Q: I have tenant who have agreed to terminate the lease early. Can I withhold security deposit completely without cause?
There is no specific penalty, but thee is a clause in the lease which states that in the case of early termination, then the security deposit may be withhold to recover lost rent, commissions, painting fees, and any other charges needed to prepare premises for re-rental. If there's not much cleaning cost or lost rent, then there may be amount left over. Do I have to hand it back within the 21 day period?
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A:
As a California landlord, you must follow the state's security deposit laws, which apply even in cases of early lease termination. You cannot withhold the security deposit without a valid reason, as this would violate California Civil Code Section 1950.5.
Your lease clause allows you to use the deposit for specific purposes like lost rent, commissions, and cleaning fees - but you must provide itemized documentation of these expenses. If there are minimal costs and leftover funds, you are legally required to return the remaining amount to your tenant, regardless of the early termination agreement.
The 21-day requirement still applies in this situation - you must provide your former tenant with an itemized statement and return any unused portion of the deposit within 21 days after they vacate the property. Failing to do this could result in penalties, including having to pay up to twice the amount of the security deposit if a court finds you acted in bad faith. Consider documenting all expenses carefully and returning any unused funds promptly to avoid potential legal issues.
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