New
law simplifies deposit debate
By
Sheri Graves
A law that took effect
Jan.1 2003 requires landlords to give tenants a pre-exit apartment
inspection.
In that inspection, the landlord will point out what the tenant
needs to
do to receive full return of the tenant’s security deposit.
The law also counts all
deposits made by the tenant toward the total security deposit and is
explicit
about what is cause for deduction by a landlord.
Tenants, landlords gain clear explanation of limits on deposits, rules for inspections and returns.
Both tenants and landlords benefit
from the
clarity of a new state law that provides for a pre-exit inspection
during which
renters can learn in advance what they need to do to receive full return
of
their security deposit.
The law, which took effect Jan. 1, considers all deposits- final
month’s rent, cleaning deposit, etc.- as part of the overall “security
deposit” and lists what expenses landlords may deduct from the total.
“Landlords who don’t follow the rules can be fined up to twice
the
amount of the security deposit in addition to paying any actual damages
suffered
by the resident,” said Nancy Burton, manager of the North Coast Rental
Housing
Association. “Previously, they
could be fined no more than $600.”
According to Burton, the new law specifies that amounts to be
deducted
from a security deposit may cover four areas of expense:
·
Past-due
unpaid rent.
·
Repair of
damages to the property, not including “ ordinary wear and tear.”
·
Necessary
cleaning of the premises to return the unit to the condition it was at
the
beginning of tenancy.
·
Default
by
the tenant of any obligation to replace, restore or return certain
property
of the unit, such as reinstallation of the original window coverings,
etc.
“Under the new law,” Burton said,
“the property owner or landlord has 21 days
from the move-out date to provide and accounting of how security deposit
monies
have been spent and to refund the balance, if any.
When the security deposit doesn’t cover all of the expenses, the
balance may be collected through court action.”
When it comes to security deposits, arguments between tenants and
landlords are common. Molly Ackley,
community housing services manager foe Fair Housing of Sonoma County,
said
disputes involving security deposits are the No. 1 post-tenancy problem
in the
rental market.
“Tenants complain amounts were unfairly withheld,” Ackley said.
“Landlords complain that residents damage the property to extents
that
exceed the security deposit. Small
claims courts are jammed with such disputes.”
Security deposits are traditional in the rental market and may
range from
as little as a few hundred dollars up to a couple thousand.
The new law limits the amount to no more than twice the monthly
rent on
as unfurnished unit and no more than three times the monthly rent on a
furnished
unit.
Rental experts put the average monthly rent in Sonoma County at
approximately $1,100. Actual rents
vary according to location, size, type and condition of the property. Apartments generally have lower rents than do
duplexes, which
usually rent for less than single-family homes.
According to Ackley, rents in Sonoma County range from $700 to
$1,100 for
a one-bedroom unit and $1,200 to $1,800 for a two-bedroom unit. To move from one rental to another, she said,
tenants usually
need $3,000 to $5,000 in cash to pay first month’s rent and security
deposits.
Gerald Cox, media representative foe RealFacts Information
Services, said
market rates for multifamily rentals in complexes of 50 or more units in
Sonoma
County as of December 20023 were $702 for studios; $942 for
one-bedroom/one-bath; $1,218 for a two-bedroom/two-bath; $1,278 for a
two-bedroom townhouse; $1,547 for a three-bedroom/two-bath townhouse;
and $
2,341 for a three-bedroom/2 ½ bath.
“Within that mix,” Cox said, “the one-bedroom/one-bath
constitutes
nearly 43 percent and the two-bedroom/two-bath is more than 26 percent.”
Since the amount of rent has a direct bearing on the amount of
the
security deposit, landlords must be careful not to exceed limits
specified by
law.
“This new law occupies more than two pages of codes,” said O.
Gordan
Thomas, a Santa Rosa attorney specializing in landlord issues.
“The newest provision is the pre-move-out inspection, which a
tenant
may request two weeks prior to surrender in order to identify defects
which must
be cured in order to receive a full refund of the security deposit.”
The law also provides s for a new form that has a statement
setting forth
the rights of tenants and landlords. Standard
forms
now are used for the initial walk-through inspection, the pre-move-out
inspection and the final turnover.
“Our advice is to take photographs during each of these
inspections,”
said Ackley. “It’s a good idea
to have someone videotape the walk-through itself and focus on anything
that is
mentioned as a defect or problem. This
way you can document the condition of the unit before, during and after
the
tenancy.”
With an estimated 48,000 rentals in Sonoma County, the new law on
security deposits impacts at least 100,000 landlords and tenants in this
region
alone. Many owners of rental
properties have only one or two units and don’t belong to industry
organizations that help keep them abreast of accelerating changes in
landlord-tenant law.
“Those who don’t stay abreast of the law,” said Thomas,
“eventually will pay the consequences.”