March 2019 Issue

56 MARCH 2019 • WWW.AAGLA.ORG Management Security deposit disputes are second to only late rent disputes when it comes to owner / renter problems and I think most of the problem lies in the fact that each party has their own idea of how a security deposit should be handled. I am certain you can imagine how polar opposites these two ideas are, but believe it or not, there are very standardized guidelines in the industry that if followed, will help you to avoid security deposit disputes from becoming inevitable. Before we go on, let me remind you that each state has their own laws regarding the amount of security deposit you can hold. Everything you need to know about California Security Deposits can be found here. These types of disputes can often be settled by having reasonable conversations but can also turn into ugly small claims and court appearances. To make sure this does not happen to you, there are a few things you can do to possibly avoid security deposit disputes with your renters. Put Very Specific Security Deposit Language into Your Lease Make certain you have a solid lease in place that adequately addresses a security deposit. Things to keep in mind when you are drafting up your clause about the security deposit are: • Dollar amount of the security deposit. • Definition of “normal wear and tear.” • How and when security deposit is to be returned to the renter. • What warrants use of the renter’s security deposit. • How disputes can be handled without the need of legal action. While you may think addressing the appropriate legal language concerning security deposits always means hiring a lawyer, fortunately you may look to a local apartment association like the Apartment Association of Greater Los Angeles for a lease form that takes into consideration all of the above and much, much more. Frequently Inspect Your Rental Units This too should be a very important thing to mention when signing copies of the lease. Besides writing it into your lease, be sure you take this seriously and inspect your rental units at least two times each year and handle any maintenance issues your renters may have. Your renters will constantly have these routine inspections in the back of their minds and will naturally want to care for the rental unit since “most” good renters will also want to avoid disputes. You do not have to say these inspections are necessary to “make sure you do not damage my property” but sell it like you care about the maintenance of your rental units to keep it at optimal conditions. This will also come in very handy for when you want to increase your rent! Follow California’s and Local Security Deposit Guidelines You want to always stay within the law to avoid future costly lawsuits. Keep in mind that in California, you can hold 2 times the rent amount as security deposit. If the rental unit is furnished, you are entitled to hold 3 times the amount and if you are renting a commercial property, there is no limit on what you can hold from a security deposit standpoint. Keep in mind that a renter must provide you a 30-day written notice or intent to vacate the rental unit. The HOW TO AVOID SECURITY DEPOSIT DISPUTES By Patti Widget, Law Group