Interest Ordinance

Interest Ordinance

[Providing that the annual landlord interest payments on residential tenant security deposits shall be due at the interest rate in effect on the tenant's immediately preceding annual rental anniversary date.]

 

Ordinance amending Administrative Code Chapter 49 "Security Deposits for Residential Rental Property," to provide that the annual landlord interest payments on security deposits shall be due at the interest rate in effect on the tenant's immediately preceding annual rental anniversary date.

 
 

Note: Additions are single-underline italics Times New Roman font;
deletions are 
strikethrough italics Times New Roman font.

Board amendment additions are double underlined Arial font;

Board amendment deletions are strikethrough normal Arial font.

 

Be it ordained by the People of the City and County of San Francisco:

 

Section 1. The San Francisco Administrative Code is hereby amended by amending Section 49.2, to read as follows:

Sec. 49.2. PAYMENT OF INTEREST ON SECURITY DEPOSITS.

(a) A landlord who is subject to the provisions of Section 1950.5 of the California Civil Code shall pay simple interest on all security deposits held for at least one year for his/her tenants; provided, however, that this requirement shall not apply where the rent is assisted or subsidized by any government unit, agency or authority.

(b) Interest shall begin accruing on September 1, 1983, or on whatever date the security deposit is received by the landlord after September 1, 1983, and shall accrue until the tenancy terminates. Beginning on September 1, 1984, or on any date thereafter upon which the security deposit has been held by the landlord for one year, a tenant shall be given the unpaid accrued interest in the form of ether a direct payment or a credit against the tenant's rent. The landlord shall choose between these two methods of payment.

(c) The landlord may elect to pay the accrued interest as provided in Subsection (b) above on a monthly basis, but in no event less than once a year.

(d) Upon termination of tenancy, a tenant whose security deposit has been held for one year or more shall be entitled to a direct pro-rata payment of any unpaid accrued interest no later than two weeks after the tenant has vacated the premises; provided, however, that a landlord may retain any portion of the unpaid accrued interest, subject to the limitations and requirements set forth in Section 1950.5 (e) of the California Civil Code, where the security deposit alone is insufficient to remedy tenant default in the payment of rent, to repair damages to the premises caused by the tenant, exclusive of ordinary wear and tear, or to clean such premises, if necessary, upon termination of the tenancy.

(e) Nothing in this Chapter shall preclude a landlord from exercising his or her discretion in investing security deposits.

(f) Notwithstanding the provisions of (a) through (d) above, where a landlord seeks reimbursement for the annual Residential Rent Stabilization and Arbitration fee as provided in Sec. 37A.6 of this Code, the landlord may deduct said fee from the next interest payment owed to the tenant pursuant to this Chapter.

(g) The interest rate for interest payments required by this Chapter 49 shall be determined by the Residential Rent Stabilization and Arbitration Board (Rent Board), to be effective on March 1 of each year. The Rent Board shall calculate the rate as of the immediately preceding December 31st according to the Federal Reserve Discount Rate, using an average of the twelve most recent monthly rates (rounded to the nearest tenth) as posted by the Federal Reserve on the Federal Reserve Statistical Release internet site. The interest rate payableEACH YEAR under this Chapter shall be the interest rate in effect on the tenant's immediately preceding annual rental anniversary date FOR EACH APPLICABLE YEAR AND/OR THE DATE THAT THE TENANT VACATES THE UNIT.

 
 
 
 

APPROVED AS TO FORM:

DENNIS J. HERRERA, City Attorney

 
 

By:

MARIE CORLETT BLITS

Deputy City Attorney