BILL ANALYSIS �
AB 1679
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1679 (Bonilla)
As Amended August 9, 2012
Majority vote
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|ASSEMBLY: |78-0 |(March 26, |SENATE: |39-0 |(August 20, |
| | |2012) | | |2012) |
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Original Committee Reference: JUD.
SUMMARY : Permits a landlord and tenant to mutually agree, as
specified, to have a security deposit returned to the tenant by
electronic transfer and to have any statement itemizing
deductions from the security deposit sent to the tenant by
electronic mail. Specifically, this bill :
1)Permits a landlord and tenant, after either has provided
notice to terminate the tenancy, to agree to have the landlord
deposit any remaining portion of a security deposit
electronically into an account designated by the tenant.
2)Permits a landlord and tenant, after either has provided a
notice to terminate the tenancy, to agree to have the landlord
send a copy of a required itemized statement, along with any
required related documents, to an e-mail account provided by
the tenant.
The Senate amendments incorporate changes proposed by AB 2521
(Blumenfield) for chaptering out purposes.
EXISTING LAW :
1)Regulates the purposes for which a renter's security deposit
may be used, including, but not limited to, compensating the
landlord for default on payment of rent, cleaning or repairing
rented property, exclusive of normal wear and tear, or
remedying future obligations under the rental agreement, as
specified.
2)Requires that 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
AB 1679
Page 2
inspection of the premises and to be present at the inspection
and specifies when and how the initial and any final
inspection shall be conducted.
3)Requires that no later than 21 days after the tenant vacates
the premise, but not earlier than the time that either the
landlord or the tenant provides a notice to terminate the
tenancy, or not earlier than 60 days prior to the expiration
of a fixed-lease term, the landlord shall furnish the tenant,
by personal delivery or by first-class mail, postage prepaid,
a copy of an itemized statement including 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.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version approved by the Senate.
FISCAL EFFECT : None
COMMENTS : Existing law regulates the use of security deposits
and requires a landlord to return any unused portion of the
security deposit to the tenant within 21 days after the tenant
has vacated the premises. In addition to refunding an
appropriate portion of the security deposit, the landlord must
provide the tenant with an itemized statement (along with any
receipts or other supporting documents) that indicates the basis
for the amount of security deposit returned. Existing law
specifies that the security deposit and itemized statement shall
be returned to the tenant by personal delivery or first-class
mail. Increasingly, however, many tenants and landlords prefer
to use electronic fund transfers to pay and receive rent;
therefore, it is not surprising that many would also prefer to
have security deposits returned in a similar fashion and to have
itemized statements returned by e-mail. Moreover, electronic
fund transfers and e-mails can eliminate delays, for example,
where the tenant does not provide a forwarding address.
Arguably a landlord and tenant could already mutually agree to
electronic deposit and delivery - and no doubt many do so - but
this bill would offer assurance to landlords that, if they use
electronic delivery, they will not be liable for failing to
comply with existing law.
This bill simply clarifies that a landlord or tenant may, if
they choose, mutually agree to the electronic deposit of any
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returned portion of the security deposit and, if they choose, to
have the required itemized statement and supporting documents
sent by e-mail. Neither the landlord nor the tenant would be
able to require this method of deposit or delivery unilaterally.
To this end, the bill was recently amended to specify that the
agreement, if any, must be made after either the landlord or
tenant has provided notice to terminate the tenancy. This will
ensure that such agreements do not become part of the lease or
rental agreement, which would effectively permit a landlord to
unilaterally require electronic delivery as a condition of the
lease.
According to the author, the "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)."
"Requiring landlords to return a tenant's security deposit
through a physical check," the author contends, "significantly
slows down that return. In addition, tenants often do not
provide a forwarding address in a timely manner, thereby further
delaying the return of their security deposit." The author
believes that this bill will "bring California in line with
modern technology" by allowing landlords and tenants to use that
technology when it is mutually beneficial and convenient to do
so.
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
FN: 0004767