Don’t be overcharged on your rental deposit 

Before beginning this week’s column, I want to thank the many readers who sent me get-well wishes via the Internet as well as through personal notes. It is very heartwarming to me to not only know that people read this column, but to think that they would take the time out of their day to wish me a speedy recovery. This includes my former neighbors in Forest Hill, the Vukasin family — Vlaho, Yvonne, Michael and Peter. San Francisco is a city with a big heart.

I continue to convalesce, though now I am out of the hospital, back home with my family and returning to work in a wheelchair.

I thank God that my injuries are not more severe because, as a trial lawyer, I have the unfortunate experience of sitting across the table from people who have suffered even worse experiences.

My own motorcycle collision and injuries have deepened my passion and conviction to help those who find themselves in the situation through no fault of their own. I’m learning a lot about disability access, things you don’t think about until you are using a wheelchair and have to make your way around in a world designed for those who walk. You can bet that some of my upcoming columns will address issues relating to disability rights. As I learn more, I will share with each of you so that we can all understand our rights and responsibilities.

Back to answering questions. This week’s question comes from Bradley J., who did not specify where he hails from. When sending in your questions, please make sure to identify what city and county you live in, as the law changes from place to place.

Q: “How much can they charge for an initial security deposit, and do they have to pay me interest?”

A: Pursuant to California Civil Code section 800.49(a), any charge for a residential (meaning other than commercial rental) security deposit must be made on or before the initial occupancy. No additional security deposit can be demanded after said time. Pursuant to the same code section, generally, the maximum amount of the deposit may not, in addition to the first month’s rent, exceed two months’ rent charged.

As with most everything that you read in this column, this rule is subject to certain exceptions. Each jurisdiction may have separate rules. Therefore, you should check with your local rental board to see if there are any further restrictions on what may be charged. Different rules apply depending upon the length of the tenancy and parties may make mutual agreements, more or less, regarding a security deposit. Additionally, for pets other than those that are required as guide or assistance animals, a landlord may ask for supplemental pet deposit.

As far as interest on the security deposit is concerned, Civil Code Section 800.49(d) establishes the general rule that a landlord is not required to place a security deposit into an interest-bearing account nor are they required to pay interest on the security deposit to the tenant.

San Francisco has strong pro-tenant Administrative Codes (local laws) that change this general rule.

Administrative Code Section 49.2 requires that a landlord must pay, either directly or in the form of a rent credit, an amount of interest set by the Residential Rent Stabilization and Arbitration Board (to be effective March 1 of each year) on all security deposits held for at least one year (except for government-subsidized housing units).

The rent is calculated by the Rent Board based upon the Federal Reserve Six-Month’s Certificate of Deposit rate using an average of the 12 most recent monthly rates. For example, currently, the interest rate in effect for March 1, 2012, through Feb. 28 is 0.4 percent. Pursuant to Administrative Code Section 49.2(b), this accrued interest must be paid (or credit given) once a year on the same month (commencing with the one-year anniversary date the deposit was first made).

So, Bradley, I hope this answers your question. If you live in San Francisco and are not being paid your annual interest on your security deposit, contact the Residential Rent Stabilization and Arbitration Board.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions to help@dolanlawfirm.com.

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