Definition of ‘Deposit’ Can Make a Difference at End of Lease

Question: I have been a landlord for many years. Recently I heard that it is not a good idea to charge the tenant first and last months’ rent plus a small security deposit. Isn’t this the best protection for me? Can you explain this further?

Property manager Robert Griswold replies:

Though the custom and practice for many years has been to collect first and last months’ rent plus security, it is not a good idea to allocate the funds in this manner.

It may seem like merely a case of semantics, but it can be an important distinction. I recommend that you should collect the first month’s rent, plus a larger security deposit (equal or larger than the amount of the last month’s rent plus your current security deposit).

There are several advantages to this policy. For example, in our current landlords’ market with its rapidly increasing rents, there may be confusion if you have collected the last month’s rent upon move-in and the rent is later increased. Also, by allocating the funds collected in advance as the last month’s rent, you are potentially limited to using the funds only for that purpose. Calling the money a “security deposit” will allow you to use it for any legal purpose. This can be important should there be damage.

Attorney Ted Smith replies:

I advise all of my landlord clients to call the entire amount a “security deposit.” There are good reasons why. Let’s say that you take a first and last months’ rent and deposit. The resident gives you a proper written 30-day notice. You apply the “last month’s rent” to this final month. The place is left trashed. You’d like to keep all the money held against damages to the apartment, but you can’t. The last month’s rent portionmust be used for rent only; only the security deposit part can be used for damages. Like it or not, you have to use the rent part for rent only, then take the resident to Small Claims Court for damage exceeding the security deposit portion.

California landlords have the right to charge a maximum security deposit of two times the monthly rent for unfurnished residential rentals and three times the monthly rent for furnished. My advice is to call it all a security deposit and obtain from the resident the maximum the law allows and that the market will bear.

Disappointed by Loss of Backyard Deck

Q: For three months we have rented a home with a small but beautifully landscaped backyard. It is mostly bushes, mature pine trees and bark ground cover with a little grass and river-rock borders.

About one-third (about 300 square feet) of the backyard was taken up by a very nice wooden deck. The deck had fairly extensive termite damage, so the property manager and owner decided to remove it.

It has been removed, but I am not happy about the choice for replacement: grass. Because of the high cost of replacing the deck ($500 for lumber plus labor), the decision has been made to replace it with a lawn.

The deck was one of the things that attracted us to this house, and was a large part of the backyard design. Is there any way we can force the landlord to spend some additional money on landscaping, above and beyond the lawn? We are willing to live without the deck, but we think a few hundred dollars spent to match some of the existing backyard features (like additional border and stepping stones) is reasonable.

Also, some of the in-ground lawn sprinklers will now be in the middle of the lawn instead of at the edge of the raised deck. They need to be moved to less damage-prone spots. The property manager has not shown much interest in discussing this possibility.

We are month-to-month tenants. Do we have any legal backing here?

Griswold replies:

You do not have a strong legal position because the deck is an amenity, not a health and safety issue. Unless there were specific verbal or written agreements about the potential deck removal, combined with an agreement to either require replacement or adjust your rent, you are unfortunately out of luck in terms of legal standing.

In other words, unless you can clearly demonstrate that the deck was a fundamental aspect of your negotiations (not just “one of the things that attracted” you), you are unlikely to prevail. You do have the right to move, because you are on month-to-month terms.

Another option is to offer a compromise by which you will pay some additional rent toward the deck. For example, maybe you could offer $50 a month for the next eight to 10 months so that you are paying for about half of the replacement cost.

The only other argument you could make is “loss of use,” in which case your loss would be limited to the fair market value of the deck (most likely only $25 to $50) for 30 days (since you are on month-to-month terms).

I think your best bet is to offer to pay some or even all of the cost of the deck replacement or learn to live without it.

Carpet Damaged by Both Dog and Time

Q: I have lived in my rental home for 11 years. Though I did not have a pet when I moved in, I got a dog about 10 years ago. I do not have a pet deposit and do not pay any additional pet rent.

My dog has caused irreparable damage to my carpeting. I know that when I eventually move, the carpet will need to be replaced, but shouldn’t the landlord share some of the cost because of normal wear and tear? How would we settle who owes what percentage? Am I at the mercy of the landlord?

Griswold replies:

If you have lived on the same carpet (even if it was brand new when you moved in and assuming that it is a normal grade of carpet) for 11 years, then this is clearly normal wear and tear and you should not be charged anything.

If the carpet has been replaced in the last five to 10 years, you should only pay a portion of the replacement cost. There is no magic answer to the percentage, but it should be based on what the remaining life of the carpet would have been if your pet hadn’t destroyed it.

As an elementary illustration only, assume that your carpet had a 10-year life and cost $1,000 to replace. If your pet destroyed it in five years, it might be reasonable to charge you up to $500 to compensate the landlord for replacing the carpet five years earlier than anticipated.

As far as what you should do now, you can either take it up with your landlord--which I would do if you were considering staying for any period of time since you should get new carpet--or you can just leave things alone until you move out.

Again, a fair landlord will not charge you anything if you have lived on the same carpet for 11 years, as carpet normally (without pets) should last five to 10 years. Remember that there are no official guidelines about the definition of wear and tear and/or the life span of carpet.

This column is written by property manager Robert Griswold, host of “Real Estate Today!” (KSDO-AM [1130], 10 a.m. to noon Saturdays), and attorneys Steven R. Kellman, director of the Tenants’ Legal Center, and Ted Smith, principal in a law firm representing landlords.

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If you have a question, send it to Rental Roundtable, Real Estate section, L.A. Times, 202 W. 1st St., L.A., CA 90012. Or you may e-mail them at rgriswold.latimes@retodayradio.com. Questions should be brief and to the point and cannot be answered individually.