| Summary |
The bill amends and makes additions to existing law concerning
security deposits that tenants submit to landlords and the conditions under
which a landlord may retain all or part of a security deposit.
For the purposes of security deposits, the bill expands the
definition of normal wear and tear and narrows the definition of
tenant.
Under current law, a landlord may not require a tenant to submit
a security deposit in an amount that exceeds the amount of 2 monthly rent
payments. The bill changes this maximum to one monthly rent payment.
The bill requires a landlord to permit a tenant to pay a security
deposit in multiple installments of substantially equal amounts with
installments due no more frequently than once a month over a period of
at least 6 months. If a tenant fails to pay an installment, the landlord may
seek compensation through a civil action. But a landlord may not
terminate the tenancy or initiate an eviction action, and a court may not
enter a judgment for possession, based on a tenant's failure to pay an
installment.
A landlord that wrongfully demands and retains a security deposit
in an excessive amount must return the excess amount to the tenant within
7 days after receiving a written demand from the tenant. A landlord that
fails to timely return the excess money is liable for 3 times the excess
amount.
A landlord that refuses to allow a tenant to pay a security deposit
in installments violates the Rental Application Fairness Act, and the
tenant harmed by the violation may recover damages as provided in
existing law.
Under current law, a landlord may not retain a security deposit to
cover normal wear and tear and, if actual cause exists for retaining any
portion of a security deposit, the landlord must provide the tenant:
•
A written statement listing the exact reasons for the
retention (written statement); and
•
The difference between any sum deposited and the amount
retained.
The bill states that a landlord may not retain a security deposit to
cover any damage or defective condition that preexisted the tenancy and
that when the landlord delivers the written statement, the landlord must
also deliver any relevant documentation in the landlord's possession or
control.
The bill requires a landlord, upon a tenant's request, to provide the
tenant a walk-through inspection of the dwelling unit to identify in
writing any damage or defective conditions that are beyond normal wear
and tear and that did not preexist the tenancy. If a walk-through
inspection of the dwelling unit occurs, the landlord may not retain any
amount from the security deposit for damage or defective conditions that
are not documented during the walk-through inspection.
A landlord wrongfully withholds a security deposit or any portion
of it if the landlord:
•
Fails to timely provide the written statement and all
relevant documentation;
•
Provides a written statement that fails to list the exact
reasons for retaining any portion of the security deposit;
•
Fails to timely return the difference between any sum
deposited and the amount retained; or
•
Retains a security deposit or any portion of it in bad faith.
A landlord retains a security deposit or any portion of it in bad
faith if the amount retained:
•
Unreasonably exceeds the amount of actual damages;
•
Is retained without actual cause;
•
Is an amount the landlord knew or should have known
exceeded the actual damages; or
•
Is retained solely or in part for an unlawful, retaliatory, or
discriminatory purpose.
A landlord retains an unreasonable amount if the amount retained
is 125% or greater than the actual damages.
In any court action brought by a tenant under the provisions of the
bill, the landlord bears the burden of proving the amount of actual
damages the landlord incurred.
Under current law, upon cessation of a landlord's interest in a
dwelling unit, the person in possession of a tenant's security deposit must
either transfer the security deposit to the landlord's successor in interest
or return the security deposit to the tenant within a reasonable time. The
bill states that this must be done within 60 days after cessation of the
landlord's interest in the dwelling unit.
If a landlord's payment refunding a tenant's security deposit or any
portion of it is returned to the landlord, the landlord must hold the
payment for at least one year after receiving it and must disburse the
payment to the tenant within 3 business days upon the tenant's request.
A landlord does not have actual cause to retain any amount from
a security deposit for the replacement of carpet or painting unless there
is substantial and irreparable damage that exceeds normal wear and tear
and did not preexist the tenancy. If a landlord has actual cause, the
landlord may retain only the minimum amount necessary to replace the
carpet or to repaint in the area that is damaged. A landlord may not deem
carpet substantially and irreparably damaged if it has not been replaced
with new carpet within the 5 years preceding the termination of the lease
or surrender of the premises.
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