California

Security Deposit Amount

Landlords are limited to 1x monthly rent for security deposits for both unfurnished and furnished units unless they meet the below exception.

Exception: If a landlord (1) is a natural person or a limited liability company in which all members are natural persons and (2) owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent, they may collect up to 2x monthly rent for the security deposit.

The above limits include any pet deposits; a separate pet deposit cannot be charged on top of the maximum allowed.

Options for Holding

California state law does not mandate that landlords hold security deposits in a separate or interest-bearing account. However, landlords must handle the deposit in a way that ensures it can be returned promptly and in accordance with the law.

Notification Requirements

California law does not require landlords notify tenant as to where their security deposit is held.

Payment of Interest Earned

California state law does not require landlords to pay interest on security deposits. However, some local jurisdictions, such as San Francisco, Los Angeles, and Berkeley, do have local ordinances that require landlords to pay interest on deposits.

Timeline for Returning

The landlord must return the security deposit, along with an itemized statement of any deductions, within 21 days after the tenant vacates the property.

If deductions total less than $125, an itemized statement is not required.

Claims Process

If only part of the deposit is returned, the landlord must provide an itemized statement specifying the reasons for each deduction and include copies of receipts* for the work done, provided the deductions exceed $125.

• If the landlord or landlord’s employee did the work, the itemized statement shall reasonably describe the work performed. The itemized statement shall include the time spent and the reasonable hourly rate charged.
• If the landlord or landlord’s employee did not do the work, the landlord shall provide the tenant a copy of the bill, invoice, or receipt supplied by the person or entity performing the work. The itemized statement shall provide the tenant with the name, address, and telephone number of the person or entity, if the bill, invoice, or receipt does not include that information.
• If a deduction is made for materials or supplies, the landlord shall provide a copy of the bill, invoice, or receipt. If a particular material or supply item is purchased by the landlord on an ongoing basis, the landlord may document the cost of the item by providing a copy of a bill, invoice, receipt, vendor price list, or other vendor document that reasonably documents the cost of the item used in the repair or cleaning of the unit.

The landlord must furnish this information to the tenant via personal delivery or by first-class mail within 21 days after the tenant vacated the premises.

If a tenant disputes the amount of the security deposit returned or believes unlawful deductions were made, they can file a claim in small claims court for up to $10,000.

*If a repair to be done by the landlord or the landlord’s employee cannot reasonably be completed within 21 calendar days after the tenant has vacated the premises, or if the documents from a person or entity providing services, materials, or supplies are not in the landlord’s possession within 21 calendar days after the tenant has vacated the premises, the landlord may deduct the amount of a good faith estimate of the charges that will be incurred and provide that estimate with the itemized statement. If the reason for the estimate is because the documents from a person or entity providing services, materials, or supplies are not in the landlord’s possession, the itemized statement shall include the name, address, and telephone number of the person or entity. Within 14 calendar days of completing the repair or receiving the documentation, the landlord shall complete the requirements above in the manner specified.

Landlords in California may only deduct from the security deposit for:

Unpaid rent.

• Repairing damage to the property caused by the tenant or the tenant’s guests (beyond normal wear and tear).
• Cleaning the rental unit to return it to the same level of cleanliness as when the tenant moved in.
• Replacing or restoring personal property or appurtenances (fixtures) that were provided by the landlord and damaged or lost during the tenancy.

Wrongfully Withholding: If a landlord wrongfully withholds any portion of the security deposit, the tenant may be entitled to the amount wrongfully withheld plus up to two times that amount in damages.

Pre-Move-Out Inspection: Tenants have the right to request an initial inspection during the last two weeks of their tenancy. This inspection allows the tenant to identify potential deductions from the security deposit and gives them the opportunity to fix those issues before moving out.