Residential tenancies: return of security.

The legislative counsel's digest was corrected to remove the erroneous phrase 'the tenant landlord' and replace it with 'the landlord,' fixing a drafting error in the summary description of how electronic security returns work.

The bill was reformatted from the Senate amendment layout (with line numbers, amendment history, and page headers) to the enrolled bill format (with passage dates, Governor receipt block, and standard chapter formatting). No statutory language was changed.

The bill text was reformatted from the official chaptered document layout (with page numbers, running headers, and formal spacing) to a web page presentation that includes site navigation elements, a version history list, and metadata such as publication date. The underlying legal provisions are unchanged.

The method for returning security deposits was restructured. The old version required certified mail when returning by mail (with a prohibition on deducting postage) and had a detailed definition of electronic funds transfer. The new version removes both, instead requiring return by personal delivery or check by first-class mail as the default, with electronic return required only if the landlord originally received security or rent electronically.

A new requirement (subclause II) obligates landlords who received security or rent electronically to notify tenants in writing of their right to receive the security deposit electronically. This notice must be given within a reasonable time after either party notifies intent to terminate, or before the end of the lease term. It does not apply if the parties already have a written agreement designating another return method.

New provisions address what happens when a landlord's interest in the property terminates (sale, death, etc.) and security transfers to a successor. The successor must return the security electronically only if the successor received rental payments electronically from the tenant.

For multiple adult tenants, the itemized statement may now be delivered by personal delivery or first-class mail (previously only first-class mail). The mutual agreement exception for multiple tenants now explicitly requires a 'written' agreement, and the default rule is restructured to lead with the written agreement exception.

The detailed statutory definition of 'electronic funds transfer' (covering point-of-sale transfers, direct deposits, ACH transfers, recurring transfers, etc.) was removed from the bill.

The default method for returning the remaining security deposit changed from 'in the manner the security was received' to personal delivery or a check made payable to the tenant and mailed by first-class mail, postage prepaid.

If the landlord received the security OR rental payments from the tenant electronically, the landlord must return the remaining security electronically to a designated bank account or by any electronic or virtual method available to the landlord. The parties may instead designate another method of return by written agreement.

New rule for multiple adult tenants: the landlord must return the remaining security by a check made payable to all adult tenants on the rental or lease agreement at the time the tenancy terminates, and furnish the itemized statement by first-class mail to any one adult tenant chosen by the landlord.

The itemized statement delivery method was restructured: default is personal delivery or first-class mail, postage prepaid. By mutual agreement entered at any time, it may instead be delivered by email to an account provided by the tenant.

The introduced version's requirement that if returning security by mail, the landlord must use certified mail, was removed in favor of first-class mail as the default for check returns.

Multiple adult tenants may enter into a mutual written agreement (at commencement of tenancy or any time during/after) specifying how the security will be returned (to a specific tenant or divided among tenants with allocation percentages) and how the itemized statement will be delivered to each tenant (email or first-class mail).

Corrected a typo in the bill summary: changed 'the bill would instead require the tenant to return the remainder of the security electronically' to 'the bill would instead require the landlord to return the remainder of the security electronically.' The landlord is the party who returns the deposit, not the tenant.

Expanded the electronic return notification obligation in subdivision (e)(1)(A)(i)(II) to apply not only to the landlord but also to 'the landlord's successor in interest.' This means if a property is sold or transferred, the new owner must also notify the tenant in writing of their right to receive the security deposit electronically.

Added the clarification 'if agreed to in writing by the tenant' when describing electronic or virtual methods available to a landlord's successor in interest for returning security deposits, making explicit that tenant consent is required for electronic return via a successor.

New exception: the landlord's obligation to notify the tenant in writing about the right to receive security electronically does not apply when the tenancy is terminated pursuant to subdivision (2), (3), or (4) of Section 1161 of the Code of Civil Procedure (certain eviction proceedings).

New clause (iii): if multiple adult tenants reside in a unit and one tenant terminates the lease under Section 1946.7 (domestic violence protection), no written mutual agreement exists, and that tenant requests security be disbursed in a manner other than by check made payable to all adult tenants, the landlord may return the security in that alternative manner. This prevents a survivor's name or address from appearing on a joint check that could fall into an abuser's hands.

Cross-reference in clause (C)(i) updated from 'Except as provided by' to 'Unless Except as provided in clause (iii) and unless the landlord and all adult tenants...' to incorporate the new clause (iii) exception into the existing framework for multiple adult tenants.