Under the California security deposit law, a landlord can collect no more than one month’s rent as a security deposit on most residential rentals, whether the unit is furnished or unfurnished. That cap took effect July 1, 2024 under Assembly Bill 12, replacing the older limits of two months’ rent for unfurnished units and three months’ for furnished ones.1LegiScan. California Assembly Bill 12 (Prior Session Legislation) A tenant renting a $2,000-per-month apartment should now expect to pay $4,000 at move-in: first month’s rent plus a deposit equal to one month.
What Counts Toward the One-Month Cap
“Security” under the statute is broader than a single deposit check. It covers any payment, fee, deposit, or charge collected at the start of a tenancy to cover potential unpaid rent, cleaning, or damage. Pet deposits, move-in fees, and any amount labeled “last month’s rent” all count toward the one-month ceiling.1LegiScan. California Assembly Bill 12 (Prior Session Legislation) Renaming a charge does not take it outside the cap.
Monthly pet rent works differently. Because it is a recurring rent charge rather than a refundable lump sum held as security, it sits outside the deposit cap. A landlord may charge, say, $50 a month in pet rent on top of a full one-month deposit. A one-time “pet fee” collected at move-in, by contrast, is security and has to fit within the ceiling.
The Small Landlord Exception
AB 12 lets some smaller owners collect up to two months’ rent. To qualify, a landlord has to meet both conditions:
- The landlord is a natural person, a limited liability company whose members are all natural persons, or a family trust.
- The landlord owns no more than two residential rental properties, containing no more than four dwelling units in total offered for rent.
A single fourplex or two duplexes generally qualifies. Three separate rental houses do not, regardless of total unit count.1LegiScan. California Assembly Bill 12 (Prior Session Legislation) The two-month allowance does not apply when the tenant is an active-duty military service member; in that case the cap stays at one month even for otherwise-qualifying landlords.
Deposits Collected Before July 1, 2024
AB 12 is not retroactive. A deposit lawfully collected before July 1, 2024 stays legally held even if it exceeds one month’s rent. A tenant who paid two months’ rent as a deposit in 2023 cannot demand a partial refund on the basis of the new law alone.1LegiScan. California Assembly Bill 12 (Prior Session Legislation)
The cap takes effect when the tenancy changes. A lease renewed or extended after July 1, 2024 falls under the one-month limit going forward, and the landlord cannot increase the deposit above that. A pre-existing two-month deposit on a continuing month-to-month tenancy that has not been formally renewed does not have to be partially refunded under state law, though some cities have stricter local ordinances worth checking.
Getting the Deposit Back: The 21-Day Rule
Once a tenant moves out and returns the keys, the landlord has 21 calendar days to return the full deposit or send an itemized statement of deductions along with any remaining balance. The clock runs on calendar days, so weekends and holidays are included.2California Legislative Information. California Civil Code 1950.5
Deductions have to be documented. If the landlord or their employees did the work, the statement must describe the work, the time spent, and the hourly rate. For outside contractors, the landlord provides copies of bills, invoices, or receipts. When repairs cannot reasonably finish within 21 days, the landlord may send a good-faith estimate inside the deadline and follow up with final documentation once the work is complete.2California Legislative Information. California Civil Code 1950.5
Electronic Refunds Starting in 2026
AB 414 will require landlords to offer tenants the option of receiving their deposit refund electronically in certain situations beginning in 2026. It also clarifies how landlords should handle returns when multiple tenants share a lease and allows landlords and tenants to agree on alternative return arrangements. The 21-day deadline and the itemization requirements stay the same.
What a Landlord Can Deduct
Deductions are limited to three categories: unpaid rent, repairs for damage the tenant or their guests caused beyond normal wear and tear, and cleaning needed to restore the unit to the condition it was in at the start of the tenancy.2California Legislative Information. California Civil Code 1950.5
The wear-and-tear line drives most disputes. Faded paint, minor scuff marks, small nail holes from pictures, and carpet thinned by ordinary use all count as normal wear, and a landlord cannot charge for them. Holes punched in walls, broken fixtures, large stains, pet damage to flooring, and missing hardware are tenant-caused and deductible. The question is whether the condition came from ordinary living or from something the tenant did or failed to do beyond that.
A move-in checklist with dated photos protects both sides. It gives a tenant evidence against later claims of pre-existing damage and gives the landlord a documented baseline for the unit’s condition.
The Pre-Move-Out Inspection
Tenants have the right to ask for an initial inspection before moving out. The landlord conducts this walkthrough no earlier than two weeks before the tenancy ends and flags any issues that could lead to deductions. That gives the tenant a chance to fix problems and, potentially, get the full deposit back.2California Legislative Information. California Civil Code 1950.5 Tenants who skip this step give up their best chance to head off charges before they appear on an itemized statement.
Penalties When a Landlord Keeps the Deposit in Bad Faith
A landlord who retains a deposit, in whole or part, in bad faith can be ordered to pay statutory damages of up to twice the deposit on top of actual damages. Under Civil Code Section 1950.5, the burden falls on the landlord to show that any deductions were reasonable.2California Legislative Information. California Civil Code 1950.5
Bad faith is more than an honest mistake or a legitimate dispute over damage. It covers fabricated charges, ignoring the 21-day deadline outright, or holding the deposit with no itemization at all. Courts can award the penalty when the facts support it, even if the tenant did not specifically request statutory damages.
Most deposit disputes end up in small claims court, where individuals can sue for up to $10,000. Filing fees are modest and no attorney is required, which usually makes small claims the fastest path to recovery when the amount at stake is under that limit.
Protections for Active-Duty Service Members
Service members get protections that go beyond the one-month cap. The federal Servicemembers Civil Relief Act bars a landlord from seizing or withholding a security deposit to cover rent that accrues after a service member lawfully terminates a lease under the SCRA. A landlord who knowingly violates that rule faces criminal penalties, including fines and up to one year of imprisonment. The SCRA still allows reasonable deductions for actual damage beyond normal wear, but it prohibits penalizing a service member financially for exercising the right to break a lease on military orders.
Section 8 Voucher Holders
Tenants using Housing Choice Vouchers are covered by the same one-month state cap. Federal rules add a second constraint: the local Public Housing Agency can prohibit deposits that exceed what the landlord charges unassisted tenants or what is typical in the local private market.3eCFR. Part 982 Section 8 Tenant-Based Assistance: Housing Choice Voucher Program In effect, a landlord cannot charge a voucher holder more than a market-rate tenant would pay. The PHA generally does not pay the deposit on the tenant’s behalf, so voucher holders still need to budget for it at move-in.