California has some of the strictest security deposit rules in the country, and they got stricter with AB 12, which took effect July 1, 2024. If you are a landlord in California, you need to know these rules exactly — mistakes can lead to penalties of up to twice the deposit amount, plus attorney fees.

Here is every rule that matters for California landlords in 2026, based on California Civil Code Sections 1950.5 through 1950.7.

Maximum Deposit Amounts

As of July 1, 2024, California limits security deposits to one month's rent for most residential landlords — regardless of whether the unit is furnished or unfurnished. This was a significant change from the previous law, which allowed up to two months' rent for unfurnished units and three months' rent for furnished units. The new limit applies to most landlords, with a narrow exception for small landlords who own no more than two residential rental properties with a combined total of no more than four units, where one month's rent is less than a certain threshold. In practice, the one-month cap applies to the vast majority of California landlords.

Return Timeline and Itemized Statement

You have 21 calendar days after the tenant vacates to either return the full deposit or provide an itemized statement of deductions along with the remaining balance. The itemized statement must include: a description of each deduction, the amount of each deduction, and receipts for completed repairs. If repairs are not yet complete, you can send a good-faith estimate, but you must then provide actual receipts and any remaining balance within 14 days after the work is done.

For any single deduction over $125, you must include either the receipt, the invoice, or a good-faith estimate with the name, address, and phone number of the contractor. Failure to provide the itemized statement within 21 days can result in the landlord losing the right to make any deductions and being liable for up to twice the deposit amount in bad-faith cases.

Allowable Deductions

California law allows deductions for four categories only: unpaid rent, cleaning the unit to return it to the condition at move-in (minus normal wear and tear), repair of damage caused by the tenant beyond normal wear and tear, and restoration of personal property if the lease allows it. You cannot deduct for normal wear and tear — things like minor scuff marks on walls, worn carpet from normal use, or faded paint. The line between "damage" and "wear and tear" is a common source of disputes, which is why move-in and move-out photos are essential.

Move-In and Move-Out Inspections

California landlords are required to offer the tenant a pre-move-out inspection within the last two weeks of the tenancy. This inspection gives the tenant a chance to fix issues before moving out, potentially avoiding deductions. You must give the tenant at least 48 hours' written notice of the inspection date and time. While the tenant can decline the inspection, you must offer it — failure to do so weakens your position in a deduction dispute.

Practical Tips for California Landlords

Always document unit condition with timestamped photos at move-in and move-out. Keep deposits in a readily accessible account — California does not require a separate trust account, but the funds must be available for return. Use a written move-in checklist signed by both parties. Set a calendar reminder for the 21-day return deadline the moment a tenant gives notice. And if you are withholding any amount, err on the side of detailed documentation — California courts tend to favor tenants in ambiguous deposit disputes.

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Frequently Asked Questions

What is the maximum security deposit in California in 2026?

As of July 1, 2024, California limits security deposits to one month's rent for unfurnished units and two months' rent for furnished units — for most landlords.

How long does a California landlord have to return a security deposit?

21 days after the tenant vacates. You must provide an itemized statement of deductions with receipts or estimates for any work costing over $125.