Last updated: August 4, 2026
California Security Deposit Laws 2026: 1-Month Cap + Penalties
Since July 1, 2024, California’s AB 12 limits security deposits to one month’s rent for most residential rentals. Landlords have exactly 21 calendar days to return the deposit with an itemized statement. Late returns can result in penalties of up to twice the deposit amount plus the tenant’s attorney fees. Only four deductions are legal: unpaid rent, cleaning, damage beyond normal wear and tear, and furnished unit restoration.
Key Takeaways
- AB 12 caps deposits at 1 month’s rent since July 2024 (was 2–3 months)
- Small landlords (2 units, owner-occupied) exempt — can still collect 2 months
- 21 calendar days to return deposit after move-out — no exceptions
- Only 4 legal deductions: unpaid rent, cleaning, damage beyond wear, furnished restoration
- Late return penalty: up to 2x deposit + attorney fees
- Pre-move-out inspection required if tenant requests
How Much Can You Charge
AB 12, signed into law in 2023 and effective July 1, 2024, amended California Civil Code §1950.5 to cap security deposits at one month’s rent for most residential rentals — regardless of whether the unit is furnished or unfurnished. This replaced the previous limits that allowed up to 2 months’ rent for unfurnished units and 3 months’ rent for furnished units.
| Property Type | Before July 2024 | After July 2024 (AB 12) |
|---|---|---|
| Unfurnished rental | 2 months’ rent | 1 month’s rent |
| Furnished rental | 3 months’ rent | 1 month’s rent |
| Small landlord exemption (2 units, owner-occupied) | 2–3 months’ rent | 2 months’ rent |
California Civil Code §1950.5(c), as amended by AB 12 (2023, Chapter 733). The small landlord exemption applies only to natural persons who own no more than two residential rental properties containing a total of no more than four dwelling units, and who occupy one of the units as their principal residence.
The 21-Day Return Rule
California Civil Code §1950.5(g) requires landlords to return the security deposit — or provide an itemized statement of deductions — within 21 calendar days after the tenant moves out. There are no extensions, no grace periods, and no exceptions for weekends or holidays.
Tenant moves out
Move-out occurs when the tenant returns keys, the notice period expires, or the lease terminates — whichever is latest. The 21-day clock starts on this date.
Inspect and document
Photograph the unit, compare against move-in condition report, and obtain repair estimates or invoices. Receipts are required for any deduction over $126.
Prepare itemized statement
List each deduction with a description, amount, and supporting documentation. Attach copies of receipts or invoices for work done. If repairs are not yet complete, provide a good-faith estimate and follow up with actual costs within 14 days.
Mail or deliver within 21 days
Send the remaining deposit balance and the itemized statement to the tenant’s last known address or forwarding address. First-class mail is sufficient, but certified mail provides proof of delivery.
21 calendar days means 21 calendar days. If the tenant moves out on August 1, the deposit and statement must be delivered or postmarked by August 22. Mailing on day 22 is a violation.
4 Legal Deductions
Civil Code §1950.5(b) limits security deposit deductions to exactly four categories. Deducting for anything else is a violation — even if the lease says otherwise.
Deduction 1
Unpaid Rent
Any rent owed at the time of move-out, including the final month if not prepaid. The amount must match the lease terms and any applicable rent cap. If the tenant paid last month’s rent as a separate payment at move-in, that is not part of the security deposit and cannot be counted here.
Deduction 2
Cleaning
Cleaning costs to restore the unit to the condition it was in at move-in — not better. If the unit was not professionally cleaned before the tenant moved in, you cannot deduct for professional cleaning at move-out. Document move-in condition with dated photos.
Deduction 3
Damage Beyond Normal Wear and Tear
Repair of damage caused by the tenant that goes beyond normal, expected deterioration. Examples: large holes in walls (deductible), small nail holes and faded paint (wear and tear). Broken window from a thrown object (deductible), worn carpet from foot traffic (wear and tear). The landlord bears the burden of proof.
Deduction 4
Restoration of Furnished Units
If the rental was furnished, deductions may cover the cost of restoring or replacing landlord-provided furniture and appliances damaged by the tenant beyond normal use. This does not include replacement of items that wore out through ordinary use over time.
What You Cannot Deduct
These are the most common deduction mistakes California landlords make. Every item below is considered normal wear and tear or is otherwise prohibited:
- Repainting walls — unless the tenant caused actual damage (drawings, large stains, unauthorized colors). Minor scuffs and faded paint are wear and tear.
- Carpet replacement — unless the tenant caused damage (burns, stains, pet damage). Worn carpet from normal foot traffic is wear and tear. IRS depreciates carpet over 5–7 years.
- Appliance aging — appliances that stopped working due to age, not tenant misuse, cannot be deducted.
- Pre-existing damage — anything documented in the move-in inspection report cannot be charged to the tenant.
- Normal wear and tear — small nail holes, minor scuffs on hardwood, loose door handles, worn weather stripping, faded curtains.
- Upgrades or improvements — you cannot use the deposit to fund unit upgrades, even if done during the turnover.
Warning: Deducting for normal wear and tear is the most common reason landlords lose security deposit lawsuits. Courts consistently rule against landlords who deduct for painting, carpet, or appliance issues that result from ordinary use over time.
Pre-Move-Out Inspections
Civil Code §1950.5(f) requires landlords to offer tenants a pre-move-out inspection — a walk-through of the unit conducted no earlier than two weeks before the lease ends. The purpose is to identify issues the tenant can repair before move-out to avoid deposit deductions.
How It Works
- Written notice required: The landlord must notify the tenant in writing of their right to request a pre-move-out inspection. This notice should be included with or shortly after the termination or move-out notice.
- Tenant must request it: The inspection only happens if the tenant asks. The landlord cannot force a walk-through.
- Timing: The inspection must occur no earlier than 2 weeks before move-out and no later than the actual move-out date.
- Itemized list: During the inspection, the landlord provides an itemized statement of repairs or cleaning needed to avoid deductions.
- Tenant can fix issues: The tenant has until the end of the tenancy to make the identified repairs.
Failure to offer the inspection in writing may limit your ability to make deductions. Courts have found that landlords who skip this step act in bad faith, weakening their position if the tenant disputes deductions.
Penalties for Violations
Late Return (Beyond 21 Days)
The tenant can sue for up to 2x the deposit amount plus actual damages and attorney fees. Courts have broad discretion and regularly award the maximum penalty when the delay is unjustified.
Bad Faith Deductions
If deductions are made in bad faith — for items that are not legally deductible or for inflated amounts — the tenant can recover actual damages plus up to 2x the deposit. The landlord also pays the tenant’s attorney fees.
No Itemized Statement
Failure to provide the required itemized statement within 21 days creates a presumption of bad faith. The burden shifts to the landlord to prove that deductions were legitimate.
Failure to Offer Pre-Move-Out Inspection
While not an automatic forfeiture, failing to offer the inspection in writing may limit your right to deduct for items the tenant could have repaired. Courts weigh this heavily in bad faith determinations.
Security Deposit Calculator
Calculate your maximum deposit, return deadline, and penalty exposure. Enter your rent amount and property details. Free, no signup required.
Pet Deposits & Pet Fees
California law treats pet deposits as part of the total security deposit. There is no separate allowance for a “pet deposit” on top of the one-month cap.
Pet Deposit
Counts toward the 1-month total deposit cap. Not a separate charge.
Non-Refundable Pet Fee
Not allowed in California. All deposits must be refundable.
Monthly Pet Rent
Legal and separate from the deposit. Not subject to the deposit cap.
Note: Service animals and emotional support animals are not pets under California law. You cannot charge any pet deposit, pet fee, or pet rent for a tenant with a verified service or support animal.
Frequently Asked Questions
Can I charge first and last month’s rent plus a security deposit?
No. AB 12 caps the total security deposit at one month’s rent. Last month’s rent is a separate payment and is still allowed, but the security deposit itself cannot exceed one month. So you can collect first month’s rent + last month’s rent + one month security deposit at move-in — but the deposit portion is capped at one month.
What’s the penalty for returning the deposit late?
Up to two times the deposit amount plus the tenant’s attorney fees. Courts presume bad faith if no itemized statement is provided within 21 days. Even a few days late can trigger the full penalty. The best protection is to mail the statement and any refund well before the deadline.
Can I deduct for professional cleaning?
Only to restore the unit to the condition it was in at move-in. If the tenant left the unit reasonably clean, you cannot deduct for routine or deep cleaning. If the unit was not professionally cleaned before the tenant moved in, you cannot charge for professional cleaning at move-out. Always document move-in condition with dated photographs.
Written by Rachid Abadli
Sacramento-based landlord and founder of LeaseBase
This guide is based on California Civil Code §1950.5, AB 12 (2023, Chapter 733), and related statutory provisions governing security deposits in California. Last verified against the California Legislative Information database on August 4, 2026.
Security Deposit Resources
Security Deposit Calculator
Calculate your maximum deposit, return deadline, and penalty exposure.
Calculate now →Deposit Return Letter Template
Free itemized statement template with correct statutory language.
Get template →Deductions Guide
What you can and cannot deduct, with photo examples and court precedents.
Read the guide →AB 1482 Rent Cap Guide
Rent caps, just cause eviction, exemptions, and compliance for California landlords.
Read the guide →CA Landlord Compliance Checklist
Every law, deadline, and form California landlords need in 2026.
Read checklist →California Eviction Guide
Step-by-step eviction process, notices, timelines, and legal requirements.
Read the guide →Move-In Checklist
Document unit condition at move-in to protect your deposit deductions later.
Get checklist →Compliance Engine
Automated compliance checks for deposits, notices, and deadlines across your portfolio.
Check compliance →Never miss a deposit deadline again
LeaseBase™ tracks your 21-day return deadlines, generates itemized statements, and keeps your deposit records compliant automatically.
30-day free trial. Cancel anytime.
This guide is for informational purposes only and does not constitute legal advice. Security deposit rules, return timelines, and penalty provisions vary by jurisdiction and change periodically. Consult a qualified California real estate attorney for guidance on your specific situation.