CA Security Deposit FAQ: 20 Answers for Landlords (2026)

Under AB 12 (effective July 1, 2024), most California landlords can charge a maximum of 1 month’s rent as a security deposit. Small landlords who own 2 or fewer residential properties with a combined total of 4 or fewer units may charge up to 2 months’ rent. This applies regardless of whether the unit is furnished or unfurnished — AB 12 eliminated the old furnished/unfurnished distinction for most landlords.

No. In California, a pet deposit is part of the total security deposit and counts toward the AB 12 cap. Additionally, California does not allow non-refundable pet fees or non-refundable deposits of any kind — all money collected as a deposit must be refundable. Pet rent (a monthly recurring charge) is separate from the deposit and is legal, but it cannot be disguised as a deposit or used to circumvent the cap.

First month’s rent is not a deposit — it is rent and does not count toward the cap. However, last month’s rent counts as part of the security deposit under California law. So if you charge last month’s rent ($2,500) plus a security deposit ($2,500), you’ve collected $5,000 in deposits — which exceeds the 1-month cap for standard landlords. A small landlord (with the 2-month exemption) could legally collect both, but standard landlords cannot.

California does not require landlords to hold security deposits in a separate account. Unlike states such as New York, Illinois, or Maryland, California law does not mandate a segregated trust account or interest payments on deposits. However, keeping deposits in a separate account is strongly recommended as a best practice — it makes accounting cleaner and ensures the money is available when it’s time to return it.

California Civil Code §1950.5(b) allows exactly four categories of deductions: (1) unpaid rent owed at the time of move-out, (2) cleaning to restore the unit to the condition it was in at move-in (beyond normal use), (3) repair of damage caused by the tenant, their guests, or pets (beyond normal wear and tear), and (4) restoration of furnished units to their original condition per the inventory. No other deductions are permitted.

Only to restore the unit to the condition it was in at move-in, accounting for normal wear. If the unit was not professionally cleaned before the tenant moved in, you cannot charge for professional cleaning at move-out. If the tenant left the unit reasonably clean (comparable to move-in condition), you cannot deduct for cleaning. Deductions are only appropriate when the unit requires cleaning beyond what normal use would necessitate.

Yes, for deductions exceeding $126 (which is 2x the current small claims court filing fee). Civil Code §1950.5(g)(2) requires landlords to include copies of receipts or invoices for any repair or cleaning work that exceeds this threshold. For amounts under $126, an itemized description is sufficient. If the work has not yet been completed, you may provide a good faith estimate with the initial statement and must send final receipts within 14 days of completion.

Only if the tenant caused damage beyond normal wear and tear. Fading, minor scuffs, and small nail holes are considered normal wear. If the tenant lived in the unit for 3 or more years, courts generally consider repainting to be expected maintenance regardless of the wall condition. You can deduct for painting if the tenant caused unusual damage such as large holes, smoke staining, crayon or marker, or unauthorized paint colors — but only for the cost to repair the damaged areas, not a full-unit repaint.

Returning the deposit after the 21-day deadline exposes you to penalties of up to 2x the deposit amount plus the tenant’s reasonable attorney fees. There is no grace period — even one day late triggers the full penalty. Courts presume bad faith if no itemized statement is provided within the deadline. For a $2,500 deposit, total exposure can reach $8,000–$13,000 including attorney fees. See the full penalty breakdown for detailed scenarios.

Most deposit disputes are filed in small claims court. Individuals can sue for up to $12,500, while businesses (LLCs, corporations) are limited to $6,250. No attorneys are allowed in small claims court — both parties represent themselves. The process typically takes 30–60 days from filing to hearing. If the claim exceeds small claims limits, the tenant can file in civil court where attorney fee awards make the case significantly more expensive for the landlord.

It depends on the circumstances. You can deduct unpaid rent and damages from the deposit, but you must still return the remaining balance within 21 days with an itemized statement. If the tenant broke the lease early, you can deduct rent owed through the end of the notice period (or until a new tenant moves in, whichever comes first — California requires landlords to mitigate damages by re-renting). You cannot simply keep the entire deposit as a penalty for breaking the lease.

You must still follow the 21-day return rule after determining abandonment per Civil Code §1951.2. The 21-day clock starts when you legally establish that the tenant has abandoned the unit (typically after serving a Notice of Belief of Abandonment and waiting the required period, or when the tenant’s lease expires and they have clearly vacated). Mail the deposit and itemized statement to the tenant’s last known address. Do not assume abandonment allows you to keep the deposit without documentation.