By Heidi Palutke, Esq.
CAA research counsel

Owners have a new option for compliance with the 21-day deadline for accounting for a tenant’s security deposit. CAA-sponsored AB 1679, which took effect Jan. 1, allows an owner to provide the accounting by email and electronically return any remaining deposit into the renter’s bank account.

Specifically, AB 1679, introduced by Assemblywoman Susan A. Bonilla, now provides that after either the owner or resident has given notice of termination, they may agree to have the owner:

  1. Deposit any remaining portion of the security deposit electronically to a bank account or other financial institution designated by the tenant; and/or
  2. Provide a copy of the itemized statement along with copies of the documents showing charges incurred and deducted from the security deposit to an email account provided by the tenant.

CAA has created a form, the 18.3 Security Deposit Disposition Agreement, to help its members exercise this new option. CAA recommends that members provide Form 18.3 together with the notice of termination or non-renewal of lease.

It’s important to note that:

  • The agreement must be voluntary. Neither the tenant nor the owner can insist on direct deposit or email if the other party objects.
  • The agreement cannot be made until notice of termination has been given.  In other words, the rental agreement cannot specify that the accounting will be provided by email or that the deposit will be returned electronically. CAA’s Rental/Lease Agreements do state that at the end of the tenancy the parties may agree to electronic return of the deposit.
  • Familiarity with your bank’s electronic transfer procedures is essential to ensure that the deposit is received no later than 21 days after return of possession.