California Apartment Association

Question: Our tenants have just informed us via telephone that their rent check will bounce, they don’t plan to cover it, and they intend to vacate the premises by the end of this month. They want us to use the majority of their security deposit as last month’s rent. If we don’t give a three-day notice to pay or quit and proceed with an eviction, are we leaving ourselves more vulnerable?

Answer: If you do not proceed with a three-day notice followed up by an eviction, you could find that the tenants decide to change their minds and not move out after all, prolonging their time in possession without paying rent. The extra “motivation” is often worthwhile. In addition, the eviction will also give you a judgment for rent owed, plus court costs and if you have an attorney fee clause in your lease, attorney fees.

Question: I served a 60-day notice of termination because I am going to sell my home. Since then, one of the two residents moved out and is asking for his half of the security deposit. Am I responsible to return the security deposit before the second person moves out?

Answer: The security deposit is normally not returned until the owner recovers possession. The tenant who vacates should work that out with the tenant who remains. It is not the responsibility of the landlord to account for the deposit until he or she recovers possession.

Question: Do I have to pay a tenant interest on his security deposit?

Answer: There are no state laws requiring that interest be paid on the tenant’s security deposit. However, some rent control ordinances and/or other local ordinances do require interest to be paid.

Kimball, Tirey & St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers. This article is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our office. If you have questions, please contact your local KTS office. For contact information, please visit our website: www.kts-law.com. For past Legal Alerts, Questions & Answers, and Legal Articles, please consult the resource library section of our website.

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