SDCAA White Paper: Initial Pre Move-Out Inspections April 2015 SUMMARY An "initial inspection" gives the tenant, before the end of their tenancy or lease, an opportunity to repair defects or clean areas identified during the inspection to avoid deductions from the tenant's security deposit under Civil Code section 1950.5. Informing the Tenant about Initial Inspections The property owner or manager must inform the tenant in writing that they have the right to an initial inspection (Form 445 Notice of Resident’s Right to Request Pre Move-Out Inspection). The landlord must present the initial inspection notice to the tenant within a "reasonable time," and the pre-move out inspection should be scheduled no earlier than two weeks before the termination or the end of lease date, either after the landlord or the tenant has given the other party a written notice of intent to terminate the tenancy or the lease. The purpose of the initial Pre-Move Out inspection is to allow the tenant an opportunity to remedy identified deficiencies in a manner consistent with the rights and obligations under the rental agreement, and to avoid deductions from the tenant’s security deposit. The landlord is not obligated to perform the inspection if the tenant does not request an initial inspection. The owner or manager also is not required to perform an initial inspection if the tenant was served a three-day eviction notice. Scheduling the Inspection If the tenant asks for the inspection, the owner or manager should schedule it at a time that is reasonable for the tenant generally during normal business hours. The inspection cannot be scheduled earlier than two weeks prior to the end of the tenancy or lease term. The inspection should be scheduled to grant the tenant enough time to perform repairs or do cleaning identified during the initial inspection. The landlord also must give the tenant at least 48 hours in advance, a written notice listing the inspection’s date and time regardless if both parties agreed on a date and time for the inspection. However, the landlord is not required to give the 48-hour notice to the tenant if the parties cannot agree on a date and time, the tenant no longer wants the inspection, or the landlord and tenant have agreed in writing to waive the 48-hour notice requirement. The landlord can proceed with the initial inspection if the tenant is absent, unless the tenant decides to withdraw their request for the inspection. Move-In/Move-Out Inspection Report & Security Deposit Statute After the initial pre move-out inspection, the owner or manager must provide the tenant with a Move-In/Move-Out Inspection Report (Form 272) that specifies the repairs or cleaning needed that will be the basis for any deductions to the security deposit – the tenant must be informed that the itemized statement is not a final accounting of deductions taken from the security deposit. The landlord or agent also must provide the tenant a copy of California's security deposit statute which provides a list of lawful uses of tenants' security deposits. Form 272 contains the required language regarding the disposition of the security deposit. Civil Code section 1950.5 limits the type of repairs or cleaning that the landlord or agent may include in the itemized inspection report. The statute prohibits the owner or agent from using the tenant's security deposit to repair damages or correct defects that were already present in the rental before the tenant moved in or that are the result of ordinary wear and tear - The landlord cannot use the tenant's deposit for prior damages or for ordinary wear and tear or list them in the itemized statement. Wear and Tear is considered degradation of an item due to normal use and exposure, for example, faded interior paint due to prolonged exposure to sunlight or worn carpet as a result of years of foot traffic.i The tenant may make the corrections during the period following the inspection through the termination of the tenancy in order to avoid deductions from the security deposit. Yet, the tenant may not modify or make repairs to the unit that are not allowable under the terms of the rental or lease agreement. Before the end of tenancy or lease, the tenant has the option to perform the repairs or cleaning listed in order to avoid deductions from the deposit as allowed in the rental agreement. However, the tenant cannot be required to repair defects or do cleaning if the tenant's security deposit could not be used to pay for repairs or cleaning. Final Inspection The landlord or agent may perform a final inspection after the tenant has moved out of the rental. The landlord may deduct from the tenant's security deposit to repair a defect or correct a condition: That was identified in the inspection statement and that the tenant did not repair or correct That occurred after the initial inspection That was not identified during the initial inspection due to the presence of the tenant's possessions Any deduction must be reasonable in amount, and must be for a purpose permitted by the security deposit statute.ii Security Deposit Disposition Within 21 days after the tenant returned possession of the unit to the owner or Agent, the tenant needs to be provided with either an estimated accounting of the security deposit or a final accounting of the security deposit, (Form 610), indicating the damage or cleaning and the amount deducted from the tenant’s security deposit, if any. If the Owner or Agent provides and estimated accounting, the Owner/ Agent must provide a final accounting disposition of the security deposit within 14 calendar days of completing the repair or receiving documentation from the service provider. In the event that documentation is not available from the vendor or service provider, the Owner Agent must supply the name, address and contact information for the provider. The Owner or Agent need not include copies of charges for repairs or cleaning if the total cost of these does not exceed $125 or the tenant waived their right to receive and itemized statement. Mailing of the Security Deposit Disposition should be sent to the address provided by the tenant to the Owner or Agent. In the event that a forwarding address is not provided, the disposition should be sent to the last known address. For the form on initial inspections, click on Form 445 – Notice of Resident’s Right to Request Pre Move-Out Inspection and Form 272 Move In/Move Out Inspection. To access these and all other SDCAA forms, please visit www.sdcaa.com. For more information regarding refunds of security deposits, please visit the California Department of Consumer Affairs at: http://www.dca.ca.gov/publications/landlordbook/sec-deposit.shtml#footnote236. i ii California Security Deposits (Part Two of Three), http://www.courts.ca.gov/partners/documents/InitialInspection.pdf. California Security Deposits (Part Two of Three), http://www.courts.ca.gov/partners/documents/InitialInspection.pdf.