BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 1679 (Bonilla)
As Amended March 15, 2012
Hearing Date: June 12, 2012
Fiscal: No
Urgency: No
BCP
SUBJECT
Landlord-Tenant Relations: Security Deposits
DESCRIPTION
This bill would, after either a residential landlord or tenant
provides notice to terminate the tenancy, allow the landlord and
tenant to agree to:
have the landlord deposit the remaining portion of a tenant's
security deposit electronically to a bank account; and
have the landlord provide a copy of specified documents to an
email account provided by the tenant.
BACKGROUND
California law regulates various aspects of the relationship
between residential landlords and tenants, including the
collection and return of the security deposit. Those deposits
cannot be greater than two months' rent for unfurnished
properties, or three months' rent for furnished residential
properties. Landlords are only allowed to claim amounts from
the security that are reasonably necessary for specified
purposes (such as repairing damages exclusive of ordinary wear
and tear), and must return any remaining portion of the deposit
within 21 days after the tenant has vacated the premises. The
Department of Consumer Affairs has previously noted that "İt]he
most common disagreement between landlords and tenants is over
the refund of the tenant's security deposit after the tenant has
moved out of the rental unit."
This bill seeks to facilitate the return of those security
deposits by permitting the landlord and tenant to agree for the
(more)
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remaining portion to be deposited electronically in the tenant's
bank account, and for the tenant to receive the required
itemized statement of charges (and copies of receipts) by email.
CHANGES TO EXISTING LAW
Existing law generally regulates the landlord-tenant
relationship, including the return of any security deposit
provided by the tenant. (Civ. Code Sec. 1940 et seq.)
Existing law limits the amount of security deposit that may be
required by a landlord and permits the landlord to only claim
amounts from that deposit which are reasonably necessary for
specified purposes. Those purposes include compensating for a
tenant's default in payment of rent, repair of damages to the
premises (exclusive of ordinary wear and tear), and cleaning the
premises, as specified. (Civ. Code Sec. 1950.5.)
Existing law provides that no later than 21 calendar days after
the tenant has vacated the premises, as specified, the landlord
shall furnish the tenant with 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. (Civ. Code
Sec. 1950.5.)
This bill would, after either the landlord or tenant provides
notice to terminate the tenancy, permit the landlord and tenant
to agree to:
have the landlord deposit any remaining portion of the
security deposit electronically to a bank account or other
financial institution designated by the tenant; and
have the landlord provide a copy of the itemized statement
along with the required copies of documents, as specified, to
an email account provided by the tenant.
COMMENT
1. Stated need for the bill
According to the author:
Under current law, rental property owners are required to
return tenant security deposits within 21 days only through
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a physical check delivered personally or by first-class
mail. This requirement to return a security deposit by a
physical check was first placed in statute decades ago, long
before the advent of modern technology, electronic fund
transfer options, and email. Today, more tenants are asking
that rental property owners return any remaining security
deposit directly into their bank account. This request is
consistent with the way in which many tenants already chose
to pay their rent - through an electronic fund transfer
(EFT). . . .
The author further notes that by allowing security deposits to
be deposited electronically into a bank account, "AB 1679 will
benefit both property owners and tenantsİand o]wners will be
able to provide a service for those tenants who seek it, while
speeding up the process for returning the tenant's deposit."
2. Electronic deposit and notification only upon agreement
Under existing law, a residential landlord must return any
remaining portion of a tenant's security deposit within 21
calendar days after the tenant has vacated the premises. That
amount must be returned by either personal delivery or
first-class mail along with an itemized statement of any
security used by the landlord and copies of documents showing
charges incurred or deducted to repair or clean the premises.
This bill, sponsored by the California Apartment Association
(CAA), would allow the landlord and tenant to agree to have the
landlord deposit any remaining portion of the deposit into a
bank account designated by the tenant, and, allow the tenant to
receive the itemized statement and receipts by email. CAA
notes:
Today, more tenants are asking that rental property owners
return any remaining security deposit directly into their
own bank account. AB 1679 offers an entirely voluntary
option for tenants. It allows owners the ability to provide
a service for those tenants who seek it, thereby speeding up
the process for return of the deposit.
It is important to note that receiving the funds and documents
electronically is completely voluntary, and that the decision
regarding that receipt would be made after either the landlord
or tenant provides notice to terminate the tenancy.
a. Voluntary
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As noted above, both the landlord and tenant must agree to
electronic deposit and email delivery of the required
documents. If the tenant (or landlord) does not desire to use
the electronic options authorized by this bill, the balance of
the deposit and required documents must be sent either by
personal delivery or first-class mail. The retention of
traditional methods of returning the security deposit is
especially important for those individuals who may not have
access to an email account, do not have a bank account, or for
landlords who similarly do not have the means to
electronically transfer the money and documents.
b. Timing of agreement
This bill would specify that any agreement between the
landlord and tenant to receive the deposit electronically
must occur "İa]fter either the landlord or tenant provides
notice to terminate the tenancy . . ." The timing of that
agreement is important to help ensure that the tenant is
fully aware that he or she has agreed to electronic deposit
and delivery, and, provided an accurate bank account and
email address. It also would allow the tenant to make the
decision at a time when he or she will likely know whether
or not email access will be available after moving out of
the home or apartment.
Support : None Known
Opposition : None Known
HISTORY
Source : California Apartment Association
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Floor (Ayes 78, Noes 0)
Assembly Judiciary Committee (Ayes 8, Noes 0)
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