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Landlords and Tenants Both Winners with AB 1679 - Security Deposit Legislation

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Assembly Bill 1679 is a win-win for tenants and property owners. It brings California law in line with modern technology, by allowing rental property owners and tenants to mutually agree to:

1) Allow property owners to deposit any remaining portion of the security deposit directly to a bank account designated by the tenant; and

2) Allow property owners to provide a copy of the itemized statement along with supporting documents to an e-mail account provided by the tenant.

Unfortunately, current State law does not allow rental property owners to return a security deposit directly to a tenant's bank account. Having to return security deposits back through a physical check significantly slows down that return and costs property owners time and money. In addition, tenants often do not provide a forwarding address in a timely manner, thereby further delaying the return of their security deposit.

Under current law, rental property owners are only allowed to return tenant security deposits through a physical check delivered personally or by first-class mail. This requirement to return a security deposit by a physical check was first placed in statute decades ago, long before the advent of modern technology, electronic fund transfer options, and email.

Today, more tenants are asking that rental property owners return any remaining security deposit directly into their own bank account. This request is consistent with the way in which many tenants already chose to pay their rent - through an electronic fund transfer (EFT).

The legislation has cleared all legislative committees and is on the way to the Governor's desk.

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