State Senator Mark Leno has introduced legislation that encourages the proper return of tenant security deposits. Senate Bill 603 requires landlords to place deposits in a separate account, pay interest on those deposits to a tenant and pay penalties if a court determines they improperly withheld a deposit. “One the biggest complaints California’s 15 million renters voice when a lease ends is that they have little recourse in dealing with a landlord who refuses to return their deposits,” said Senator Leno, D-San Francisco. “At a time when deposits can be $5,000 or more, the failure to pay interest or properly return a security deposit can be a significant and unnecessary financial burden on many renters. SB 603 protects tenants in this situation by encouraging landlords to return security deposits in a timely manner, as required by law,” he said.

SB 603 is co-sponsored by Tenants Together, Western Center on Law and Poverty and California Rural Legal Assistance Foundation. According to a recent survey of Tenants Together members, 60% reported that some or all of their security deposits had been improperly withheld.

“It’s gotten so bad that many tenants paying their security deposits don’t ever expect to see that money again,” said Dean Preston, Executive Director of Tenants Together.

Security deposits are among the largest financial assets, and sometimes the only asset, that many tenants have. Deposits can be thousands of dollars, particularly in Senator Leno’s 11th Senate District that encompasses San Francisco.
“Landlords who hold tenants' money, sometimes for years, should be required to pay the renter interest,” said Brian Augusta, Legislative Advocate for Western Center on Law and Poverty. “This isn’t just a landlord-tenant issue. It’s about basic consumer protection.”
While many other states have tenant protection laws similar to what is proposed in SB 603, only a handful of jurisdictions in California require that tenants be paid interest on security deposits. SB 603 would require this practice across the state.

Tenants Together recently launched an educational website designed to inform tenants of their rights related to security deposits. The website, www.YourDeposit.org, is supported by 20 community organizations, including tenant groups, unions, civil rights organizations and consumer advocates.

SB 603 will be heard in the Senate Judiciary Committee this spring.

To reach Tenants Together, contact Dean Preston at (415) 495-8100, and to reach the Western Center on Law and Poverty, contact Brian Augusta at (916) 282-5103.