As many of you know I am the State of California rep for the blog: www.CaliforniaLandlordSolutions.com and I often get calls from people who found out website and want advice on how to handle a situation.
Last week I was called by a lady who was shocked that her former tenant was taking her to Small Claims Court for $5000.00 these tenants had a history of not paying rent and at one time were 4 months behind. When they did move the owner refund most of their deposit minus the late fees incurred. Now she is being sued.
Tenants are suing her for not returning the security deposit within the 21 days as is required by law. The lady stated she was traveling and didn’t get the deposit back within the 21 days but hadn’t the tenants breached the rental contract by not paying rent.
Well two wrongs don’t make a right. Unfortunately, one has nothing to do with the other. The tenant’s claim is valid and if the judge sides with the tenants the owner could owe them 2x the security deposit.
So what to do? I would try to negotiate with tenant to get a settlement. If you do take your chances and go to court be prepared to hand over money in the worst case scenario and show the judge you were not acting in bad faith.
Lesson Learned? Security Deposits ALWAYS must be returned within 21 days of receipt of keys. If work is still going on and you don’t have the actual receipts to send with the return of the deposit then you need to do estimates of the cost and hold back the money and send the remaining portion to the tenant. Then once the work is done send copies of the receipts and any money owed the tenant.
California is a tenant state and judges favor tenant rights so know the law. Read the Nolo Press books, have a landlord/tenant attorney on file for questions and get educated. I don’t know how this case will settle out and if I hear I will pass along the info.
If you have property management needs in Santa Cruz please give me a call or check our my new revised website: www.PortolaRentals.com
PS. One of the new laws passed in 2012. Sm. Claims Court awards are now increased from $7500 to $10,000.