To: All Stakeholders

Subject:  JRealty Security Deposit Guidance

Dear Stakeholder,                               

We follow CA Department of Consumer Affairs guidance when working with security deposit returns.  Relevant sections can be found here and here.  

In general, the reimbursement of the Tenant’s security deposit is based on the overall condition of the property when the Tenant moved out versus the condition of the property when the Tenant moved in.  When Tenant moves out, if the overall condition of the property is in the same or better as the overall condition when Tenant moved in, then security deposit should be fully reimbursed.  If the property is left in a condition that is worse than when moved in, the costs incurred to get the property into move-in condition should be deducted from the security deposit.  

We work to operate with common sense, good faith, and reasonableness when assessing security deposit deductions.

Please see the bulleted items below regarding the administration of security deposit returns:

•   can request a joint walk-through move-out inspection for some time within the last two weeks of your tenancy. Please provide via email the mailing address where Tenant would like security deposit refund check & paperwork sent. If we do not receive a new mailing address, security deposit checks & paperwork will be sent to the last known address.
• Security deposits are reimbursed within 21 days after the last day of the tenancy.
• All deductions will be itemized with the reimbursement of the security deposit.

Below is a list of specific guidance on common questions:

Walls & Paint

• Generally, minor marks or nicks in walls are the landlord's responsibility as normal wear and tear (for example, worn paint caused by a sofa against the wall). Therefore, the tenant should not be charged for such marks or nicks. However, a large number of holes in the walls or ceiling that require filling with plaster, or that otherwise require patching and repainting, could justify withholding the cost of repainting from the tenant's security deposit. In this situation, deducting for painting would be more likely to be proper if the rental unit had been painted recently, and less likely to be proper if the rental unit needed repainting anyway. Generally, large marks or paint gouges are the tenant's responsibility.
• Using CA Bureau of Real Estate’s guidance, we assume “that interior paint has a two-year life...  Using this approach, if the tenant lived in the rental unit for two years or more, the tenant could not be charged for any repainting costs, no matter how dirty the walls were.”
• If less than 2-year occupancy, we follow the following guidance:

Cost of cleaning

• A landlord may properly deduct from the departing tenant's security deposit to make the rental unit as clean as it was when the tenant moved in.
• A landlord cannot routinely charge each tenant for cleaning carpets, drapes, walls, or windows in order to prepare the rental unit for the next tenancy. Instead, the landlord must look at how well the departing tenant cleaned the rental unit, and may charge cleaning costs only if the departing tenant left the rental unit (or a portion of it) less clean than when he or she moved in. Reasonable cleaning costs would include the cost of such things as eliminating flea infestations left by the tenant's animals, cleaning the oven, removing decals from walls, removing mildew in bathrooms, defrosting the refrigerator, or washing the kitchen floor. But the landlord could not charge for cleaning any of these conditions if they existed at the time that the departing tenant moved in. In addition, the landlord could not charge for the cumulative effects of wear and tear. Suppose, for example, that the tenant had washed the kitchen floor but that it remained dingy because of wax built up over the years. The landlord could not charge the tenant for stripping the built-up wax from the kitchen floor.
• The landlord is allowed to deduct from the tenant's security deposit only the reasonable cost of cleaning the rental unit.

Carpeting

• Normal wear and tear to carpets, drapes and other furnishings should not be charged against a tenant's security deposit.  Normal wear and tear includes simple wearing down of carpet and drapes because of normal use or aging and includes moderate dirt or spotting. In contrast, large rips or indelible stains justify a deduction from the tenant's security deposit for repairing the carpet or drapes, or replacing them if that is reasonably necessary.
• One common method of calculating the deduction for replacement is to prorate the total cost of replacement so that the tenant pays only for the remaining useful life of the item that the tenant has damaged or destroyed. For example, suppose a tenant has damaged beyond repair an eight-year-old carpet that had a life expectancy of ten years, and that a replacement carpet of similar quality would cost $1,000. The landlord could properly charge only $200 for the two years' worth of life (use) that would have remained if the tenant had not damaged the carpet.