The Property Management Shop

Simple Compliance Steps For Yet Another Law

by Marc Wilson

Q. I understand that Assembly Bill 2330 regarding the disposition of security deposits has been signed into law. Is this true? What does
this mean? How do I comply?

A. Unfortunately, your information is correct. Assembly Bill 2330 was signed into law, effective January 1, 2003. You are now required to
inform any vacating tenant of his or her right to both a pre-vacancy inspection and an itemized statement that specifies repairs or
cleaning. This statement constitutes the basis for any legally permissible deduction from the vacating tenant’s security deposit.
Your role works like this:

You receive a notice to vacate from your tenant;
You send the tenant an acknowledgement of receipt of their notice to vacate;
Your acknowledgement includes formal notification of the tenant’s right to a pre-vacancy inspection, to be present at the inspection, and
to a written statement that specifies potential repairs and problems related to the disposition of the tenant’s security deposit;
The tenant either requests a formal pre-vacancy inspection or ignores it;
If the tenant does not request a pre-vacancy inspection, proceed as you normally would;
If the tenant requests an inspection, arrange an appropriate time and date with the tenant, inspect the unit and forward an itemized
statement to the tenant that delineates the condition of the unit and any potential issues regarding the disposition of the security
deposit.

This law, as with most worthless laws, contains some very technical requirements concerning the time frame for notification, the contents of the notification letter, and more. If you are concerned about absolute compliance with the law, I suggest that you look up the California Apartment Association’s AB 2230 Walk-through Process on their Web site at caanet.org. The SFAA and the CAA are diligently working on the creation and distribution of forms and documents you will need to help you comply with this law (see Sacramento Report on page 22).

More than anyone else, this law will impact large owners and property management companies. Those of us who deal with 3, 4 or 10 vacancies a month know there is real potential for some seriously wasted time in coping with this new law. Regardless of the building’s location, each and every inspection will take at least one hour. Do your multiplication, and you will realize that one hour times 3, 4 or 10 vacancies a month can add up quickly and eat up a lot of your time.

I have been conforming to this new law for the last month, and I would like to share some of my observations with you. Now, more than ever, the standard move-in inspection checklist provided by the SFAA is important. Do not enter into any new rental agreements without incorporating this form.

Notification of the tenant’s new rights is easy. Simply adopt a couple of new paragraphs to your notification of receipt of the intent-to-vacate letter. You do have a notification of receipt of intent-to-vacate letter, don’t you? This is your standard letter of response that acknowledges the tenant is vacating and includes instructions about what to do with the keys, admonitions against leaving any
personal property in or around the property, expectations concerning the condition of the unit, a request for a forwarding address, a copy of the original move-in inspection check list, and now thanks to this new law a notification regarding the tenants’ right to request an inspection.

In addition to conforming to the new law as described above, I recommend you keep in mind the following guidelines:

1. Your first goal is to comply with the notification requirements while minimizing the probability that the tenant will actually insist on an inspection. My letter includes some verbiage on the historical fairness of our security deposit dispositions, the inefficiencies inherent in a personal meeting, and a phone number that the tenant can call to try to answer any specific questions without having to resort to an actual meeting. Your goal is to discourage a meeting or even a visit to the unit before the tenant vacates. Feel free to call if you would like a copy of my standard letter.

2. Your second goal is to minimize the time and energy involved in setting up a pre-vacancy inspection should the tenant insist on an inspection. Simply enclose a request-for-inspection document with your initial notification letter and ask the tenant to complete and mail or fax it to your office. The form should also serve as an authorization for you to enter the apartment during normal business hours in a
specific seven-day period. Again, call me if you would like a copy of this form.

3. So far my experience reveals that the average tenant is not much interested in actually being present when I inspect the property. My request-for-inspection document assumes that I will inspect the property myself at a time convenient for me. I know this might not be 100 percent in compliance with the law, but I have to believe that if the tenant completes and signs the form everything will be okay.
Remember, the tenant probably does not want to miss work in order to be present for the inspection, especially when he learns that I will not say a spoken word at the inspection.

4. If the tenant coerces you into a pre-vacancy inspection, do not say a word during the inspection. Do not make any verbal comments whatsoever concerning the condition of the apartment during the inspection. If you are not talking about the weather, you should say nothing at all. Your duty is to provide the tenant with a written notice, not a verbal notice. Do not turn the inspection into a potentially
volatile situation. You could very well have a conflict of interest with the tenant, so do not aggravate the situation by opening your mouth. Simply tell the tenant that you will mail or fax the results of your inspection the following day.

5. Do not respond to the tenant’s questions, comments and concerns regarding your written pre-vacancy inspection checklist. You have performed your obligation under the law. You have nothing to gain by encouraging a back-and-forth haggling session with the tenant before you even take possession of the apartment.

If you follow these guidelines, you will find that compliance with this new law is not all that onerous a task. Thankfully, the great majorityof your tenants will not insist on a face-to-face meeting.

The opinions expressed in this article are those of the author and do not necessarily reect the viewpoint of the SFAA or the SF Apartment Magazine. Marc Wilson has been managing and selling San Francisco Apartment buildings for over 15 years. Please send your questions concerning property management issues to Marc Wilson, 1699 Van Ness Avenue, SF, CA 94109. He can be reached at 415.229.1275. Copyright © 2003 San Francisco Apartment Magazine