There's been a lot of talk about security deposits in the California news this year, and for good reason. For some people, a security deposit is the difference between being able to afford a place and having to look elsewhere. Saving up enough for a deposit and moving costs is tough.
But what is a security deposit anyway? If they're controversial, why do they exist at all?
We're here to talk about it. Read on to learn what you need to know about security deposits.
What Are Security Deposits For?
Security deposits are for both the landlord and the tenant to "secure" the rental. It's a sum of money that new tenants pay when they sign a lease.
For the tenant, it ensures that they're getting the unit. It also protects them from any unexpected damage fees in the future. The fees won't come out of their pockets, they'll come from the security deposit.
If there's no damage, the tenant gets the security deposit back when they end their lease so they can put it toward another rental or whatever else they choose to do with it.
For the landlord, the security deposit is a way to ensure that there will be money to cover any potential damage. It also shows that the potential tenant is serious about moving in, so they won't pull back from the deal.
How Much Is a Security Deposit?
So how much should your security deposit be? Well, that's partially up to you.
You don't have to require a security deposit before, but as we mentioned, security deposits benefit both renters and landlords. So, in other words, your security deposit could be $0.
However, most landlords choose to charge one month's rent as their security deposit. The max amount you can charge for a security deposit for an unfurnished rental is two months' rent. For a furnished rental, you can charge three months' rent.
You want your deposit to be comparable to other nearby properties. Many tenants will be happy to pay a reasonable deposit because they know that they'll be getting the money back later.
Do You Have to Return a Security Deposit?
Some newer landlords want to know if they can keep security deposits. The answer, in most cases, is no.
Managing security deposits is so necessary because that money will be returned to the tenants when they're ready to leave the property. Landlords can only retain some (or all) of the deposit money if there's damage to the property that needs to be repaired.
In some cases, other breaches of the lease agreement may also result in the tenant losing their deposit.
If a tenant leaves the property in good condition (and this includes minor wear and tear), they must receive their deposit in full. The landlord has 21 days to either return the deposit or provide an itemized list of expenses that they're using the deposit money for. The tenant can choose to fight this list if they deem it unreasonable.
If the landlord is taking over $125, they must provide invoices for the repairs. If they do the repairs themselves, the rates must be reasonable. A former tenant can sue a landlord who chooses to retain a deposit.
Security Deposits Are Simple
Security deposits may seem confusing at first, but don't worry. Most renters already know the drill, so they'll be happy to pay a reasonable deposit to a trustworthy landlord.
If you're still not sure about how to manage security deposits, it might be time to hire a property management company in Ventura, CA. We want to help! Contact us to schedule a free consultation today.
