Let the Tenants Do the Divvying on Security Deposit

Let the Tenants Do the Divvying on Security Deposit

29-Jun-1997 Sunday
(Page H-9 )

This column on issues confronting renters and landlords is written by Certified Property Manager Robert Griswold, host of KSDO Radio's "Real Estate Today!" (Saturdays, 2-3 p.m., AM 1130) and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

Q: I recently began managing a small apartment community near a local university. I have been approached by one of our tenants saying that one of the three roommates will be leaving. They plan to get a new roommate before the fall semester; they want to leave the security deposit in place. Don't I need to return the security deposit since it is my understanding that all three roommates on the lease have equal right to the security deposit. How should I handle this?

A: Griswold: This is a very common situation for rental-property owners. Since the security deposit should run with the unit I suggest you can simplify matters by using a Release and Assignment of Security Deposit form.

Thus, when one tenant indicates that he is leaving, you have him formally release any interest he has in the security deposit and legally assign it to the incoming tenant. The outgoing and incoming tenants must handle any financial arrangements between themselves. You should also make sure that your lease or rental agreement always accurately reflects the current occupants. The use of the Release and Assignment of Security Deposit form simplifies this potentially complicated situation and minimizes the owner's chance of getting embroiled in a roommate dispute over various tenants' legal claims to the security deposit.

Q: We are interested in putting our rental home on the market. Our tenants have always paid on time but have not taken good care of the exterior of the property. We want to make sure that the interior is in good condition or make any necessary repairs prior to showing the home to prospective buyers. Do we have the legal right to inspect the home? If so, how do we go about it?

A: Kellman: The law allows for the entry by the landlord into the rental home for many reasons. These include to make repairs, show the property to buyers, new renters, repair persons and bankers -- or in the case of an emergency.

The one reason for entering the house specifically not mentioned in the law is entering to make an inspection. Thus giving a notice of an intended entry to make an inspection may be improper and an invasion of the privacy rights of the tenant.

One simple suggestion is to discuss your situation with the tenant and seek to arrive at some mutually beneficial agreement. Hiding the fact of trying to sell the house will only create problems. Explain that it may take quite a while to sell the house and that the tenant will enjoy the benefits of a fixed-up home until it is sold.

You can offer some incentives for their cooperation. For example, a nominal rent discount can pay for itself many times over if a favorable sale is made.

Q: We recently took our former landlord to Small Claims Court to recover a large deposit that they wrongfully kept. We won the case, but now they have appealed the judgment and we must appear in Superior Court. We cannot afford an attorney. What should we do?

A: Smith: Generally, only the defendant may appeal a Small Claims judgment. The plaintiff -- the party who first filed -- cannot appeal the judge's decision on the claim. At the appeal hearing, the Superior Court will rehear all of the claims in the case. The jurisdictional limit of the Small Claims Court and the same informal hearing procedures apply. Even though attorneys may represent the parties at this point, it is still the informal process as in the Small Claims Court.

If the other side has an attorney, the Superior Court judge will make sure you are treated fairly. Just like in Small Claims Court, you should be fully prepared to present your side of the case and bring any supporting witnesses and documents.

Q: The end of last month I moved from my apartment after nearly four years. During my move-out inspection with the management, they indicated that I will receive $750 of my $800 security deposit. How long does the manager/owner have to return my security deposit, and am I due any interest?

A: Griswold: There is no legal requirement in California for landlords to pay interest on your security deposit. Thus, unless you have a written agreement indicating otherwise, the landlord does not owe you any interest.

Since you have lived at your apartment for nearly four years, the amount of time to return your security deposit may have changed during your tenancy. As of Jan. 1, 1994, the law was changed and the landlord has up to 21 days after you legally terminate your tenancy to provide a disposition report on your security deposit and to return any remaining balance owed to you unless you have a clause in your lease agreement that provides for a shorter period.

Since you probably entered into your lease before Jan. 1, 1994, you may have a lease or rental agreement that provides for 14 days to account for your security deposit, as this was the law in effect at that time. The landlord is legally required to comply with this clause unless you subsequently signed a new lease or rental agreement or were served with a notice of change in terms indicating that the security deposit will be handled within 21 days as allowed under the change in the law.

If you're a tenant or landlord, the authors stand ready to answer your questions in this column, although letters cannot be answered individually. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 191, San Diego, CA, 92112. Or you may e-mail them at rgriswold@retodayradio.com

Back to 1997 Rental Roundtable Index

Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws. As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply. Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.

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Revised and Updated - Wednesday, April 26, 2006

Robert S. Griswold, CRE, CPM, CCIM, PCAM, GRI, ARM
Griswold Corporate Center
Griswold Real Estate Management, Inc.
5703 Oberlin Drive, Suite 300
San Diego, CA 92121-1743
Phone: (858) 597-6100
Fax: (858) 597-6161
Email: rgriswold.ret@retodayradio.com