Security- deposit rules specify how much landlords may keep

Q: I own rental property in California. My tenant broke a twoyear lease within two months of signing. He left the house without paying the rent. I called a real-estate agent, advertised the property and got it rented. Can I deduct the loss of rent and the amount I paid for the agent from the security deposit?

A: Most municipalities and states (including California) have rules pertaining to security deposits and leases. Because of your tenant’s bad behavior, you may be able to legally keep the entire deposit, or just a part of it.

You should first review the fine print of your lease. What does the document say happens to the security deposit in case of a default by the tenant? Then, you have to look at your state laws and local ordinances to figure out what applies.

Hiring an attorney familiar with local laws would be a good idea.

Most leases say that a landlord is entitled to recover his or her damages when a tenant breaks a lease. Those damages may include rent that went unpaid while you searched for a replacement tenant and commissions and other costs you spent to get that other tenant. Most leases allow a landlord to deduct those costs from the security deposit.

But this is where it gets tricky. Some state laws allow only certain items to be deducted from security deposits; some municipal ordinances require you to provide receipts and proof that you spent money before you can deduct those sums from the security deposit. Finally, some ordinances will penalize you if you fail to comply with the statutes, even when the tenant was at fault.

Not following the rules could cost you a pretty penny. For these reasons and depending on the amount of money involved, we think you should connect with a local attorney who is knowledgeable about all applicable laws.