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21-day failure to return deposit/provide accounting; what's my "bad faith" exposure?
Anonymous6 views2 answers
We failed to return a security deposit and perform an accounting within 21 days. It is now day #24.
Security deposit is $1500, back rent owed by tenant $1000. Tenant is demanding $1500 because of our 21-day failure. I'm sure this is as common as dirt, and our only excuse: we're very new at this.
Two questions:
1) if we let them sue, is the likely outcome them winning $1500, and us winning $1000 in the counterclaim?
2) what are the risks of a "bad faith" penalty in San Diego County? We were responsive, but several days late in sending the itemized list (via email).
Based on your small claims experience, how much exposure do we have from a "bad faith" penalty? Their settlement offer is $1500. Settle, or roll the dice?
Happy to call one of you, but I'm overseas right now...
I suggest that you send the tenant the $1,500. Your $1,000 in deductions is not worth the hassle. As required by California Civil Code section 1950.5: within 21 days of a residential tenant moving out of the premises, the landlord must send the tenant: (1) the balance of the security deposit; (2) an itemized statement of any deductions from the security deposit; and (3) copies of receipts for the deductions. If the landlord does not comply with these requirements, the tenant can write a demand letter for refund of the security deposit. If the landlord still does not return the security deposit, then the tenant can sue in small claims court for the security deposit plus penalties of up to two times the amount of the security deposit.
Mr Price is right. Your tenant has probably written on other side of question.
On the other hand, you could try writing/calling tenant and tell him you'll be sending back $750 immediately. Admit mistake and offer to compromise about what's owed. If he objects, send full amount. Google CA Tenant Handbook and do better next time.
