SEC. 151.06.02. PAYMENT OF INTEREST ON SECURITY DEPOSITS.
(Added by Ord. No. 166,368, Eff. 12/6/90.)
A. Security deposit is defined in Section 1950.5 of the California Civil Code.
B. (Amended by Ord. No. 174,017, Eff. 7/16/01.) A landlord who is subject to the provisions of Section 1950.5 of the California Civil Code shall pay annually interest on all security deposits held for at least one year for their tenants as follows:
1. (Amended by Ord. No. 175,020, Eff. 2/1/03.) Beginning January 1, 2003, the landlord may determine the annual rate of interest by either of the following methods:
(a) Using the annual rate of interest established by the Rent Adjustment Commission (RAC). That rate shall be based on the average of the interest rates on savings accounts paid on September 1 of the previous year, by at least five Federal Deposit Insurance Corporation (FDIC) insured banks with branches in Los Angeles. RAC shall adopt the rate by November 30 of each year and shall publish that rate in a newspaper of general circulation within one week after it is established each year. The interest rate established by the RAC shall be the rate in effect from January 1 through December 31 of the subsequent year.
(b) Using the actual interest earned on each security deposit account each year. If the landlord chooses this method of determining the amount of interest due at the time of payment of the security deposit interest, the landlord shall provide the tenant with bank statements indicating the amount of interest earned on the security deposit for that year. In the event the landlord fails to provide that information to the tenant at the time it transmits payment of the interest to the tenant, the interest rate required to be paid, shall be the rate set by RAC.