BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1679| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1679 Author: Bonilla (D) Amended: 8/9/12 in Senate Vote: 21 SENATE JUDICIARY COMMITTEE : 4-0, 6/12/12 AYES: Evans, Harman, Corbett, Leno NO VOTE RECORDED: Blakeslee ASSEMBLY FLOOR : 78-0, 3/26/12 (Consent) - See last page for vote SUBJECT : Landlord-tenant relations: security deposits SOURCE : California Apartment Association DIGEST : This bill, after either a residential landlord or tenant provides notice to terminate the tenancy, allows the landlord and tenant to agree to (1) have the landlord deposit the remaining portion of a tenant's security deposit electronically to a bank account, and (2) have the landlord provide a copy of specified documents to an e-mail account provided by the tenant. Senate Floor Amendments of 8/9/12 address chaptering-out issues with AB 2521 (Blumenfield). NOTE: This bill passed the Senate (38-0) on 6/18/12 but was returned for these amendments. CONTINUED AB 1679 Page 2 ANALYSIS : Existing law generally regulates the landlord-tenant relationship, including the return of any security deposit provided by the tenant. (Civil Code (CIV) Section 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 Section 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 Section 1950.5) This bill, after either the landlord or tenant provides notice to terminate the tenancy, permits the landlord and tenant to agree to: 1. 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 2. Have the landlord provide a copy of the itemized statement along with the required copies of documents, as specified, to an e-mail account provided by the tenant. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 8/9/12) California Apartment Association (source) ARGUMENTS IN SUPPORT : According to the author, "Under CONTINUED AB 1679 Page 3 current law, rental property owners are required to return tenant security deposits within 21 days only through 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 tenantsÝand 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." ASSEMBLY FLOOR : 78-0, 3/26/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Gorell, Bonnie Lowenthal RJG:m 8/14/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED AB 1679 Page 4 CONTINUED