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California Civil Code Section 1950.7

Legal Research Home > California Laws > Civil Code > California Civil Code Section 1950.7

1950.7.  (a) Any payment or deposit of money the primary function of
which is to secure the performance of a rental agreement for other
than residential property or any part of the agreement, other than a
payment or deposit, including an advance payment of rent, made to
secure the execution of a rental agreement, shall be governed by the
provisions of this section. With respect to residential property, the
provisions of Section 1950.5 shall prevail.
   (b) The payment or deposit of money shall be held by the landlord
for the tenant who is party to the agreement. The claim of a tenant
to the payment or deposit shall be prior to the claim of any creditor
of the landlord, except a trustee in bankruptcy.
   (c) The landlord may claim of the payment or deposit only those
amounts as are reasonably necessary to remedy tenant defaults in the
payment of rent, to repair damages to the premises caused by the
tenant, or to clean the premises upon termination of the tenancy, if
the payment or deposit is made for any or all of those specific
purposes.
   (1) If the claim of the landlord upon the payment or deposit is
only for defaults in the payment of rent and the security deposit
equals no more than one month's rent plus a deposit amount clearly
described as the payment of the last month's rent, then any remaining
portion of the payment or deposit shall be returned to the tenant at
a time as may be mutually agreed upon by landlord and tenant, but in
no event later than 30 days from the date the landlord receives
possession of the premises.
   (2) If the claim of the landlord upon the payment or deposit is
only for defaults in the payment of rent and the security deposit
exceeds the amount of one month's rent plus a deposit amount clearly
described as the payment of the last month's rent, then any remaining
portion of the payment or deposit in excess of an amount equal to
one month's rent shall be returned to the tenant no later than two
weeks after the date the landlord receives possession of the
premises, with the remainder to be returned or accounted for within
30 days from the date the landlord receives possession of the
premises.
   (3) If the claim of the landlord upon the payment or deposit
includes amounts reasonably necessary to repair damages to the
premises caused by the tenant or to clean the premises, then any
remaining portion of the payment or deposit shall be returned to the
tenant at a time as may be mutually agreed upon by landlord and
tenant, but in no event later than 30 days from the date the landlord
receives possession of the premises.
   (d) Upon termination of the landlord's interest in the unit in
question, 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 payment
or deposit:
   (1) Transfer the portion of the payment or deposit remaining after
any lawful deductions made under subdivision (c) to the landlord's
successor in interest, and thereafter notify the tenant by personal
delivery or certified mail of the transfer, of any claims made
against the payment or deposit, and of the transferee's name and
address. 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 payment or deposit remaining after
any lawful deductions made under subdivision (c) to the tenant.
   (e) Upon receipt of any portion of the payment or deposit under
paragraph (1) of subdivision (d), the transferee shall have all of
the rights and obligations of a landlord holding the payment or
deposit with respect to the payment or deposit.
   (f) The bad faith retention by a landlord or transferee of a
payment or deposit or any portion thereof, in violation of this
section, may subject the landlord or the transferee to damages not to
exceed two hundred dollars ($200), in addition to any actual
damages.
   (g) This section is declarative of existing law and therefore
operative as to all tenancies, leases, or rental agreements for other
than residential property created or renewed on or after January 1,
1971.
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Last modified: March 17, 2014