Tenant is threatening to sue me over my deposit for withholding.

[Clifton Ho]

Hi - I have a bit of a complicated tenant situation. I rented  my house out to four roommates who all signed one lease. Three of them moved out this past Aug 30. However, one roommate decided to stay an extra month and moved out Sept 30. The other three roommates are demanding that I should have returned their deposit by Sept 21. according to the laws of returning it within 21 days (property is in California). However, I read that the 21 day count down to return the deposit starts when the last person moves out of the property. Does the countdown start after the last roommate moves out regardless if the others moved out a month earlier?

[Kyle J.]

@Clifton Ho  In California, you have until 21 days after the termination of the tenancy and the tenants have vacated the property to either return their security deposit or send them an itemized statement accounting for any deductions along with any remaining balance from their original security deposit (if there is any left).   

Now, if I'm understanding you correctly, you had just one single lease with all of them listed on it and you only collected one security deposit on this lease initially.  Then, some of the tenants moved out, and at least one of them did not.  If that's the case, then the 21-day clock wouldn't have started until the final tenant moved out.  

It couldn't start before then because they hadn't vacated the property OR returned possession of the property to you until the last of them and their property were out.  Additionally, you wouldn't have been able to do your final inspection of the property before then (which you need to do for the final accounting of any security deposit deductions).  

Perhaps these former tenants are just confused.  But the law doesn't say you have to refund the security deposit every time one (or some) of the roommates moves out.  Could you imagine how confusing and unworkable that would be for landlords?

In any event, more or different facts could always change my opinion, but if I understand that correctly, I don't think you did anything wrong.  

Good luck and hope it works out for you.