Landlords are still required to provide an itemization of deductions made to the security deposit to their former tenants within 21 days after the tenant vacates. Even with all of the COVID moratorium laws and rent deferments, landlords’ obligations to provide itemizations have not been waived. In fact, in February 2021, the State Legislature enacted new laws regarding the application of security deposits to satisfy COVID-19 Rental Debt. The state also enacted new laws regarding the application of tenants’ rent payments.
Law Allows Owners to Apply Security Deposit Toward Rental Debt When a Tenancy Ends
During a tenancy, a landlord cannot apply a security deposit to satisfy COVID-19 rental debt, unless the tenant has agreed, in writing, to allow the deposit to be so applied.
However, this new law does not prohibit a landlord from applying a security deposit to satisfy COVID-19 rental debt AFTER the tenancy ends, in accordance with Section 1950.5 of the Civil Code.
This means that after the tenant vacates, a landlord can deduct COVID rental debt from the security deposit along with unusual wear and tear and reasonable cleaning. However, pursuant to this new law, a landlord cannot use the security deposit to satisfy COVID-19 rental debt DURING the tenancy.
Payment Toward Current Rent
Additionally, the landlord shall not apply a monthly rental payment to any COVID-19 rental debt other than the prospective month’s rent, unless the tenant has agreed, in writing, to allow the payment to be so applied. Standard accounting principles would indicate that you would normally apply payments to the oldest balance. However, this new law states that if your tenant owes you past due rent and makes a payment, that payment can only be applied towards the current rent. This could be an accounting nightmare when the tenant makes multiple payments but does not designate how the payment should be applied!!
Dennis Block, of Dennis P. Block & Associates can be reached for information on landlord/tenant law or evictions at any of the following offices: Los Angeles: 323.938.2868, Encino: 818.986.3147, Inglewood: 310.673.2996, Long Beach: 310.434.5000, Ventura: 805.653.7264, Pasadena: 626.798.1014, Orange: 714.634.8232, San Diego: 619.481.5423 or by visiting www.evict123.com. Now, you can also read Dennis Block on Twitter, www.twitter.com/dennisblock or text him at (818) 570-1557. “Landlord Tenant Radio Weekly Podcasts can be heard at any time at www.EVICT123.com or download the app “EVICT123”.