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§2.03 What’s Not a Security Deposit

Security deposits cannot be retained by the landlord to remedy “ordinary wear and tear” that occurred during the tenant’s term or preexisted the term, or to repair any damage or defective conditions that preexisted the tenancy. [CC §1950.5(e).]

“Application screening fees” are distinct from “processing fees,” which are otherwise included in the definition of a security deposit. [CC §1950.5(b).] A screening fee may be charged to cover the landlord’s cost of obtaining personal reference checks, consumer credit reports, and other similar information. A screening fee must be no greater than the actual cost of gathering the information concerning the applicant, and in any case, no more than $30. [CC §1950.6(a), (b), (h).] Application-screening fees are nonrefundable on termination of the tenancy, unlike security deposits.

Lesson 2:
Tenant Security Deposits
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