BILL NUMBER: AB 1679	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 15, 2012

INTRODUCED BY   Assembly Member Bonilla

                        FEBRUARY 14, 2012

   An act to amend Section 1950.5 of the Civil Code, relating to
landlord-tenant relations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1679, as amended, Bonilla. Landlord-tenant relations: security
deposits.
   Existing law requires that no later than 21 calendar days after
the tenant has vacated the premises, but not earlier than the time
that either the landlord or the tenant provides a notice to terminate
the tenancy, as specified, or not earlier than 60 calendar days
prior to the expiration of a fixed-term lease, the landlord 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 to return any remaining portion of the security to the
tenant. Existing law also requires that along with the itemized
statement, the landlord include copies of documents showing charges
incurred and deducted by the landlord to repair or clean the
premises, as specified.
   This bill would, in addition,  authorize  
provide that   after either the landlord or the tenant
provides notice to terminate the tenancy,  a landlord and tenant
 to   may  mutually agree to have the
landlord deposit any remaining portion of the security deposit
 directly   electronically  to a bank
account  or other financial institution  designated by the
tenant. The bill would also  authorize   provide
that   after either the landlord or the tenant provides
notice to terminate the tenancy,  the landlord and the tenant
 to   may  agree to have the landlord
provide a copy of the itemized statement along with the copies of
documents showing charges incurred and deducted by the landlord to
repair or clean the premises to an e-mail account provided by the
tenant.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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. The requirements of this subdivision
do not apply when the tenancy is terminated pursuant to subdivision
(2), (3), or (4) of Section 1161 of the Code of Civil Procedure. 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 
 cleanings  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 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) (1) No later than 21 calendar days after the tenant has
vacated the premises, but not earlier than the time that either the
landlord or the tenant provides a notice to terminate the tenancy
under Section 1946 or 1946.1, Section 1161 of the Code of Civil
Procedure, or not earlier than 60 calendar days prior to the
expiration of a fixed-term lease, 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.  The   After either the landlord
or the tenant provides notice to terminate the tenancy, the 
landlord and tenant may mutually agree to have the landlord deposit
any remaining portion of the security deposit  directly
  electronically  to a bank account  or other
financial institution  designated by the tenant.  The
  After either the landlord or the tenant provides
notice to terminate the tenancy, the  landlord and the tenant
may also agree to have the landlord provide a copy of the itemized
statement along with the copies required by paragraph (2) to an
e-mail account provided by the tenant.
   (2) Along with the itemized statement, the landlord shall also
include copies of documents showing charges incurred and deducted by
the landlord to repair or clean the premises, as follows:
   (A) If the landlord or landlord's employee did the work, the
itemized statement shall reasonably describe the work performed. The
itemized statement shall include the time spent and the reasonable
hourly rate charged.
   (B) If the landlord or landlord's employee did not do the work,
the landlord shall provide the tenant a copy of the bill, invoice, or
receipt supplied by the person or entity performing the work. The
itemized statement shall provide the tenant with the name, address,
and telephone number of the person or entity, if the bill, invoice,
or receipt does not include that information.
   (C) If a deduction is made for materials or supplies, the landlord
shall provide a copy of the bill, invoice, or receipt. If a
particular material or supply item is purchased by the landlord on an
ongoing basis, the landlord may document the cost of the item by
providing a copy of a bill, invoice, receipt, vendor price list, or
other vendor document that reasonably documents the cost of the item
used in the repair or cleaning of the unit.
   (3) If a repair to be done by the landlord or the landlord's
employee cannot reasonably be completed within 21 calendar days after
the tenant has vacated the premises, or if the documents from a
person or entity providing services, materials, or supplies are not
in the landlord's possession within 21 calendar days after the tenant
has vacated the premises, the landlord may deduct the amount of a
good faith estimate of the charges that will be incurred and provide
that estimate with the itemized statement. If the reason for the
estimate is because the documents from a person or entity providing
services, materials, or supplies are not in the landlord's
possession, the itemized statement shall include the name, address,
and telephone number of the person or entity. Within 14 calendar days
of completing the repair or receiving the documentation, the
landlord shall complete the requirements in paragraphs (1) and (2) in
the manner specified.
   (4) The landlord need not comply with paragraph (2) or (3) if
either of the following apply:
   (A) The deductions for repairs and cleaning together do not exceed
one hundred twenty-five dollars ($125).
   (B) The tenant waived the rights specified in paragraphs (2) and
(3). The waiver shall only be effective if it is signed by the tenant
at the same time or after a notice to terminate a tenancy under
Section 1946 or 1946.1 has been given, a notice under Section 1161 of
the Code of Civil Procedure has been given, or no earlier than 60
calendar days prior to the expiration of a fixed-term lease. The
waiver shall substantially include the text of paragraph (2).
   (5) Notwithstanding paragraph (4), the landlord shall comply with
paragraphs (2) and (3) when a tenant makes a request for
documentation within 14 calendar days after receiving the itemized
statement specified in paragraph (1). The landlord shall comply
within 14 calendar days after receiving the request from the tenant.
   (6) Any mailings to the tenant pursuant to this subdivision shall
be sent to the address provided by the tenant. If the tenant does not
provide an address, mailings pursuant to this subdivision shall be
sent to the unit that has been vacated.
   (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   addresse 
 s  , and their telephone  number  
numbers  . 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 that 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
or 116.221 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.
   (q) The amendments to this section made during the 2003 portion of
the 2003-04 Regular Session of the Legislature that are set forth in
paragraph (1) of subdivision (f) are declaratory of existing law.