AB 93 California: Security Deposit Cap, Deductions, and 21-Day Return

Under California security deposit law, a landlord can collect no more than one month’s rent as a security deposit on most residential rentals, and must return that money, minus any itemized deductions, within 21 days after you move out. The one-month cap took effect July 1, 2024, under Assembly Bill 12, and it applies whether the unit is furnished or unfurnished. The rules on deductions, timing, and penalties come from California Civil Code Section 1950.5.

How Much a Landlord Can Charge

Before AB 12, California landlords could collect up to two months’ rent on an unfurnished unit and three months’ rent on a furnished one. That distinction is gone. For any deposit collected on or after July 1, 2024, the ceiling is one month’s rent regardless of furnishing.¹

The cap covers every dollar the landlord holds as security, no matter what it is called. A pet deposit, cleaning deposit, key deposit, or any similar upfront charge all count toward the same one-month limit.¹ At move-in, then, you should expect to pay first month’s rent plus a security deposit of no more than one month’s rent, and nothing beyond that.²

Last Month’s Rent

Landlords sometimes ask for a separate payment labeled “last month’s rent.” If that payment functions as security the landlord holds until the tenancy ends, it counts against the one-month cap. A landlord cannot collect a full month as a security deposit and another full month for last month’s rent on top of it.²

The law does allow a tenant and landlord to agree on an advance rent payment of six months or more, so long as the lease term is at least that long. Because that money is treated as rent rather than security, it falls outside the cap. This arrangement is uncommon but can matter on longer leases.

The Small Landlord Exception

A narrow exception lets certain small owners collect up to two months’ rent as a deposit. Both conditions must be met:

The owner is a natural person, a limited liability company where every member is a natural person, or a family trust.³
The owner holds no more than two residential rental properties with a combined total of no more than four dwelling units offered for rent.³

Corporate landlords, real estate investment trusts, and anyone owning a five-unit building cannot use this exception. And even qualifying small landlords lose it when the prospective tenant is an active member of the U.S. military or California’s active militia. For service members, the cap stays at one month’s rent.³

What Happens to Existing Deposits

The law is not retroactive. If your landlord lawfully collected two or three months’ rent before July 1, 2024, that money can stay put. There is no requirement to refund the excess mid-tenancy.¹

The cap applies to the next tenant. When you move out and a new renter signs a lease, the incoming deposit is limited to one month’s rent (or two under the small landlord exception). If you renew after the effective date, the landlord cannot demand additional security that pushes your total above the new ceiling.

What Can Be Deducted

California limits deductions to four categories:

Unpaid rent you still owe when you vacate.
Cleaning costs to return the unit to the level of cleanliness it was in when you moved in.
Repairs for damage you or your guests caused that goes beyond ordinary wear.
Restoring or replacing furniture and furnishings in a furnished rental, if the lease covers those items and the damage exceeds normal wear and tear.

Landlords cannot deduct for repainting walls that faded over a multi-year tenancy, replacing carpet worn down by regular foot traffic, or fixing minor scuffs from everyday living. Those costs stay with the property owner.⁴

Normal Wear and Tear Versus Damage

Most deposit disputes turn on this line. Normal wear and tear is the gradual deterioration that comes from living in a space: paint fading in sunlight, small nail holes from hanging pictures, slight carpet discoloration over the years, loose grout in an aging bathroom. A landlord cannot charge you for any of it.

Tenant damage results from misuse or neglect. Large holes punched or drilled into walls, deep gouges in hardwood from dragging furniture without pads, burned or heavily stained carpet, and appliances broken through improper use are all fair game. The question is whether the condition goes beyond what would happen from ordinary, reasonable use during the tenancy.

The 21-Day Return Rule

After you move out, the landlord has 21 days to either return your full deposit or send you what remains along with an itemized statement of every deduction.⁴ The clock starts when you vacate and return the keys, not when the lease formally ends.

The itemized statement has teeth. If total deductions exceed $125, the landlord must attach copies of receipts or invoices for the work. If the landlord or an employee did the repairs, the statement must describe the work, the time spent, and the hourly rate. A vague line like “cleaning: $400” with no backup does not meet the requirement.⁴

Missing the 21-day deadline or skipping the documentation is one of the fastest ways for a landlord to lose a deposit case in court.

Request a Pre-Move-Out Inspection

California gives tenants a tool that many overlook: the right to a walkthrough before moving out. Once either side gives notice that the tenancy is ending, the landlord must tell you in writing that you can request this initial inspection. If you ask, the landlord must schedule it no earlier than two weeks before your move-out date, with at least 48 hours’ written notice of the specific date and time.⁵

During the walkthrough, the landlord identifies anything that could lead to a deduction. The point is to give you a chance to fix problems before the final inspection. Scuffed walls you can repaint, a dirty oven you can scrub, a stained carpet you can clean: address them now and keep the money.

Penalties and How to Recover Your Deposit

A landlord who demands more than the legal limit, withholds a deposit in bad faith, or fails to provide a proper itemized statement faces real consequences. If a court finds bad faith, the tenant can recover up to twice the amount of the security deposit as statutory damages, on top of the actual amount wrongfully withheld.⁵

So if a landlord wrongfully keeps a $2,000 deposit, a court could order return of that $2,000 plus another $4,000 in statutory damages. The landlord also carries the burden of proving that any deductions were reasonable, not the tenant. That shift makes these cases more favorable to tenants than most other civil disputes.⁵

Most tenants file in small claims court, which handles security deposit cases as long as the amount sought is within its jurisdictional limit.⁵ You do not need a lawyer, filing fees are modest, and for a wrongfully withheld deposit it is usually the most efficient route.

Interest on Deposits

State law does not require landlords to pay interest on deposits held during your tenancy. Some rent-controlled cities impose their own interest requirements, so tenants in places like Los Angeles, San Francisco, or Berkeley should check local ordinances. Outside those local rules, a landlord can hold your deposit for years and owe you nothing in interest.

1
LegiScan. California Assembly Bill 12 – Tenancy: Security Deposits
2
Berkeley Rent Board. Important Changes to Security Deposit Law
3
California Apartment Association. New Law Limiting Security Deposits in Effect as of July 1
4
California Judicial Branch. Guide to Security Deposits in California
5
California Legislative Information. California Civil Code 1950.5