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Santa Cruz Interest on Security Deposits

Mar-23-2013

City of Santa Cruz - Interest on Security Deposits

Changes in the City of Santa Cruz’s Ordinance concerning the landlord’s responsibility to pay tenants interest on their security deposit was approved January 22, 2013 and took effect March 12, 2013. This new process reduces the burden placed on rental owners to calculate, process, and distribute yearly interest payments to tenants. It is common that these payments are less than $1.00 per year, with the cost to the rental owner to process them far exceeding that amount.

As a result of the changes, landlords who rent property within the City of Santa Cruz may pay tenants’ security deposit interest at the earlier of the following:

1) The termination of tenancy or

2) At the next February occurring after accrued interest reached $50.00

In the case that interest is paid at termination of tenancy, the tenant shall be entitled to a direct payment of all accrued security deposit interest no later than twenty-one (21) days after the tenant has vacated the premises.

Rental owners in the county still need to pay the tenant by January 1st.  Many hope they will also adopt this new payment timeline. You can check the County’s ordinance web site (http://www.codepublishing.com/ca/santacruzcounty) to see if they have updated their ordinance with changes similar to the City of Santa Cruz.