For decades, California landlords could collect two months' rent as a security deposit on an unfurnished unit (three on a furnished one). AB 12 (Ch. 733, Stats. 2023) ended that: for security demanded or collected on or after July 1, 2024, the default cap is one month's rent, in addition to the first month's rent paid at move-in (Civil Code § 1950.5(c)(1)).
There is one deliberate carve-out, and it's aimed at exactly the landlords Tenvale serves.
The small-landlord exception: two months' rent
Under § 1950.5(c)(5)(A), a landlord may collect up to two months' rent if both of these are true:
- The landlord is a natural person — or an LLC in which all members are natural persons — and, per § 1950.5(c)(5)(C), qualifying family trusts count as natural persons too; and
- The landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
Miss either prong and you're back at the one-month default. A property held in a corporation, a partnership with an entity partner, or a portfolio of three small buildings all fail the test.
The servicemember override
The exception has its own exception: if the prospective tenant is a service member, the deposit is capped at one month regardless of landlord size (§ 1950.5(c)(5)(B)) — and the statute expressly prohibits refusing to rent to a service member because the smaller cap applies to them.
What the 2024–2025 amendments changed (not the cap)
Three later bills amended § 1950.5, and none of them touched the cap amounts — a point worth knowing because summaries frequently blur them together:
- SB 611 (2024): added a disclosure-and-refund procedure when a landlord charges a service member a higher-than-advertised deposit within the cap based on credit history (§ 1950.5(c)(4)), plus deduction limits.
- AB 2801 (2024): move-in/move-out photographic-documentation requirements.
- AB 414 (Ch. 340, 2025, effective January 1, 2026): landlords who received deposits or rent electronically must return the deposit electronically unless otherwise agreed in writing (subdivision (h)), plus itemized-statement mechanics.
The one-month/two-month structure has been stable since AB 12 took effect.
What this means in practice
- Check the date, not just the rule. The cap applies to security demanded or collected on or after July 1, 2024 (§ 1950.5(c)(6)). Deposits lawfully collected before that date weren't retroactively capped.
- "Security, however denominated." The cap covers whatever the money is called — pet deposit, key fee, last month's rent held as security. Renaming a charge doesn't move it outside § 1950.5.
- Small-landlord status is a fact question you should document: entity type and total units owned. If you're at the boundary (a third unit, an entity member), assume the one-month cap.
- Return deadline is unchanged: 21 days after move-out for the itemized statement and refund (§ 1950.5(g)), with bad-faith retention exposing the landlord to up to twice the deposit in statutory damages (§ 1950.5(l)).
You can check the cap for your exact situation — including the small-landlord tier — with our California Security Deposit Limit Calculator.