Understanding Security Deposit Laws in California: A Guide for Landlords and Tenants
Security deposits are a fundamental part of the rental process, ensuring landlords have financial protection for potential damages while giving tenants a clear understanding of their responsibilities. In California, security deposit laws are strict and designed to protect both parties. Whether you’re a landlord or a tenant, understanding these laws is essential to avoid disputes and ensure compliance. Let’s break it down:
What Is a Security Deposit?
A security deposit is an upfront sum of money paid by a tenant to a landlord at the start of a lease. It’s held by the landlord to cover:
- Unpaid Rent
- Repairing Damage beyond normal wear and tear
- Cleaning Costs to restore the unit to move-in condition
Under California law, it’s not meant to be used for regular maintenance or upgrades to the property.
How Much Can a Landlord Charge?
California law limits how much landlords can collect for a security deposit:
- Unfurnished Rentals: Maximum of two months’ rent
- Furnished Rentals: Maximum of three months’ rent
- For Active Duty Service Members: Maximum of one month’s rent, regardless of the property type
These limits apply even if the landlord labels part of the deposit as a “pet deposit” or “cleaning fee.”
When Must a Security Deposit Be Returned?
Once a tenant moves out, landlords have 21 calendar days to:
- Return the deposit in full or,
- Provide an itemized statement of deductions and return any remaining balance.
What Must Be Included in the Statement of Deductions?
If deductions are made, landlords must include:
- An itemized list of deductions (e.g., $200 for carpet cleaning)
- Receipts or invoices for repairs exceeding $125
- Photos of the unit at move-in and move-out (required beginning July 1, 2025, for new leases)
Tenants should receive this statement via mail or email, depending on what’s outlined in the lease.
What Can a Landlord Deduct From a Security Deposit?
California law allows landlords to deduct only for specific, reasonable costs, including:
- Unpaid Rent
- Damages Beyond Normal Wear and Tear
- Example: Broken windows, holes in walls, or stained carpets
- Cleaning Costs
- To restore the unit to the condition it was in at move-in.
- Other Costs Outlined in the Lease
- For example, agreed-upon pet damage or lost keys.
Prohibited Practices for Landlords
- Using the Deposit for Regular Maintenance: Landlords cannot use the deposit to upgrade or renovate the property.
- Charging Nonrefundable Fees: Security deposits in California must always be refundable.
- Failing to Provide Documentation: Failure to document deductions could result in landlords being required to return the full deposit.
What Happens if the Landlord Fails to Return the Deposit?
If the landlord does not return the deposit or fails to provide proper documentation, tenants have the right to:
- File a complaint with the California Department of Consumer Affairs
- Take the landlord to Small Claims Court for up to $10,000
- Seek up to two times the amount of the deposit in penalties if the landlord is found to have acted in bad faith
How Can Tenants Protect Themselves?
- Document Move-In Condition: Take photos or videos of the property when moving in.
- Communicate Repairs: Inform landlords in writing about any damages during the lease term to avoid disputes.
- Request a Pre-Move-Out Inspection: California law allows tenants to request this inspection, giving them time to fix issues before vacating.
How Can Landlords Stay Compliant?
- Maintain Detailed Records: Keep photos, receipts, and itemized deductions to justify any deposit use.
- Educate Tenants: Ensure tenants understand what is and isn’t covered by the deposit.
- Follow Timelines: Return deposits or provide statements within 21 days to avoid penalties.
Upcoming Changes in 2025
Starting July 1, 2025, landlords will have additional requirements:
- Move-In Photos: Take and document the unit’s condition before the tenant moves in.
- Move-Out Photos: Capture the unit’s condition after possession is returned.
- These photos must be included with any deductions made from the security deposit.
Final Thoughts
Security deposits don’t have to be a source of conflict. Clear communication, detailed documentation, and understanding California’s laws are the keys to a smooth rental experience for both landlords and tenants.
If you’re a landlord or tenant in San Diego and need help navigating security deposit laws or other rental challenges, contact us at FBS Property Management. We’re here to make renting easier for everyone!
