Tenant security deposits

After 2002, laws and regulations pertaining to residential tenants’ security deposits became more complicated. Here’s a review.

By Michael Hall, Esq.

SPOSFI 2/08 Newsletter

To begin a tenancy, you as a landlord may collect the first month’s rent plus a security deposit. That deposit may not be more than two months’ rent, unless the unit is furnished, in which case the deposit may equal threemonths’ rent.

These monetary limits apply to the total of all sums collected at the outset of the tenancy, regardless of what these are called (i.e., security deposit, key deposit, cleaning deposit, cleaning fee, last month’s rent deposit, pet deposit, or other terms). If the initial lease term exceeds six months, the landlord may accept six months (or more) pre-paid rent. If the tenant intends to have a water bed, you may collect an additional deposit equal to one-half a month’s rent, plus a fee to cover reasonable administrative costs.

The only other exception to the deposit sums ceiling is that landlords may collect a nonrefundable fee to cover out-of-pocket cost for tenant application screening and credit reports. That fee is not considered a deposit. Other than the application screening fee, all deposits must be refundable, and may not be labeled “nonrefundable.” You may not collect an additional deposit for a disabled tenant’s guide, service, or signal dog.

However, the tenant remains responsible for any damage caused by the animal. You may charge an additional deposit if the tenant operates a family day care home, but no more than the maximum amount otherwise allowed under the rules described above. If the unit is rent-controlled, you may lawfully provide in your rental agreement that the security deposit will increase proportionately to reflect the lawful annual rent increases and any other increases…..full article SPOSFI Feb 2008 NL

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About Cheryl Bower

Cheryl is a S.F. native & 17 year property investor/renovator, specializing in S.F. real estate including residential sales & leasing.

She represents sellers, first time buyers, move up buyers, investors, & landlords in San Francisco, San Mateo County & beyond.

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