Security Deposit Law Applies to All Landlords, Large and Small
By Project Sentinel

Question: I own a duplex. I live in one side and rent out the other. Do the new requirements on handling deductions from a security deposit apply to me?

Answer: The changes to Civil Code 1950.5, which went into effect Jan. 1, (2004) apply to all rental properties regardless of size. The changes affect what documentation must be provided to a tenant when the deductions from a deposit exceed $125.

The new version of the statute requires an itemized statement detailing the time spent to repair and/or clean the unit and the reasonable hourly rate charged. If the work was performed by a business, the landlord must provide a copy of the bill, invoice or receipt. If the invoice or bill does not contain the name, address and phone number of the service provider, the landlord must provide it.

If a deduction is for materials or supplies, the landlord must provide a copy of the bill, invoice or receipt. If the landlord buys these items on a regular basis, the tenant must receive a copy of the bill, invoice or receipt, vendor price list or vendor document that lists the cost of the item used in the unit. An example of a vendor price list could be a plumbing catalog that lists the per-unit cost.

If a repair cannot be completed before the 21-day requirement for deposit settlement, a landlord can deduct a "good faith" estimate and list it on the itemized statement.
If the estimate is given because the party doing the repair has not provided the documentation or the landlord is waiting for parts, supplies or a service company, the name, address and phone number of the service person or the parts or supply source must be listed on the statement sent to the tenant.

Fourteen days after completing the repair or receiving the documentation, a landlord must give receipts to the tenant. Tenants can waive their right to the receipts.

Los Angeles Times March 20, 2004

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