Civil Code §1950.5 is the operating manual for California security deposits. It governs how much can be collected, how it must be held, what the deposit can be used for, the 21-day move-out accounting, and what happens when the property changes ownership or management. Every California rental owner should know the framework.
Read the statute directly at leginfo.legislature.ca.gov.
When you change property managers, the deposit funds must transfer with the unit. The prior firm has no contractual or statutory right to hold deposits as leverage against alleged unpaid management fees. The transfer typically completes during the 30-day legal-clock window under the existing PMA. If the prior firm stalls, a 14-day written demand letter (certified mail) usually resolves it; small claims court is the backstop.
NGC's records-audit phase (days 1–10 of the 30-day switch window) starts with deposit reconciliation. We confirm the dollar amount being held per unit by the prior firm in writing, the deposit accounting, and any move-in/move-out history. The transfer happens during the cutover under §1950.5. If there's a shortfall or a missing record, you see it in writing before day 30.
Free service for owners switching to NGC. We draft, send via certified mail, and handle the entire 30-day transition. You sign one form.
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