Security Deposit Law
What California landlords must do with security deposits — the cap, interest, return deadline, account rules, and penalties — with citations to the statute itself.
Verified as of June 11, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
One month's rent for most landlords; two months for qualifying small landlords (never for service members).
Interest
No state law requires interest on residential security deposits in California.
Return deadline
Itemized statement plus any refund due within 21 calendar days after the tenant vacates.
Since July 1, 2024 (AB 12), a landlord may not demand or receive security in excess of one month's rent, in addition to first month's rent paid on or before initial occupancy (Civ. Code § 1950.5(c)(1)); the cap does not apply to security collected or demanded before July 1, 2024 (§ 1950.5(c)(6)). A small landlord may charge up to two months' rent if the landlord is a natural person (which includes a settlor or beneficiary of a family trust, § 1950.5(c)(5)(C)) or an LLC in which all members are natural persons, and owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent (§ 1950.5(c)(5)(A)) — but this two-month exception never applies to a prospective tenant who is a service member, and a landlord may not refuse to rent to a service member because of that limit (§ 1950.5(c)(5)(B)). On or after April 1, 2025 (SB 611), if a landlord charges a service member a higher-than-standard or advertised security based on credit history, credit score, housing history, or other tenant-related factor, the landlord must provide a written statement of the higher amount and the reason on or before lease signing, must return the additional amount after no more than six months of residency if the tenant is not in arrears for any rent due during that period, and the date for return of the additional amount must be included in the lease agreement (§ 1950.5(c)(4)). Separately, the cap does not restrict prepaid rent: § 1950.5(c)(2) provides that the subdivision does not prohibit an advance payment of not less than six months' rent if the lease term is six months or longer — advance rent is distinct from security and is not counted toward the deposit cap.
Cal. Civ. Code § 1950.5(c) · AB 12 (Haney), Stats. 2023, Ch. 733 · SB 611 (Menjivar), Stats. 2024, Ch. 287
Civil Code § 1950.5 — California's residential security deposit statute — contains no requirement that landlords pay or credit interest on deposits. Some rent-controlled cities require interest by local ordinance; see Local Overlays below.
No later than 21 calendar days after the tenant vacates, the landlord must furnish an itemized statement of deductions and return any remaining security (§ 1950.5(h)(1)). Copies of receipts, invoices, and (for deductions) photographs with a written cost explanation must accompany the statement (§ 1950.5(h)(2)), unless the repair and cleaning deductions together do not exceed $125 (§ 1950.5(h)(4)(A)) or the tenant signed a waiver of documentation rights at or after notice of termination (§ 1950.5(h)(4)(B)) — but even then, if the tenant requests documentation within 14 calendar days of receiving the itemized statement, the landlord must comply within 14 calendar days of the request (§ 1950.5(h)(5)). If a repair cannot reasonably be completed within 21 days (or third-party documents are not yet in hand), the landlord may use a good-faith estimate, then must finalize within 14 calendar days of completing the repair or receiving the documents (§ 1950.5(h)(3)). Effective January 1, 2026 (AB 414): if the landlord received the security or rental payments electronically, the remaining security must be returned electronically to a bank account or other financial institution designated by the tenant in writing (or by another electronic method the tenant agrees to in writing), unless a written agreement designates another return method; the landlord must give written notice of the tenant's right to electronic return around the time of termination (§ 1950.5(h)(1)(A)(ii)). The itemized statement may be emailed only upon mutual agreement (§ 1950.5(h)(1)(B)(ii)). If multiple adult tenants reside in the unit and there is no written mutual agreement, the refund must be a single check made payable to all adult tenants on the lease (§ 1950.5(h)(1)(C)).
Cal. Civ. Code § 1950.5(h) · AB 414 (Pellerin), Stats. 2025, Ch. 340, eff. Jan. 1, 2026
California does not require landlords to hold security deposits in a separate or escrow account. The statute requires only that the security be held by the landlord for the tenant, and gives the tenant's claim to the security priority over any creditor of the landlord (§ 1950.5(d)). Lease provisions calling any security 'nonrefundable' are prohibited (§ 1950.5(n)).
A landlord who in bad faith claims or retains the security (or demands replacement security in violation of subdivision (k)) may be liable for statutory damages of up to twice the amount of the security, in addition to actual damages, and the court may award bad-faith damages whenever the facts warrant even if not requested (§ 1950.5(m)). A landlord who in bad faith fails to comply with the 21-day statement-and-return requirements is not entitled to claim any amount of the security (§ 1950.5(h)(7)). In any action, the landlord bears the burden of proving the reasonableness of amounts claimed (§ 1950.5(m)), and tenants may sue in small claims court (§ 1950.5(o)).
Several rent-controlled California cities require landlords to pay or credit interest on security deposits under local ordinances — commonly cited examples include San Francisco (Admin. Code ch. 49), Los Angeles (LAMC 151.06.02), Berkeley (BMC ch. 13.76), Santa Monica, and West Hollywood. NOTE: this city list is general guidance and was not verified against current ordinance text for this page; rates, payment schedules, and covered units vary and change annually, so landlords should confirm current requirements with the local rent board before relying on them.
Within 21 calendar days after the tenant vacates, furnish an itemized statement and refund the balance (§ 1950.5(h)(1)). Receipts and invoices are not required when repair-plus-cleaning deductions total $125 or less (§ 1950.5(h)(4)(A)) or when the tenant signed a documentation waiver at or after notice of termination (§ 1950.5(h)(4)(B)) — but if the tenant requests documentation within 14 calendar days of receiving the statement, you must provide it within 14 calendar days of the request (§ 1950.5(h)(5)).
If you received the deposit or any rent payments electronically, you must refund the remaining security electronically to an account the tenant designates in writing (or another electronic method the tenant agrees to in writing) unless a written agreement designates a different method, and you must notify the tenant in writing of this electronic-return right around the time of termination (§ 1950.5(h)(1)(A)(ii)). The itemized statement may be emailed only if the tenant mutually agrees (§ 1950.5(h)(1)(B)(ii)). With multiple adult tenants and no written agreement on allocation, the refund must be one check payable to all adult tenants on the lease (§ 1950.5(h)(1)(C)).
Cal. Civ. Code § 1950.5(h)(1)(A)-(C), as amended by AB 414 (Stats. 2025, Ch. 340)
For tenancies beginning on or after July 1, 2025, you must photograph the unit immediately before or at the start of the tenancy; beginning April 1, 2025, you must photograph the unit after possession is returned but before any deducted-for repairs or cleaning, and again after the work is done (§ 1950.5(g)). If you deduct for repairs or cleaning, those photographs plus a written explanation of the cost must accompany the itemized statement (§ 1950.5(h)(2)).
Cal. Civ. Code § 1950.5(g), (h)(2) · AB 2801 (Friedman), Stats. 2024, Ch. 280
You may use the deposit only for unpaid rent, repair of tenant-caused damage exclusive of ordinary wear and tear, cleaning to return the unit to its move-in level of cleanliness, and (if the lease authorizes) future defaults on restoring personal property (§ 1950.5(b)). Repair and cleaning claims are limited to a reasonable amount necessary to restore the premises to its condition at the inception of the tenancy, exclusive of ordinary wear and tear (§ 1950.5(e)(2)(B)), and you may not charge for professional carpet cleaning or other professional cleaning services unless reasonably necessary to return the unit to its move-in condition (§ 1950.5(e)(2)(C)).
If you charge a service member a higher-than-standard or advertised deposit because of credit history, credit score, housing history, or another tenant-related factor, you must give a written statement of the higher amount and the reason on or before lease signing, return the additional amount after no more than six months of residency if the tenant is not in arrears for any rent due in that period, and include the date for return of the additional amount in the lease agreement (§ 1950.5(c)(4)). Service members are also exempt from the small-landlord two-month cap exception, and you may not refuse to rent to a service member because of that one-month limit (§ 1950.5(c)(5)(B)).
Within a reasonable time after either party gives notice (or before a fixed lease ends), you must notify the tenant in writing of their option to request an initial inspection and right to be present; if requested, the inspection happens no earlier than two weeks before move-out with at least 48 hours' written notice (waivable in writing by both parties), and gives the tenant a chance to fix deficiencies and avoid deductions (§ 1950.5(f)).
The demand is unlawful under § 1950.5(c)(1); a bad-faith demand or retention exposes you to statutory damages of up to twice the deposit plus actual damages (§ 1950.5(m)).
These claims are barred by § 1950.5(e)(2)(A)-(C); in court the landlord bears the burden of proving the reasonableness of every amount claimed (§ 1950.5(m)).
Bad-faith failure to comply with subdivision (h) forfeits your right to claim any of the security (§ 1950.5(h)(7)) and risks up-to-2x statutory damages (§ 1950.5(m)).
Prohibited outright — 'A lease or rental agreement shall not contain a provision characterizing any security as "nonrefundable"' (§ 1950.5(n)); all security must be accounted for and refundable under subdivision (h).
AB 414 requires electronic return to a tenant-designated account in that scenario (§ 1950.5(h)(1)(A)(ii)) and a single check payable to all adult tenants absent a written agreement (§ 1950.5(h)(1)(C)); noncompliant return mechanics risk the bad-faith penalties in (h)(7) and (m).
Since July 1, 2024, no more than one month's rent (in addition to the first month's rent). Small landlords — natural persons (including settlors or beneficiaries of a family trust) or LLCs whose members are all natural persons, owning no more than two rental properties with no more than four total units — may charge up to two months' rent, but never to a service member. (Civ. Code § 1950.5(c).)
21 calendar days after the tenant vacates. You must send an itemized statement plus receipts, invoices, and deduction photographs — unless repair and cleaning deductions total $125 or less or the tenant signed a valid documentation waiver. Even then, if the tenant requests documentation within 14 days of the statement, you must provide it within 14 days of the request. (Civ. Code § 1950.5(h).)
Not under state law — Civil Code § 1950.5 has no interest requirement. However, some rent-controlled cities (such as San Francisco, Los Angeles, Berkeley, Santa Monica, and West Hollywood) require deposit interest by local ordinance, so check your city's rent board rules.
Unpaid rent, repair of tenant-caused damage beyond ordinary wear and tear, cleaning needed to return the unit to its move-in level of cleanliness, and (if the lease allows) restoring or replacing the landlord's personal property. Claims must be a reasonable amount necessary to restore move-in condition, and you cannot charge for professional carpet or other professional cleaning unless reasonably necessary. (Civ. Code § 1950.5(b), (e)(2).)
A bad-faith failure to comply with the statement-and-return rules forfeits the landlord's right to claim any of the deposit, and bad-faith retention can add statutory damages of up to twice the deposit on top of actual damages. The landlord also bears the burden of proving deductions were reasonable. (Civ. Code § 1950.5(h)(7), (m).)
Yes. For tenancies starting on or after July 1, 2025, you must photograph the unit at or immediately before move-in; since April 1, 2025, you must photograph the unit after the tenant returns possession (before any deducted-for repairs or cleaning) and again after the work is completed, and include the photos with a written cost explanation in the itemized statement when you deduct. (Civ. Code § 1950.5(g), (h)(2), added by AB 2801.)
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Statute facts on this page were verified against the cited official sources on June 11, 2026.
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