Can Security Deposits Be Used to Cover Unpaid Rent

Landlords sometimes wonder whether they can use a tenant’s security deposit to cover unpaid rent. The answer depends on whether the landlord planned ahead. Although security deposits cannot be used to cover “normal wear and tear,” California law allows property owners to use security deposits and pet deposits to pay for various tenant expenses, as long as those expenses are explicitly outlined in the lease agreement.

As you can imagine, security deposits can be a contentious issue between landlords and tenants, and defining “normal wear and tear” sometimes requires litigation. It is generally accepted that most things have an expiration date. Carpets last about five years, interior paint lasts about three years, and so on. Expiration dates for items in rental properties are shorter than those for owner-occupied residences, presumably because people tend to take better care of things they own as compared to things they rent.

Judges in small claims courts often have a chart of accounts with estimated expiration dates to help them remain consistent when adjudicating cases. If a tenant damages something that has expired, according to the chart of accounts, a judge is more likely to rule in a tenant’s favor. For example, given that carpets usually last five years, if a landlord asks a tenant to pay for holes in a two-year-old carpet, the judge is likely to rule in the landlord’s favor. However, if a landlord asks a tenant to pay for those same holes in a ten-year-old carpet, the judge is likely to rule in the tenant’s favor The truth is, if a tenant lives in a place long enough, “normal wear and tear” can cover many things.

Writing detailed lease agreements is good for everyone because it decreases misunderstandings. Be aware, if the lease allows smoking, then normal wear and tear may include the smell and residue caused by cigarettes. Landlords who allow pets often require an additional security deposit that, like other security deposits, can only be used for expenses outlined in the lease. Allow me to illustrate.

Let’s say Sammy the Friendly Rottweiler is a gem of a dog. The tenants try to explain this to the property owner but he’s a nervous fellow, so he collects a $2,000 pet deposit in addition to the $2,000 security deposit to cover any damage Sammy might cause.

A year later, the tenants move out. Sammy has indeed behaved admirably, not causing one penny’s worth of damage. However, the tenant’s three-year-old daughter used her bedroom walls as a canvas for her permanent-marker masterpieces and the tenant’s teenage son expressed his anger by punching holes in several walls. And dad, trying to be helpful, painted the exterior of the property, but unfortunately, he used interior paint. So, the landlord has about $10,000 worth of repairs and maintenance to take care of. Can he use the pet deposit since the security deposit doesn’t cover the damage? Sadly for him, the answer is no.

In this case, if the landlord wants to be reimbursed for his expenses, he must send a bill for $8,000 to the tenant with a letter explaining that although the security deposit covered some of the damage, it did not cover the full cost of repairing the daughter’s artwork, the holes in the sheetrock, and repainting the exterior. Along with the bill, the landlord must include a $2,000 refund check for the pet deposit because the lease explicitly stated that the pet deposit could only be used for damage done by Sammy—and there was none. This is a reason not to collect first and last month’s rent, plus a security deposit. The last month’s rent can only be used for rent, not to repair damage. The best course of action is to collect a security deposit that can be used to cover a broad range of damage—by pets or humans.

If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.

Dick Selzer is a real estate broker who has been in the business for more than 40 years.



Leave a Reply

Your email address will not be published.