California Security Deposit Laws: Limits, Deductions, and Deadlines

California recently overhauled the rules on how much a landlord can collect up front. The change, made by AB 12, lowered the security deposit cap to one month of rent for most new tenancies and reshaped what landlords can ask for before a tenant moves in.

The New Security Deposit Cap Under AB 12

Before July 1, 2024, landlords could charge up to two months of rent for an unfurnished unit and three months for a furnished one. AB 12 cut that to one month of rent for new tenancies, whether the unit is furnished or not. The cap applies to any money collected beyond the first month of rent, no matter what it is called, including cleaning fees, last month of rent, or pet deposits.

The 21-Day Return Deadline

Under Civil Code section 1950.5, a landlord must return the deposit, or the balance after lawful deductions, within 21 calendar days of the tenant moving out and returning keys. The landlord must include an itemized written statement of all deductions. Missing this deadline can cost the landlord the right to keep any portion of the deposit.

What a Landlord Can Legally Deduct

Civil Code section 1950.5 limits deductions to unpaid rent, cleaning needed to restore the unit to its move-in condition, repair of damage beyond normal wear and tear caused by the tenant, and replacement of personal property named in the rental agreement. Normal wear and tear, such as minor scuffs, small nail holes, and faded paint, cannot be charged.

Consequences of Bad-Faith Withholding

If a court finds the landlord kept the deposit in bad faith, it may award the tenant two times the wrongfully withheld amount on top of the actual deposit, plus court costs. These claims can be filed in small claims court without an attorney.