For new renters, there can be a significant upfront cost before moving in. First month's rent, a broker's fee, and more. But one aspect some renters don't consider is security deposits.
A security deposit is essential both for the renter and the landlord. It's a renter's way of proving intent to remain, and insurance for the landlord's sake. But misunderstandings about what it is--or isn't--can lead to legal headaches and confrontations.
Before you draw up a contract for your San Mateo rental property, it pays to know the details. In this guide, we'll discuss the three big things you should know about San Mateo security deposits.
1. There Are Limits on Security Deposits
Security deposits in San Mateo serve as a form of insurance for the landlord. If the tenant damages the apartment or fails to pay rent, then the landlord can take this deposit. But they can't demand an amount that's too high.
According to California law, a security deposit cannot be more than three times the cost of the agreed-upon rent. Further, an unfurnished apartment cannot have more than two times the rent as a security deposit. Charging more than this is illegal, and comes with steep penalties.
However, the landlord is free to determine how much the security deposit will be.
2. The Security Deposit Is Separate from Other Fees
There are a lot of fees when a renter first moves in. These may be application fees, background check fees, or even pet fees. But a security deposit is its own thing, and neither landlords nor renters should mistake them.
In the contract, outline in no uncertain terms what the security deposit will be. Then separate this from other fees included in the application and move-in process. It's important to make this clear to avoid miscommunications that could end badly.
3. There Is a Date by Which You Must Return a Security Deposit
You must return a security deposit at the end of the tenant's stay in your property. However, you don't need to return it the same day they move out, or when they request it. In a San Mateo rental property, you have 21 days to return it in person or by mail.
If you don't return it (or don't return the full amount) then you need an explanation why. This explanation should include one or all of the following:
- A letter describing why you withheld the amounts you did
- An itemized list with a clear explanation for each deduction
- Receipt copies for any repairs that go beyond the $126 limit
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Security deposits are an important part of the tenant/landlord agreement. They secure the landlord against damages and unpaid rent, as well as show that the tenant is serious. However, know the above before you decide on your security deposit and what to do with it.
Five Star Property Management is San Mateo's premier property manager. Get in contact with us to learn more about property management today.