Rental agreements, whether for furnished or unfurnished homes, often include clauses related to the security deposit. These sums are essential to guarantee the interests of both the tenant and the landlord. However, there are specific regulations as to how they should be handled and what these contracts can and cannot stipulate regarding such deposits.

The Purpose and Protection of the Deposit

The law is clear: the security deposit is an amount held by the landlord for the benefit of the tenant that is part of the rental agreement (CC 1950.5 (d)).

• Without characterization of “Non-refundable”: It is crucial that no lease or rental agreement contain provisions characterizing any security deposit as “non-refundable” (CC 1950.5(m)).
• Deposit Use: While the deposit is primarily held as a protection for the landlord, its use is restricted. The landlord may retain portions of the security deposit to compensate for repairs, cleaning, and in case of breach of contract by the tenant (CC 1950.5(b)).

Limits Established on Deposit Amount

The amount that a landlord can require as a deposit varies depending on whether the property is furnished or not:

• Unfurnished properties: The landlord can request up to equivalent of two months rent as security deposit.
• Furnished properties: In this case, the deposit can be equivalent up to three months for rent.

It is important to note that these amounts are established in addition to the first month's rent paid at the beginning of occupancy (CC 1950.5 (c)).

Conclusion

The security deposit acts as a protection tool for both parties in a rental agreement. To ensure fair and transparent transactions, it is essential that both tenants and landlords are informed and understand their rights and responsibilities regarding these deposits.