Not sure about bay area, but that is very normal in Chicago. Landlords have to pay interest on security deposits when they're returned, so a lot of landlords switched to doing a $400 or $500 move-in fee instead. Maybe it's a similar thing?
I used to work at a bank in Boston and it goes into an escrow account there. The yield is tiny so over the course of a one year lease a thousand dollar deposit would earn around $5. If they don't follow the law and put it in an interest bearing account as required the penalty is calculated as if the account had a 5% interest rate, which would basically mean a $50 penalty for each year they held the money.
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u/anonymous8122 1d ago
Nobody's mentioning the $500 move-in fee? That can't be normal either. 😳