What Is a Security Deposit and How Does It Work? | A Guide for Riverside CA Renters
Resident FAQ: Understanding Your Security Deposit
Your Security Deposit Is Your Money, Held in Trust — Here’s How to Get All of It Back
The following is not intended as legal advice. Consult with an attorney or your local tenant rights organization for guidance on your specific situation.
By BRIAN BEAN
Rental Home Advocate | Property Manager | Real Estate Broker
Landlords and property managers typically require renters to pay a security deposit on a rental home. But what is it actually used for? And is it refundable?
A security deposit is not a fee. A security deposit is not rent. A security deposit is your money, held in trust in an actual bank account, for one purpose: to make sure that when you move out, all bills have been paid and the home is left in the same condition as when you moved in.
If you take care of the home, pay all balances due, and leave the home in the same condition as move-in (normal wear and tear excepted), the security deposit should be 100 percent refundable.
When Deductions Can Happen
Deductions occur if at move-out there is actual damage beyond normal wear and tear or financial amounts left unpaid. All security deposit deductions must be properly accounted for and documented, according to California law.
Where Your Deposit Is Held
At Dream Big Property Management, we store residents’ security deposits in a regulated, non-interest-bearing, fiduciary trust account, where it typically sits for the duration of a tenancy.
The Return Timeline
At the end of a tenancy, we disburse the deposit back to residents, less any deductions, with all required documentation, within 21 days of the home being returned to our control.
California law also regulates the maximum amount a security deposit can be. For the specifics on that, check out our companion FAQ on security deposit limits in California.
Cutting Through the Misinformation
Security deposits are a hotly debated topic online, and misinformation is prevalent.
The most important things to remember:
- A security deposit is the renter’s money, simply held in trust by a property manager or landlord.
- The entire deposit is 100 percent refundable unless there are outstanding bills or if the resident caused damage beyond normal wear and tear.
Property managers typically prefer to refund an entire security deposit to their residents because that usually means the home has been left in rentable condition and is quicker to be back on the market.
Have questions about security deposits? Reach us directly at 951-778-9700, or find valuable information on our website, dreambigpm.com.
About the Author
Brian Bean is the Broker and founder of Dream Big Property Management, serving residents and property owners across Riverside, Moreno Valley, Corona, and the greater Inland Empire. CA DRE #01346382.
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Full Transcript
Transcript of the video above — Brian Bean, Broker/Owner and Rental Home Advocate, Dream Big Property Management. CA DRE #01346382. Lightly edited for readability.
Security deposits. What is it and how does it work? Hi, I’m Brian Bean with Dream Big Property Management here in Riverside, California. Landlords and property managers typically require renters to pay a security deposit on a rental home. But what is it used for, and is it refundable?
Well, think of it this way. A security deposit is not a fee, and it’s not rent. It’s your money, held in trust in an actual bank account, for one purpose: to make sure that when you move out, all bills have been paid and the home will be left largely in the same condition as when you moved in. That’s it. If you take care of the home, if you pay what you owe, and you leave it in the same condition as move-in, normal wear and tear excepted, you get the full deposit back. It’s 100% refundable.
Deductions only happen if something specific needs to be covered when you move out — actual damage beyond normal wear and tear, or amounts still owed. When we do make a deduction from a deposit, California law requires that we account for and document it properly.
We store our residents’ security deposits in a regulated, non-interest-bearing fiduciary trust account, so your money stays exactly where it should be for as long as you’re with us. And at the end of a tenancy, we disburse the deposit back to renters, with any accounting for deductions, within 21 days of the home being returned to our control.
California law also regulates the amount of a security deposit. For details about that, check out our previous post in the FAQ section.
Security deposits are a hotly debated topic online. There is a lot of misinformation to be found. The most important thing to remember is that a security deposit is your money. It’s simply held in trust by a property manager or a landlord. The entire deposit is 100% refundable unless you owe back rent or expenses, or you cause damage beyond normal wear and tear. And the best property managers agree that it is a great day when they can refund an entire security deposit to the residents.
If you have questions about security deposits, rental applications, or anything related to finding a great home to lease, you can reach us at 951-778-9700. You can also find valuable information on our website, dreambigpm.com. Remember, it’s not just a house, it’s your home. And home is where you build a life.