California Security Deposit Law: Limits, Deadlines, and Penalties

Since July 1, 2024 (AB 12), California caps security deposits at one month's rent for both furnished and unfurnished units. A small landlord — a natural person (or LLC made up of natural persons) owning no more than two residential properties with no more than four total units — may charge up to two months' rent, but never from a service member. All refundable deposits, whatever they are called, count toward the cap.

Pet deposits are allowed but count toward the one-month cap (there is no separate pet allowance), and no deposit may be charged for a documented service or assistance animal.

The landlord must return the deposit, or the balance with an itemized statement, within 21 calendar days after the tenant vacates. If repairs cannot be finished within 21 days, the landlord may send a good-faith estimate and must deliver final receipts within 14 days after the work is completed.

An itemized statement is required for any deduction. If total deductions exceed $125, the landlord must attach invoices, receipts, or contractor bills; under AB 2801, the statement must also include the required move-out photographs documenting the claimed damage.

A landlord who retains a deposit in bad faith owes statutory damages of up to twice the deposit amount, on top of the actual amounts wrongfully withheld (Civ. Code § 1950.5(l)).

California has no statewide interest requirement, but more than a dozen cities require it by local ordinance — including San Francisco, Berkeley, Santa Monica, West Hollywood, and Los Angeles (for rent-stabilized units). Check the city where the unit sits.

No statutory requirement. California does not require a separate account, escrow, or bond; the deposit simply remains the tenant's property held by the landlord.

AB 12 capped deposits at one month's rent effective July 1, 2024, ending the old two-month (unfurnished) and three-month (furnished) limits. AB 2801, phasing in during 2025, requires move-in and move-out photographs and bars deductions unless they are reasonably necessary and documented.

California landlords must offer the tenant a pre-move-out inspection during the final two weeks of tenancy, with written notice of that right, giving the tenant a chance to cure deficiencies before deductions are taken. AB 2801 makes photographs mandatory: shoot the unit at move-out before any repairs, again after repairs, and (for tenancies starting on or after July 1, 2025) at move-in — no photos, no valid deduction. Deductions are limited to unpaid rent, cleaning to the original level of cleanliness, and damage beyond normal wear and tear. Many rent-controlled cities layer on interest payments and stricter rules, so always check the local ordinance.

• Cal. Civ. Code § 1950.5