From the President
by Eric Andresen
With the arrival of the New Year, we must now cope with new laws and regulations. One of these compels us to learn different routines and procedures in order to meet the new requirements. I am speaking of Senator Tom Torlakson’s Security Deposit Disclosure Law—Senate Bill 90
This legislation requires that at any time we deduct more than $125 from a security deposit, we must provide detailed receipts to justify each related cost. For example, if you need to completely clean the apartment at a cost of $250, you would obviously deduct this from the deposit and itemize it on a disposition of deposit notice. Now, in addition, copies of related invoices must also accompany the disposition.
What if you don’t have the receipt(s)? The new law allows you to specifically itemize the expected costs, as long as you also provide the name, address and telephone number of the contractor or entity that has been hired to do the work. Then, once the invoice is received, you must send a copy to the vacated tenant within 14 days.
There are two specific provisions that would waive the requirement for you to produce these documents. Obviously one occurs when the total deduction for repairs or cleaning does not exceed $125. The other provision occurs if the tenant signs a waiver at the time of, or later than, the date the notice of termination is delivered from one party to the other. In other words, as a landlord, you can’t encourage a tenant to waive his or her right to receipts by including a clause in the lease. However, you can put such language into a prepared notice to terminate, or on the Pre-Move-Out Inspection form or even on a detailed disposition of Security Deposit form.
However, neither the expense cap nor the waiver completely removes the document production requirement. You must still provide the documents if the tenant requests them, within 14 calendar days of receipt of the itemized statement.
There are a couple of good provisions that Senator Torlakson built into the new law at our industry’s request. One is that an owner can now legally bill for his or her own time spent on the cleaning and/or repairs of the apartment. Prior to this law, the deduction could have been thrown out in the local courts. Now it’s legal. However, the length of time and the costs must be reasonable and must sufficiently describe the exact work performed.
The other provision is to allow billing for items that have been warehoused by a property owner. For example, many of us will purchase several light switches or toilet seats or even paint in bulk, which would mean there is not a specific invoice for the individual item. However, as long as a copy of the original invoice is attached indicating the cost of each item, then we can demand reimbursement of the expense.
The whole process sounds more difficult than it is, but the folks up at the California Apartment Association (CAA) have been working overtime creating new forms and advice papers to help rental property owners out. All of this information is now available at the “What’s New” section of CAA’s Web site (www.caanet.org). Also listed on the CAA site are other updated forms that have been rewritten for new 2004 requirements.
The San Francisco Apartment Association is offering seminars taught by SFAA members Dave Wasserman, Jeffery Woo, and others on how to handle the new laws and regulations. Keep your eyes open for seminar announcements and make sure you sign up for one of these invaluable courses.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the San Francisco Apartment Magazine. In addition to serving as the current President of the SFAA, Eric is also the Vice President of Political Affairs for the PPMA and is the original author of the PPMA Residential Tenancy Agreement. Mr. Andresen will serve as the Vice President of the California Apartment Association in 2004 and he is extensively involved in other industry organizations here in San Francisco and at the state level. He owns and operates West Coast Property Management and West Coast Property Maintenance Companies. copyright©2004