California has a lot of strict laws when it comes to the landlord and tenant relationship, and security deposits are especially subject to scrutiny. There are limits to how much you can collect, for example, and you have to keep the security deposit funds separate from your own money.

Security deposit returns can be especially challenging because it’s easy to make a mistake. Those mistakes, unfortunately, can be costly.

There are some specific ways to handle the return of a security deposit, and today we’re sharing some tips that may help you avoid disputes and claims.

Offer Your Redwood City Tenants a Pre Move-Out Inspection

You’re legally required to offer your tenants a pre move-out inspection. Before their lease term comes to an end and they vacate the property, you and your tenant will have the opportunity to walk through the property together to discuss what needs to be done to return the home to the condition it was in when the tenants took occupancy. Not all tenants accept this invitation, and not a lot of landlords like to do it. But, it’s actually a good opportunity to see what kind of damage and wear and tear you’re up against.

This walk through is also beneficial for your tenants who want to get as much of their deposit back as possible. Put together a list for your tenants so they know that they either have to take care of the things on that list or prepare to lose money from their deposit to pay for them.

Conduct Your Full Inspection after Move-Out

After your tenants have turned in the keys and left a forwarding address, you’ll need to go through the vacant Redwood City rental property and document its condition. Bring your move-in inspection report with you so you can compare the condition of the home at this point to the condition it was in when the tenants took possession. If you did a pre-inspection walk through with your tenants, take that list with you as well. You’ll be able to note whether they took care of the things you pointed out, and if the work was completed to standards that would hold up in court.

This is important: you cannot deduct anything from the security deposit for regular wear and tear. Those small nail holes in the walls and scuff marks from where the sofa rested cannot be charged to the tenant.

Take pictures to document the property’s condition. If you notice damages that are beyond normal wear and tear, you can charge for that. Make sure you can demonstrate that those things were not broken or damaged at the beginning of the lease.

Security Deposit Timelines: 21 Days

California law requires you to return the security deposit to the tenants within 21 days of the tenant moving out. You are permitted to charge the security deposit for tenant damage, unpaid rent and utilities, and any other costs associated with a lease break or a modification that was made to the property.

If the tenant isn’t receiving a full deposit refund, you should send the amount that they are getting back with an itemized list of what you’ve deducted and why. Be specific and include receipts, invoices, and other documentation to support what you’ve charged.

If your tenant disputes what you’ve withheld or you don’t return the deposit in time, you could face penalties of three times the amount of the original security deposit. It’s important that you know what’s expected of you, and that you follow the law.

If you’d like some help avoiding security deposit troubles with your Redwood City rental property, please contact us at Five Star Property Management. We’d be happy to answer any of your questions.