Chapter 5.48
TENANT’S INTEREST ON SECURITY DEPOSITS FOR RESIDENTIAL RENTAL PROPERTIES
Sections:
5.48.020 Application of chapter – Exceptions.
5.48.030 Accrual of tenant’s interest.
5.48.040 Payment of tenant’s interest.
5.48.060 Investment of security deposit.
5.48.010 Definitions.
As used in this chapter, certain words and phrases are defined as follows:
A. “Security deposit” means security deposit as defined in Section 1950.5 of the California Civil Code.
B. “Tenant’s interest” means interest per year on security deposits in amounts as provided in Section 5.48.025. (Ord. 804 (part), 1998)
5.48.020 Application of chapter – Exceptions.
This chapter applies to any rental agreement, written or oral, which is subject to the provisions of Section 1950.5 of the California Civil Code. This chapter shall not apply where:
A. The tenancy is ninety or less days total;
B. The amount of the security deposit is less than two hundred fifty dollars;
C. The rent is assisted or subsidized by any governmental unit, agency or authority, to the extent regulations of such government unit, agency or authority conflict with this chapter;
D. Landlords are required by law to hold security deposits in noninterest-bearing accounts;
E. Public housing is owned by the Santa Cruz County housing authority. (Ord. 804 (part), 1998)
5.48.025 Minimum interest.
On or before December 31st of each year, the city council shall set the minimum interest rate (for tenant security deposits) for the next calendar year. The rate shall approximate then-current savings passbook account interest rates, unless good cause is shown for using a different method. A rental agreement may provide for a tenant’s interest at a percentage rate greater than that established by the city council resolution then in effect; however, under no circumstances shall a rental agreement provide for a tenant’s interest at a percentage rate less than that established by the resolution then in effect. Unless a rental agreement provides for a tenant’s interest at a percentage rate greater than that established by the resolution then in effect, the tenant’s security deposit shall bear interest at that percentage rate established by the resolution. (Ord. 804 (part), 1998)
5.48.030 Accrual of tenant’s interest.
Tenant’s interest shall begin accruing on March 1, 1998, or on whatever date the security deposit is actually received by the landlord thereafter. (Ord. 804 (part), 1998)
5.48.040 Payment of tenant’s interest.
A. Payment on Termination. A tenant shall be entitled to a payment of tenant’s interest as provided in Civil Code Section 1950.5, at the earlier of the following:
1. Upon termination of tenancy;
2. At the end of the next February occurring after accrued interest reaches fifty dollars.
B. For periods of less than one year, the interest shall be prorated. (Ord. 813 § 1, 2000; Ord. 804 (part), 1998)
5.48.050 (Reserved)
5.48.060 Investment of security deposit.
Nothing in this chapter shall preclude a landlord from exercising his or her discretion in investing security deposits. (Ord. 804 (part), 1998)
5.48.070 Notice to tenants.
The landlord who is subject to the provisions of this chapter shall, at the time of entering into a rent or lease agreement with the tenant, provide the tenant with a written notice. The notice shall generally apprise the tenant of the tenant’s right to annually receive interest on his or her security deposit; shall apprise the tenant that the city of Capitola is the agency that establishes the rate of interest to be earned on that security deposit; and shall apprise the tenant of the landlord’s potential liability for statutory damages for failure to comply with any provision of this chapter and for additional liability for statutory damages under California Civil Code Section 1950.5 for the malicious retention of the security deposit. If the tenant speaks Spanish as his or her primary language, the notice shall be in Spanish. (Ord. 804 (part), 1998)
5.48.080 Waiver.
Any waiver by a tenant of rights under this chapter shall be void as contrary to public policy. (Ord. 804 (part), 1998)