Security Deposit

• There are four reasons a landlord can withhold part or all of a tenant's security deposit. One of them is to repair damages. The landlord, however, can only charge the tenant the cost of restoring the premises to the same condition it was in when the tenant took possession. The tenant cannot be assessed for improvements. The other reasons to withhold the security deposit are unpaid rent, cleaning and, if expressly authorized in the rental agreement, the cost of replacing furniture or property such as keys.
  
  

Preliminary Inspection

• By law, a tenant is entitled to a preliminary inspection of the premises by the landlord prior to moving out, unless evicted. If requested by the tenant, this must occur during the last two weeks of the tenancy, ideally while the tenant can be present. The landlord must provide a written list of proposed deductions for damages and give the tenant the opportunity to make the repairs independently.
  
  

Damage

• A tenant cannot be charged for wear and tear. Wear and tear includes slight discoloration of paint, minor scratches and nail holes. The tenant is not required to repair these conditions, nor can the tenant be charged for them. Damage includes conditions that would make the premises "uninhabitable" according to the checklist for habitability (see Resources for a detailed list).
  
  

Condition of Premises

• An outgoing tenant can be financially responsible only for bringing the rental premises back to the condition at the inception of the tenancy, less reasonable wear and tear. Still, between cleaning and repair, landlords have some leeway to shift the cost of preparing the premises for new tenants to a vacating tenant. To avoid being assessed these costs, remove all trash from the premises, hire a professional carpet cleaner and save the receipt, and photograph all aspects of the premises.
  
  

Return of Security Deposit

• Under California law, the landlord must return the tenant's security deposit within 21 days of its termination. If there are deductions from the security deposit, these must be itemized in an accompanying notice. If the landlord fails to return the security deposit or has inappropriate deductions, the tenant's remedy is to sue the landlord in small-claims court. Prior to filing a complaint, however, a forceful demand letter should be mailed to the landlord explaining why the deductions were inappropriate. Note in the letter that the landlord can be sued not only for the withheld money but for "statutory damages and interest" for bad-faith retention of the security deposit.