California security deposit law

You may not demand or receive security, however it is labeled, of more than one month's rent, in addition to any rent for the first month paid on or before move-in. Security means any payment, fee, deposit or charge imposed at the start of the tenancy to cover the cost of processing a new tenant or as an advance payment of rent, used for any purpose, so a pet deposit or a move-in fee counts toward the limit; an application screening fee does not.

Cal. Civ. Code § 1950.5(b), (c)

• A landlord who is a natural person, or a limited liability company whose members are all natural persons, and who owns no more than two residential rental properties with no more than four dwelling units offered for rent in total, may take up to two months' rent. A settlor or beneficiary of a family trust counts as a natural person. Cal. Civ. Code § 1950.5(c)(5)(A), (C)
• The two-month limit never applies to a prospective tenant who is a service member, and you may not refuse to rent to a service member because of that. Cal. Civ. Code § 1950.5(c)(5)(B)
• If you charge a service member more than your standard or advertised security because of credit history, credit score, housing history or a similar factor, give a written statement of the higher amount and the reason on or before the date the lease is signed, put the return date in the lease, and return the extra after no more than six months of residency if the tenant is not behind on rent. Cal. Civ. Code § 1950.5(c)(4)
• An advance payment of at least six months' rent on a lease of six months or longer is outside the limit. Cal. Civ. Code § 1950.5(c)(2)
• The lease may not call any security nonrefundable. Cal. Civ. Code § 1950.5(n)
• The limit does not apply to security collected or demanded before July 1, 2024. Cal. Civ. Code § 1950.5(c)(6)

No later than 21 calendar days after the tenant has moved out, give the tenant an itemized statement of the security received and how it was used, and return the rest. You may deduct only what is reasonably necessary for unpaid rent, damage beyond ordinary wear and tear, cleaning back to the condition at move-in, and the other purposes the section allows.

Cal. Civ. Code § 1950.5(b), (e), (h)(1)

• Subject to the multiple-adult-tenant rules, if you received security or rent electronically, return the remainder to the account the tenant designates in writing, or by an available electronic method the tenant agrees to in writing, unless you agree in writing on another return method. Give written notice of this right within a reasonable time after either side's termination notice or before the lease ends, except where a different method was already agreed in writing or the specified CCP1161(2)-(4) termination exception applies. A successor's electronic-return duty depends on receiving rent electronically from that tenant. Cal. Civ. Code § 1950.5(h)(1)(A)(ii)
• Otherwise use personal delivery or a check mailed first class, postage prepaid. With multiple adult occupants, the default refund check names all adults on the rental agreement when the tenancy ends, and the statement goes to one adult selected by the landlord. An agreement signed by the landlord and every adult tenant may specify recipients, allocation percentages, payment method and each adult's statement delivery/address. Section1950.5(h)(1)(C)(iii) separately permits another disbursement on a qualifying1946.7 terminating tenant's request where no such mutual agreement exists. Cal. Civ. Code § 1950.5(h)(1)(A)(i), (C)
• With the statement, include copies of documents for repair and cleaning charges: for your own or your employee's work, a description with the time spent and the hourly rate; for anyone else's work and for materials, the bill, invoice or receipt; plus the photographs of the unit. You may skip this when repair and cleaning deductions together are $125 or less, unless the tenant asks for the documents within 14 calendar days after receiving the statement. A timely tenant request requires compliance within 14 calendar days after receipt. A documentation waiver has specific timing, signature and text conditions; it does not remove a later timely request right. Cal. Civ. Code § 1950.5(h)(2), (h)(4), (h)(5)
• You may not deduct for damage or defects that existed before the tenancy or for ordinary wear and tear. Cal. Civ. Code § 1950.5(e)(2)
• A landlord who in bad faith fails to comply with these return duties may not claim any of the security, and bad faith retention can bring statutory damages of up to twice the amount of the security on top of actual damages. Cal. Civ. Code § 1950.5(h)(7), (m)
• A good-faith estimate is available when a repair cannot reasonably be completed within 21 calendar days or supporting third-party documents have not arrived. State the estimate in the timely itemization and identify the outside provider when documents are missing. Complete the required accounting and documents within 14 calendar days after completing the repair or receiving the documentation; the estimate does not cancel the original closeout deadline. Cal. Civ. Code § 1950.5(h)(3)-(5)
• Preserve the starting condition, resident comments, dated photographs, actual work and reasonable charge calculation. Professional cleaning must be reasonably necessary to restore the initial condition, excluding ordinary wear. A lease fee label, blanket carpet-cleaning charge or replacement invoice alone does not establish that the resident owes it. Give a disputed item its own factual review; damages above the deposit still require a lawful basis and proof. Cal. Civ. Code § 1950.5(b), (e)(2), (m)
• Send the itemized statement by personal delivery or prepaid first-class mail unless the permitted agreement changes delivery; email requires mutual agreement and an account supplied by the tenant. Check the multiple-adult rules separately. For required mailings, use the tenant's supplied address, or the vacated unit if none was supplied. Keep a delivery and refund record rather than treating a generated statement as completed delivery. Cal. Civ. Code § 1950.5(h)(1)(B)-(C), (h)(6)

State landlord and tenant law does not require a landlord to pay interest on a security deposit or to keep it in a separate account. The security is held for the tenant, and the tenant's claim to it comes before the claim of any of your creditors.

Cal. Civ. Code § 1950.5(d)

• When your interest in the property ends, for example on a sale, you must within a reasonable time either transfer the security to your successor and notify the tenant, or return it to the tenant after deducting lawful claims. Cal. Civ. Code § 1950.5(i)
• Check city rules separately. For San Francisco, Administrative Code49.2 requires simple interest on deposits held at least one year, with an exception where rent is government-assisted or subsidized. It provides annual payment or rent credit and qualifying move-out prorated interest within two weeks; authorized withholding and fee-recovery provisions have their own limits. Use the applicable Rent Board rate for the due date or move-out date. This city example does not establish a statewide rate or another city's requirements. San Francisco Administrative Code § 49.2

For a tenancy that begins on or after July 1, 2025, you must photograph the unit immediately before, or at the start of, the tenancy. You must also photograph it within a reasonable time after it is returned to you, before any repair or cleaning you will deduct for, and again after that work is done.

Cal. Civ. Code § 1950.5(g)

• Within a reasonable time after either side gives notice to end the tenancy, or before the lease ends, tell the tenant in writing that the tenant may request an initial inspection and be present for it. If asked, inspect no earlier than two weeks before the tenancy ends, with at least 48 hours' written notice unless you both sign a waiver, so the tenant can fix problems and avoid deductions. Cal. Civ. Code § 1950.5(f)(1)
• The initial-inspection duties do not apply to terminations under CCP1161(2), (3) or (4). For a requested inspection, follow the scheduling, written notice and any signed waiver rules. Provide or leave the proposed repair/cleaning itemization with the required statutory text, and allow the resident to remedy identified issues before termination. Later damage and conditions hidden by possessions have separate treatment; the preliminary list is not permission for unsupported final charges. Cal. Civ. Code § 1950.5(f)(1)-(7)