BILL NUMBER: AB 2330	CHAPTERED  09/29/02

	CHAPTER  1061
	FILED WITH SECRETARY OF STATE  SEPTEMBER 29, 2002
	APPROVED BY GOVERNOR  SEPTEMBER 29, 2002
	PASSED THE ASSEMBLY  AUGUST 22, 2002
	PASSED THE SENATE  AUGUST 20, 2002
	AMENDED IN SENATE  AUGUST 14, 2002
	AMENDED IN SENATE  AUGUST 6, 2002
	AMENDED IN ASSEMBLY  MAY 21, 2002
	AMENDED IN ASSEMBLY  MAY 1, 2002

INTRODUCED BY   Assembly Member Migden

                        FEBRUARY 21, 2002

   An act to amend Sections 1950.5 and 1954 of the Civil Code,
relating to landlord and tenant.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2330, Migden.  Landlord and tenant.
   (1) Existing law regulates the amount of security a landlord may
demand or receive pursuant to a rental agreement for residential
property to be used as a dwelling.  It limits that amount to 2 months'
rent for unfurnished residential property, and to 3 months' rent for
furnished residential property, in addition to rent for the first
month, as specified.  Existing law defines security for these
purposes.  Existing law permits landlords to apply security only if
reasonably necessary for specified purposes, and prohibits the
application of security for defective conditions that preexisted the
tenancy or for ordinary wear and tear.  Existing law requires a
landlord to furnish to the tenant, within 3 weeks of vacating the
premises, a copy of an itemized statement indicating the security
received and the disposition of the security, as specified.
   This bill would redefine security to include any charges imposed
at the beginning of tenancy, excepting application screening fees,
and would specifically include within the definition costs associated
with processing a new tenant and costs associated with cleaning the
property, as specified.  The bill would require the landlord under
specified circumstances to notify the tenant in writing of the tenant'
s option to request an initial inspection and the tenant's right to
be present at the inspection.  If the tenant requests an initial
inspection, the bill would require the landlord to make that
inspection prior to a final inspection, after the tenant vacates, and
to provide the tenant with an itemized list of potential deductions
from the security, as specified.  The bill would require that the
tenant have the opportunity to remedy identified deficiencies, as
specified, during the period following the initial inspection until
the end of the tenancy.  The bill would change the amount of
statutory damages for certain violations from $600 to twice the
amount of the security.
   (2) Existing law regulates the times and circumstances under which
a landlord may enter a tenant's dwelling.
   This bill would permit a landlord to enter a tenant's dwelling for
the purpose of making an inspection related to the application of a
tenant's security to repairs and cleaning.
   (3) This bill would incorporate changes to Section 1954 of the
Civil Code made by SB 1403 to become operative only if both bills are
chaptered and this bill is chaptered last.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1950.5 of the Civil Code is amended to read:
   1950.5.  (a) This section applies to security for a rental
agreement for residential property that is used as the dwelling of
the tenant.
   (b) As used in this section, "security" means any payment, fee,
deposit or charge, including, but not limited to, any payment, fee,
deposit, or charge, except as provided in Section 1950.6, that is
imposed at the beginning of the tenancy to be used to reimburse the
landlord for costs associated with processing a new tenant or that is
imposed as an advance payment of rent, used or to be used for any
purpose, including, but not limited to, any of the following:
   (1) The compensation of a landlord for a tenant's default in the
payment of rent.
   (2) The repair of damages to the premises, exclusive of ordinary
wear and tear, caused by the tenant or by a guest or licensee of the
tenant.
   (3) The cleaning of the premises upon termination of the tenancy
necessary to return the unit to the same level of cleanliness it was
in at the inception of the tenancy.  The amendments to this paragraph
enacted by the act adding this sentence shall apply only to
tenancies for which the tenant's right to occupy begins after January
1, 2003.
   (4) To remedy future defaults by the tenant in any obligation
under the rental agreement to restore, replace, or return personal
property or appurtenances, exclusive of ordinary wear and tear, if
the security deposit is authorized to be applied thereto by the
rental agreement.
   (c) A landlord may not demand or receive security, however
denominated, in an amount or value in excess of an amount equal to
two months' rent, in the case of unfurnished residential property,
and an amount equal to three months' rent, in the case of furnished
residential property, in addition to any rent for the first month
paid on or before initial occupancy.
   This subdivision does not prohibit an advance payment of not less
than six months' rent if the term of the lease is six months or
longer.
   This subdivision does not preclude a landlord and a tenant from
entering into a mutual agreement for the landlord, at the request of
the tenant and for a specified fee or charge, to make structural,
decorative, furnishing, or other similar alterations, if the
alterations are other than cleaning or repairing for which the
landlord may charge the previous tenant as provided by subdivision
(e).
   (d) Any security shall be held by the landlord for the tenant who
is party to the lease or agreement.  The claim of a tenant to the
security shall be prior to the claim of any creditor of the landlord.

   (e) The landlord may claim of the security only those amounts as
are reasonably necessary for the purposes specified in subdivision
(b).  The landlord may not assert a claim against the tenant or the
security for damages to the premises or any defective conditions that
preexisted the tenancy, for ordinary wear and tear or the effects
thereof, whether the wear and tear preexisted the tenancy or occurred
during the tenancy, or for the cumulative effects of ordinary wear
and tear occurring during any one or more tenancies.
   (f) (1) Within a reasonable time after notification of either
party's intention to terminate the tenancy, or before the end of the
lease term, the landlord shall notify the tenant in writing of his or
her option to request an initial inspection and of his or her right
to be present at the inspection.  At a reasonable time, but no
earlier than two weeks before the termination or the end of lease
date, the landlord, or an agent of the landlord, shall, upon the
request of the tenant, make an initial inspection of the premises
prior to any final inspection the landlord makes after the tenant has
vacated the premises.  The purpose of the initial inspection shall
be to allow the tenant an opportunity to remedy identified
deficiencies, in a manner consistent with the rights and obligations
of the parties under the rental agreement, in order to avoid
deductions from the security.  If a tenant chooses not to request an
initial inspection, the duties of the landlord under this subdivision
are discharged.  If an inspection is requested, the parties shall
attempt to schedule the inspection at a mutually acceptable date and
time.  The landlord shall give at least 48 hours prior written notice
of the date and time of the inspection if either a mutual time is
agreed upon, or if a mutually agreed time cannot be scheduled but the
tenant still wishes an inspection.  The tenant and landlord may
agree to forgo the 48-hour prior written notice by both signing a
written waiver.  The landlord shall proceed with the inspection
whether the tenant is present or not, unless the tenant previously
withdrew his or her request for the inspection.
   (2) Based on the inspection, the landlord shall give the tenant an
itemized statement specifying repairs or cleaning that are proposed
to be the basis of any deductions from the security the landlord
intends to make pursuant to paragraphs (1) to (4), inclusive of
subdivision (b).  This statement shall also include the texts of
subdivision (d) and paragraphs (1) to (4), inclusive, of subdivision
(b).  The statement shall be given to the tenant, if the tenant is
present for the inspection, or shall be left inside the premises.
   (3) The tenant shall have the opportunity during the period
following the initial inspection until termination of the tenancy to
remedy identified deficiencies, in a manner consistent with the
rights and obligations of the parties under the rental agreement, in
order to avoid deductions from the security.
   (4) Nothing in this subdivision shall prevent a landlord from
using the security for deductions itemized in the statement provided
for in paragraph (2) that were not cured by the tenant so long as the
deductions are for damages authorized by this section.
   (5) Nothing in this subdivision shall prevent a landlord from
using the security for any purpose specified in paragraphs (1) to
(4), inclusive, of subdivision (b) that occurs between completion of
the initial inspection and termination of the tenancy or was not
identified during the initial inspection due to the presence of a
tenant's possessions.
   (g) Within three weeks after the tenant has vacated the premises,
the landlord shall furnish the tenant, by personal delivery or by
first-class mail, postage prepaid, a copy of an itemized statement
indicating the basis for, and the amount of, any security received
and the disposition of the security and shall return any remaining
portion of the security to the tenant.
   (h) Upon termination of the landlord's interest in the premises,
whether by sale, assignment, death, appointment of receiver or
otherwise, the landlord or the landlord's agent shall, within a
reasonable time, do one of the following acts, either of which shall
relieve the landlord of further liability with respect to the
security held:
   (1) Transfer the portion of the security remaining after any
lawful deductions made under subdivision (e) to the landlord's
successor in interest.  The landlord shall thereafter notify the
tenant by personal delivery or by first-class mail, postage prepaid,
of the transfer, of any claims made against the security, of the
amount of the security deposited, and of the names of the successors
in interest, their address, and their telephone number.  If the
notice to the tenant is made by personal delivery, the tenant shall
acknowledge receipt of the notice and sign his or her name on the
landlord's copy of the notice.
   (2) Return the portion of the security remaining after any lawful
deductions made under subdivision (e) to the tenant, together with an
accounting as provided in subdivision (g).
   (i) Prior to the voluntary transfer of a landlord's interest in
the premises, the landlord shall deliver to the landlord's successor
in interest a written statement indicating the following:
   (1) The security remaining after any lawful deductions are made.
   (2) An itemization of any lawful deductions from any security
received.
   (3) His or her election under paragraph (1) or (2) of subdivision
(h).
   This subdivision does not affect the validity of title to the real
property transferred in violation of this subdivision.
   (j) In the event of noncompliance with subdivision (h), the
landlord's successors in interest shall be jointly and severally
liable with the landlord for repayment of the security, or that
portion thereof to which the tenant is entitled, when and as provided
in subdivisions (e) and (g).  A successor in interest of a landlord
may not require the tenant to post any security to replace that
amount not transferred to the tenant or successors in interest as
provided in subdivision (h), unless and until the successor in
interest first makes restitution of the initial security as provided
in paragraph (2) of subdivision (h) or provides the tenant with an
accounting as provided in subdivision (g).
   This subdivision does not preclude a successor in interest from
recovering from the tenant compensatory damages that are in excess of
the security received from the landlord previously paid by the
tenant to the landlord.
   Notwithstanding this subdivision, if, upon inquiry and reasonable
investigation, a landlord's successor in interest has a good faith
belief that the lawfully remaining security deposit is transferred to
him or her or returned to the tenant pursuant to subdivision (h), he
or she is not liable for damages as provided in subdivision (l), or
any security not transferred pursuant to subdivision (h).
   (k) Upon receipt of any portion of the security under paragraph
(1) of subdivision (h), the landlord's successors in interest shall
have all of the rights and obligations of a landlord holding the
security with respect to the security.
   (l) The bad faith claim or retention by a landlord or the landlord'
s successors in interest of the security or any portion thereof in
violation of this section, or the bad faith demand of replacement
security in violation of subdivision (j), may subject the landlord or
the landlord's successors in interest to statutory damages of up to
twice the amount of the security, in addition to actual damages.  The
court may award damages for bad faith whenever the facts warrant
such an award, regardless of whether the injured party has
specifically requested relief.  In any action under this section, the
landlord or the landlord's successors in interest shall have the
burden of proof as to the reasonableness of the amounts claimed or
the authority pursuant to this section to demand additional security
deposits.
   (m) No lease or rental agreement may contain any provision
characterizing any security as "nonrefundable."
   (n) Any action under this section may be maintained in small
claims court if the damages claimed, whether actual or statutory or
both, are within the jurisdictional amount allowed by Section 116.220
of the Code of Civil Procedure.
   (o) Proof of the existence of and the amount of a security deposit
may be established by any credible evidence, including, but not
limited to, a canceled check, a receipt, a lease indicating the
requirement of a deposit as well as the amount, prior consistent
statements or actions of the landlord or tenant, or a statement under
penalty of perjury that satisfies the credibility requirements set
forth in Section 780 of the Evidence Code.
   (p) The amendments to this section made during the 1985 portion of
the 1985-86 Regular Session of the Legislature that are set forth in
subdivision (e) are declaratory of existing law.
  SEC. 2.  Section 1954 of the Civil Code is amended to read:
   1954.  A landlord may enter the dwelling unit only in the
following cases:
   (a) In case of emergency.
   (b) To make necessary or agreed repairs, decorations, alterations
or improvements, supply necessary or agreed services, or exhibit the
dwelling unit to prospective or actual purchasers, mortgagees,
tenants, workmen or contractors or to make an inspection pursuant to
subdivision (f) of Section 1950.5.
   (c) When the tenant has abandoned or surrendered the premises.
   (d) Pursuant to court order.
   Except in cases of emergency or when the tenant has abandoned or
surrendered the premises, entry may not be made during other than
normal business hours, unless the tenant consents at the time of
entry.
   The landlord shall not abuse the right of access or use it to
harass the tenant.  Except in cases of emergency, when the tenant has
abandoned or surrendered the premises, or if it is impracticable to
do so, the landlord shall give the tenant reasonable notice of his or
her intent to enter and enter only during normal business hours.
Twenty-four hours advanced notice shall be presumed to be reasonable
notice in absence of evidence to the contrary.
  SEC. 2.5.  Section 1954 of the Civil Code is amended to read:
   1954.  A landlord may enter the dwelling unit only in the
following cases:
   (a) In case of emergency.
   (b) To make necessary or agreed repairs, decorations, alterations
or improvements, supply necessary or agreed services, or exhibit the
dwelling unit to prospective or actual purchasers, mortgagees,
tenants, workmen or contractors or to make an inspection pursuant to
subdivision (f) of Section 1950.5.
   (c) When the tenant has abandoned or surrendered the premises.
   (d) Pursuant to court order.
   Except in cases of emergency or when the tenant has abandoned or
surrendered the premises, entry may not be made during other than
normal business hours unless the tenant consents at the time of
entry.
   The landlord shall not abuse the right of access or use it to
harass the tenant.  Except in cases of emergency or when the tenant
has abandoned or surrendered the premises, the landlord shall give
the tenant reasonable notice in writing of his or her intent to enter
and enter only during normal business hours.  The notice may be
personally delivered to the tenant, left with someone of a suitable
age and discretion at the premises, or, left on, near, or under the
usual entry door of the premises in a manner in which a reasonable
person would discover the notice.  Twenty-four hours shall be
presumed to be reasonable notice in absence of evidence to the
contrary.  The notice may be mailed to the tenant.  Mailing of the
notice at least six days prior to an intended entry is presumed
reasonable notice in the absence of evidence to the contrary.
   If the purpose of the entry is to exhibit the dwelling unit to
prospective or actual purchasers, the notice may be given orally, in
person or by telephone, if the landlord or his or her agent has
notified the tenant in writing within 120 days of the oral notice
that the property is for sale and that the landlord or agent may
contact the tenant orally for the purpose described above.
Twenty-four hours is presumed reasonable notice in the absence of
evidence to the contrary.  At the time of entry, the landlord or
agent shall leave written evidence of the entry inside the unit.
  SEC. 3.  Section 2.5 of this bill incorporates amendments to
Section 1954 of the Civil Code proposed by both this bill and SB
1403.  It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 2003, (2) each bill
amends Section 1954 of the Civil Code, and (3) this bill is enacted
after SB 1403, in which case Section 2 of this bill shall not become
operative.