of the cost of the allowable repairs or cleanings.
- Provides that the landlord may provide the photographs required in 13) to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.
- Establishes that a landlord is not entitled to claim any amount of the security, if in bad faith, they fail to comply with the requirements regarding return of the security deposit.
EXISTING LAW:
- Defines “security” for the rental of residential property as a payment, fee, deposit, or charge, to be used for any purpose by the landlord, including but not limited to:
- Processing a new tenant;
- Ensuring advance payment of rent;
- Compensating for nonpayment of rent;
- Repairing damages to the property, other than ordinary wear and tear, caused by the tenant or the tenant’s guest or licensee;
- For tenancies beginning on or after January 1, 2003, cleaning the property upon termination of the tenancy in order to restore the same level of cleanliness the property had at the beginning of the tenancy; or
- Cover any obligation, as established by the rental agreement, to restore, replace, or return personal property or accessories, other than due to ordinary wear and tear. (Civil Code Section 1950.5 (a).)
- Excludes from the definition of “security” any permissible application screening fee that a landlord charges a prospective tenant. (Ibid.; Civil Code Section 1950.6.)
- Starting July 1, 2024, limits the amount of a security deposit a landlord can collect for a rental property to no more than one month's rent, regardless of whether the property is furnished or unfurnished. (Section 1950.5 (c)(1).)
- Establishes that notwithstanding 3), above, small landlords who meet the following requirements may demand or receive security up to two months’ rent:
- The landlord is a natural person or a limited liability company in which all members are natural persons.
- The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent. (Section 1950.5 (c)(4)(A).)
- Clarifies that notwithstanding 4), above, service members, as defined, may not be required to pay more than one month’s rent in security deposit. (Section 1950.5 (c)(4)(B).)
- Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or pay rent that lawfully accrued within the last 12 months, the tenant does neither. (Code of Civil Procedure Section 1161(2).)
- Specifies that a tenant is guilty of an unlawful detainer and subject to court-ordered eviction if, within three days of a demand to vacate the premises or comply with a material obligation under the lease other than the payment of rent, the tenant does neither. (Code of Civil Procedure Section 1161(3).)
- Specifies that a tenant who maintains, commits, or permits the maintenance or commission of a nuisance on rental property thereby terminates the lease and may on that basis be subject to an unlawful detainer action seeking a court order for the eviction of the tenant if the tenant does not vacate within three days of receiving notice from the landlord about the nuisance. (Code of Civil Procedure Section 1161(4).)
- Permits a landlord to claim only that portion of the security necessary for the purposes set forth in 1) above. (Section 1950.5 (e).)
- Prohibits a landlord from asserting a claim against the tenant or the security for damages to the premises, defective conditions that preexisted the tenancy, ordinary wear and tear, or the cumulative effects of wear and tear. (Ibid.)
- Provides that within a reasonable time after notification of either party’s intention to terminate the tenancy, or before the end of the lease term, the landlord must notify the tenant in writing of the tenant’s option to request an initial inspection where the tenant may be present. (Section 1950.5 (f)(1).)
- Establishes that at a reasonable time, but no earlier than two weeks before the termination or the end of lease date, upon the request of the tenant, the landlord or their agent must make an initial inspection of the premises prior to any final inspection the landlord makes after the tenant has vacated the premises. (Ibid.)
- Establishes that the purpose of the initial inspection is to allow the tenant an opportunity to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security. (Ibid.)
- Provides that the landlord’s obligation to conduct an initial inspection is triggered only upon the tenant’s request. (Ibid.)
- Provides that if an inspection is requested, the parties must attempt to schedule the inspection at a mutually acceptable date and time. The landlord must give at least 48 hours’ prior written notice of the date and time of the inspection if either a mutual time is agreed upon, or if a mutually agreed time cannot be scheduled but the tenant still wishes an inspection. (Ibid.)
- Permits the tenant and landlord to agree to forgo the 48-hour prior written notice by both signing a written waiver. (Ibid.)
- Establishes that a landlord must provide the tenant with an itemized statement, based on the inspection, specifying repairs or cleanings that are proposed to be the basis of any deductions from the security the landlord intends to make, as permitted. (Section 1950.5 (f)(2).)
- Provides that the landlord must give the statement in 17) to the tenant at the inspection, if the tenant is present, or must be left inside the unit. (Ibid.)
- Provides that during the period following the initial inspection until termination of the tenancy, the tenant has the opportunity to remedy identified deficiencies in order to avoid deductions from the security. (Section 1950.5 (f)(3).)
- Permits a landlord to use the security deposit for itemized deductions that were not cured by the tenant, as provided. (Section 1950.5 (f)(4).)
- Permits a landlord to use the security for any permitted purposes, as provided, that occurs between completion of the initial inspection and termination of the tenancy or that was not identified during the initial inspection due to the presence of a tenant’s possessions. (Section 1950.5 (f)(5).)
- Establishes that no later than 21 calendar days after the tenant has vacated the premises, but not earlier than the time that either the landlord or the tenant provides a notice to terminate the tenancy or not earlier than 60 calendar days prior to the expiration of a fixed-term lease, the landlord must furnish the tenant, by personal delivery or by first-class mail, postage prepaid, a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and must return any remaining portion of the security to the tenant. (Section 1950.5 (g)(1).)
- Requires the landlord to provide to the tenant, the itemized statement and copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises, as follows:
- If the landlord or landlord’s employee did the work, the itemized statement must reasonably describe the work performed. The itemized statement must include the time spent and the reasonable hourly rate charged.
- If the landlord or landlord’s employee did not do the work, the landlord must provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement must provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
- If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit. (Section 1950.5 (g)(2).)
FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.
COMMENTS: This measure places necessary guardrails on the security deposit deduction process. The author points to the Attorney General’s statement in a recent settlement with a predatory landlord, to explain the bill’s import:
For many renters, especially those from lower income backgrounds, affording a security deposit entails a great deal of sacrifice. By creating a burden of evidence on the part of the landlord we are giving tenants, especially our most vulnerable, another tool in the toolbox to protect themselves against egregious claims of their hard earned money.
Renting in California. Almost 17 million people rent their homes in California, amounting to 44 percent of the state’s population. (California Budget and Policy Center, California’s 17 Million Renters Face Housing Instability and Inequity Before and After COVID-19 (Jan. 2021).) Many of these renters are cost-burdened. As of 2020, over 52% of renter households paid more than 30% of their total income in rent, and 27% were severely cost-burdened, paying more than 50% of their income in rent. (California Housing Partnership, California Affordable Housing Needs Report 2021 (March 2021).) Black households are nearly 50% more likely to be severely cost-burdened than white households. (Ibid.)
Median rent in California has increased 35% since 2000, while median renter household income has only increased by 6%. (Ibid.) Because the security deposit amount is anchored to the monthly rental amount, security deposit amounts have likewise seen a significant increase over the same period of time.
California’s new security deposit limit. On July 1, 2024, California’s new security deposit limit will go into effect, capping the security deposit for most furnished and unfurnished units at an amount equal to one month’s rent. (AB 12, Haney, Chap. 733, Stats. 2023). That measure was enacted by the Legislature in recognition of the skyrocketing cost of rent—and therefore security deposits—since the previous two months’ rent for unfurnished apartments was adopted in 1977. (AB 94 (Rosenthal, Chap. 971, Stats. 1977).)
Existing law provides tenants with certain rights regarding the return of their security deposit at the end of their lease. Civil Code Section 1950.5(e)-(g) outlines the process and requirements for landlords to return the security deposit to tenants.
Initial inspection process. A tenant may request an “initial inspection” before they move out of their rental. The initial inspection process aims to document the conditions prior to the tenant vacating the premises, and in order to know ahead of time what repairs, if any, are necessary. During the “initial inspection” the landlord or the landlord’s agent identifies defects or conditions that might justify deductions from the screening deposit. The tenant has the right to be present during the inspection. Based on the findings of that inspection, the landlord or agent must prepare an itemized statement of repairs or cleaning that the landlord or agent believes the tenant should perform in order to avoid deductions from the tenant’s security deposit. The landlord cannot, for example, use the security deposit to repair damages or correct defects in the rental that existed before the tenant moved in, or that are the result of ordinary wear and tear. After the initial inspection, the tenant may make the repairs or do the cleaning described in the itemized statement as allowed by the rental agreement, to avoid deductions from the deposit.
Final inspection process. The landlord may perform a final inspection after the tenant has moved out of the rental. The landlord may make a deduction from the tenant’s security deposit to repair damages to the unit, exclusive of ordinary wear and tear, or perform cleaning necessary to return the unit to the same level of cleanliness it was in at the beginning of the tenancy, in the following instances:
- Where the damage/condition was identified in the itemized statement and the tenant did not repair or correct; or
- Where the damage/condition occurred after the initial inspection; or
- The damage/condition was not identified during the initial inspection process due to the presence of the tenant’s possessions.
Landlord’s obligations at end of tenancy. Within 21 days after the tenant vacates the property, the landlord must return the full security deposit to the tenant. Or, if the landlord has deducted from the deposit, within the same 21-day period, they must return any remaining amount along with written notice of their withholding. This notice must include an itemized statement explaining the deductions, along with receipts or invoices for any repairs or cleaning expenses, including any labor and materials.
This bill strengthens landlord-tenant law regarding security deposits and the inspection process in two keys ways.
- Permissible charges. Amends existing law, which allows for claims for materials and supplies limited to “an amount necessary to make reasonable replacements” by requiring that claims for materials, supplies, and labor be limited to “a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.” This change is intended to prevent landlords from subsidizing improvements to their rental unit with their prior tenant’s security deposit. The measure also prohibits the inclusion of professional carpet cleaning and other professional carpet cleaning service, which has become more commonplace in many leases, unless “reasonably necessary to return the premises to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.”
- Photograph requirement. This measure requires landlords in all leases beginning on or after July 1, 2025 to also take photographs immediately before or at the inception of the tenancy. And starting April 1, 2025, all landlords will be required to take photographs of the unit after the tenant moves out, but before repairs or cleanings, which the landlord intends to deduct from the security deposit, are performed. The landlord is then required to take photographs of the unit after the repairs/cleaning are completed. If the landlord does intend to deduct for damages/cleaning, they must provide photographs to the tenant in addition to the itemized statement. This photograph requirement is meant to minimize disputes over charges, and provide documentary evidence in the event a dispute over deductions does arise.
ARGUMENTS IN SUPPORT: East Bay for Everyone supports this measure:
According to the Federal Reserve's Survey of Consumer Finances, the bottom quartile of American households (most of whom are renters) had a median net worth of under $3,500 in 2022. As such, just one month's security deposit can be a major factor for millions of households' financial stability, but landlords often use and spend these funds in unaccountable ways. AB 2801 would put more guardrails around landlords' use of funds, to ensure landlords do not use them for normal wear and tear or property improvements, and would increase potential civil damages for violating. Renters have far less negotiating power than landlords as only one side at the table has their shelter at stake, which is a kind of market failure: therefore regulation is needed to make the contractual relationship fair and even.
UC San Diego Housing Commission also writes in support:
AB 2801 will address the concerns of student renters while also preserving the landlord's right to repair any damages caused by the tenant with the security deposit. Existing law limits the landlord’s claim of a security deposit to only those amounts as are reasonably necessary for the repair of damages to the premises, exclusive of ordinary wear and tear, to return the unit to the same level of cleanliness it was in at the inception of the tenancy. Under the current system, however, landlords are able to overcharge tenants to subsidize upgrades to the unit after the termination of the tenancy. Bad-faith retentions like this reduce the accessibility of housing, as many renters depend on the return of their security deposit to cover the costs associated with moving to another unit.
By requiring any deductions from the security deposit to be justified with photo evidence and preventing landlords from making additional claims on a deposit after a valid initial inspection is conducted, AB 2801 will help protect the security deposits of tenants and close existing loopholes that allow landlords to violate the intention of the law.
ARGUMENTS IN OPPOSITION: A coalition of regional apartment associations, including the East Bay Rental Housing Association, oppose the introduced version of the bill:
AB 2801 proposes to limit the use of a security deposit to material and supplies necessary to make reasonable replacement or repairs and prohibits the use of professional cleaning services, including carpet cleaning. AB 2801 also leaves a gap of time between a pre-move out inspection and when tenants fully vacates the dwelling that exposes property owners or their agents to liability for damage caused by tenants and prohibiting recovery from tenants.
AB 2801 is an attempt to redefine the definition of a “security deposit” by severely limiting the ways in which a property owner may provide a clean and sanitary unit to a subsequent tenant following damage caused by a former tenant without violating California State Habitability Laws.
AB 2801 sends a reprehensible message to tenants that they may willfully cause damage to a temporary residence without consequence; and that said willful damage is the, “cost of doing business,” as a property owner in California.
California property owners that provide housing to renters are not afforded the same opportunity as most private business owners the right to refuse service based on conduct; California property owners do not ascertain an applicant’s personal hygiene methods or cleanliness prior to being selected for tenancy; California property owners cannot carry the financial burden of damage, beyond normal wear and tear, willfully caused by tenants. Personal responsibility ought not be lost in California law condoned by this legislative body.
REGISTERED SUPPORT / OPPOSITION:
Support
California Democratic Party Renters Council
California State University Employees Union (CSUEU)
College Democrats At UC San Diego
East Bay for Everyone
GENup (Generation Up)
PowerCA Action
Public Advocates
Student Homes Coalition
Telegraph for People
Tenants Together
UC San Diego Associated Students Office of Local Affairs
UC San Diego Housing Commission
Western Center on Law & Poverty, INC.
Youthbridge Housing
Opposition
Apartment Association of Orange County
California Association of Realtors
East Bay Rental Housing Association
Analysis Prepared by: Shiran Zohar / JUD. / (916) 319-2334
Bill Author
Bill Co-Author(s):