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Does cashing the security deposit refund check mean that you accept the amount that was returned?

San Diego, CA |

Our landlord only returned $400 of the $1350 of security deposit and we are planning on going to small claims court to dispute. So, does that mean we shouldn't cash the money that we did receive? If we cash it are we saying that we accept the amount she gave us?

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Attorney answers 3


As a general matter, cashing the check does not mean that you accept the amount as full payment.

If the check includes a "restrictive endorsement", such as "Payment in Full", where you are to endorse it, then you can strike through the restrictive endorsement - please see the first link below.

If you need information about small-claims court, please see the second link below.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.


I respectfully disagree with my colleague that Civil Code § 1526 controls. Commercial Code § 3311 is irreconcilable with the Civil Code, and since the Commercial Code statute was enacted after the Civil Code statute, it governs, as the case law confirms.

Sp if you're in a dispute, you cannot cross out a restrictive endorsement, cash a check tendered as a settlement or "accord and satisfaction" of that dispute, and reserve your rights to go after more money. Once you cash the check with that "offer," your acceptance of the check is an acceptance of the offer.

Church v. Jamison, 50 Cal.Rptr.3d 166, 143 Cal.App.4th 1568 (Cal.App. Dist.5 10/23/2006): "Reliance on [Civil Code § 1526] has been suspect since . . . Directors Guild of America v. Harmony Pictures, 32 F.Supp.2d 1184 (C.D.Cal. 1998)." First North American National Bank v. Superior Court of Los Angeles County, No. B176618 (Cal.App. Dist.2 01/13/2005): (unpublished) "Pursuant to Woolridge v. J.F.L. Electric, Inc.,. . .and Directors Guild of America v. Harmony Pictures. . . the controlling California statute on the issue of the legal validity of an accord and satisfaction is now Commercial Code § 3311. "

The Official Comment no. 2 to Uniform Commercial Code § 3311 reads: "This [acceptance of compromise by cashing a check] result is the same if [the creditor] adds a notation to the check indicating that the check is accepted under protest or in only partial satisfaction of the claim. Under the common law rule [the creditor] can refuse the check or can accept it subject to the condition stated [ ], but [the creditor] can't accept the check and refuse to be bound by the condition. Id., (emphasis added)."

The bottom line is, if the memo line on the front or the back of the check says anything like "full payment for lease" or "final settlement," or if there was a letter with the check that said anything like that, don't cash the check.. If the check doesn't say anything on the front or back and there's no other "offer," then you can endorse it and cash it and still go to Small Claims court.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.



What if the memo line on the check from the landlords read, "Security Deposit Refund"


Ms. Koslyn is correct and was kind enough to contact me directly about this point. (If AVVO provided the capability, I would withdraw my prior answer.)

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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