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§2.07 Deduct-and-Retain Procedure

The landlord must refund any remaining portion of the security deposit, with an itemized statement indicating the amount of the security deposit received and its disposition, within 21 calendar days after the tenant has vacated the premises. Both parties may agree that any remaining portion be electronically deposited and the itemized statement be emailed to the tenant. [CC §1950.5(g)(1).] The landlord must include copies of documents showing expenses incurred by the landlord in doing the necessary work. [CC §1950.5(g)(2).] If the landlord cannot do the work before the 21 days have elapsed, he or she must provide the tenant with a good faith estimate, followed by the actual documentation within 14 days of completion. [CC §1950.5(g)(3).] Generally, if the tenant waives these latter provisions, or the repairs and cleaning together are under $125, the landlord need not provide document copies or an estimate. [CC §1950.5(g)(4).]

If the landlord fails to provide the tenant with the written accounting for a withholding over $125, the landlord must return the entire deposit to the tenant. [Granberry v Islay Invs. (1955) 9 C4th 738, 745; see CC §1950.5(g).] However, even if the landlord forfeits the summary deduct-and-retain procedure, the landlord retains a right to claim damages for unpaid rent, repairs, and cleaning. [See CC §1950.5(e).] These damages are recoverable in a subsequent proceeding, provided the landlord proves by a preponderance of the evidence that he or she suffered the damages and that the amount claimed is reasonable. [Granberry v Islay Invs., supra, 9 C4th at 749–750.]

Lesson 2:
Tenant Security Deposits
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