Last year saw a jump of 35% in evictions over pre-pandemic levels in San Jose.
When you're a landlord, the idea of having to evict a tenant is stressful in itself. Initiating the process is easily one of the biggest sources of landlord stress. Fortunately, there are certain measures you can take that deter poor tenant behavior and help you avoid evictions.
One of those measures is tenant screening. If you put in the work to find good tenants, there's a much higher chance you won't have to evict them. Finding good tenants is just one part of the process - inspections and security deposits are the other.
Keep reading and we'll give you the low-down on security deposits for your San Jose rental property.
What Is a Security Deposit?
A security deposit is essentially a form of insurance against poor tenant behavior. If your tenant fails to pay rent or damages your property in some way, you can use the security deposit to cover your losses.
Typically, you'd collect the security deposit at the start of a new tenancy and with a move-in inspection. During the initial inspection, you walk around the rental unit with your new tenant and make note of any existing wear and tear/damage.
When the tenant moves out, you perform the same inspection. Any new damage you find is presumed to have been caused by them and the damages are paid for with the security deposit. Return the security deposit in full if you don't find any new damage.
How Much Are Security Deposits?
The most important thing for landlords to understand is California security deposit law. Governor Newsome signed a bill in 2023 limiting security deposit amounts to the equivalent of a single month's rent. Before this bill, it was suggested that landlords ask for the equivalent of 1-2 months' rent.
In returning the security deposit, you must do so within 21 days of the end of the tenancy. Putting security deposits into interest-bearing bank accounts is always a good idea to compensate for inflation.
If you're deducting anything, you must provide an itemized statement listing the deductions. It's good practice to keep receipts and proof of failed rent payments in case the tenant decides to fight your deductions
Landlords can officially make deductions for overdue rent, damage to the property, replacing furniture, and cleaning the unit. It's very important to have an understanding of the difference between normal wear and tear and actual tenant-caused property damage.
How Property Management Can Help
Now that you understand a bit more about security deposits and how to handle them, you'll be able to protect your property. Although they're a helpful tactic in combatting poor tenant behavior, dealing with security deposits can still be stressful, especially if you're forced to make deductions.
If you're overwhelmed by the process, hiring property management could help. At Provident Property Management, we can help you with tenant management and relations, including collecting security deposits for your San Jose rental. To learn more about our services, don't hesitate to contact us today.
