Do tenants have the right to receive interests on security deposits from landlords? Is there a difference btwn residential and commercial?

Asked by Inquiring Mind, Santa Clara, CA Wed Sep 21, 2011

This question applies to California.

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Mark Burns’ answer
Mark Burns, , Cupertino, CA
Wed Sep 21, 2011
A tenant may request an interest bearing account. The tenant will also be responsible for the cost of maintaining that account. The math says earning a half percent on a $2000 deposit is about 83 cents a month. The cost of the account would probably run $10 to $25 per month.

Mark Burns, Realtor
Coldwell Banker Elite - Top 2% Worldwide
DRE #00896552 Licensed since 1985
Over 600 Homes Sold in SIlicon Valley
Member - California Apartment Association
Web Reference:  http://www.markburns.com
1 vote
John Souerbry, Agent, Fairfield, CA
Thu Sep 22, 2011
There is no state-wide requirement for a landlord to pay interest on security deposits unless the landlord voluntarily places the deposit in an interest-bearing account, which most don't. However, some towns in the Bay Area do require landlords to pay interst, such as Santa Cruz and Hayward. Santa Cruz publishes a table on the town web site with the interest rates the landlord must pay each year the deposit is held, regardless of whether or not the deposit was placed in an interest-bearing account. These rates are applicable to residential properties, commercial leases are subject to the terms of the lease.
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Wed Sep 21, 2011
Hi Inquiring Mind:

Unless your lease specifically states that your security deposit will gain interest at a specific rate, the answer is "no" and the assumption is that there is NOT any interest earned on the security deposit.

Sorry about that!!

Sincerely,
Grace Morioka
Area Pro Realty
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