Did you know that California's laws regarding security deposits are changing this year? If you collect security deposits from tenants (and you should!), you need to have a comprehensive understanding of these laws.
Antelope Valley, California, landlords who fail to follow local, state, and federal regulations can face unpleasant consequences. A property management company can help you stay compliant and up to date on new changes.
Keep reading to learn what's new and what is staying the same.
Security Deposit Laws: What's New?
California is changing its security deposit laws. Specifically, it wants to make housing more affordable for tenants while still protecting landlords.
On July 1, 2024, a new bill will limit how much landlords can charge for security deposits to a maximum of one month's worth of rent.
So, what's different? Well, before, the law stated that landlords could charge equal to two months of rent as a security deposit.
Breaking Down Collection and Holding
While the maximum deposit amount is changing, other laws are staying the same. California is more lenient about collecting and holding security deposits for property protection.
Collecting money is easy as landlords don't have to provide receipts. However, you may choose to provide your tenants with a receipt as a courtesy. Legally, you don't have to pay interest on the amount either.
No law states landlords must keep security deposits in a separate bank account.
Landlords choose to separate these funds to keep accounting records accurate and organized. You wouldn't want to accidentally spend a security deposit you may have to return.
What About Returning Security Deposits?
Landlords still have to return security deposits within 21 days of the end of the lease. Tenants forfeit their rights to a security deposit return when they cause property damage or have unpaid rent.
Landlords can legally withhold all or part of the security deposit for these reasons. An itemized statement must be provided to the tenant detailing where the security deposit funds went.
Depending on the extent of repairs and restoration, creating an accurate itemized list can take time. Once repairs are complete, landlords have 14 days to give the tenants the itemized expense statement.
In addition to damages beyond normal wear and tear and unpaid rent, you can use the security deposit to cover cleaning costs. This is legal when cleaning is required to restore the unit to its same clean condition as when the tenant moved in.
How Property Managers Can Help You
In Antelope Valley, California, landlords can make passive income with quality tenants.
At PMI Antelope Valley, we offer a thorough screening process to mitigate your risk of a bad tenant. Still, we know someone who doesn't pay rent or damages the property can slip through the cracks.
This is why we encourage landlords to collect security deposits. For over 20 years, we've been helping local landlords follow the laws regarding rental property management as they change. Let us help you do the same!
Contact us today to learn more about our extensive list of services.
