California security deposit law

Start with the amount and the tenancy

For new deposits under the rules effective July 1, 2024, the California DRE 2026 handbook describes a general limit of 1 month's rent, furnished or unfurnished. Qualifying small owners may require up to 2 months, subject to all ownership conditions. A service member renting from a qualifying small landlord remains subject to the one-month restriction described in the guide (printed pages 35–37).

The small-owner exception involves natural people or LLCs owned by natural people, no more than 2 residential rental properties and no more than 4 rental units in total. It is not an automatic exception for anyone calling themselves a small landlord.

This illustration assumes the stated coverage. It does not determine how an older deposit collected before July 2024 must be treated. Deposits cannot be designated nonrefundable; the returned balance depends on lawful deductions.

The move-out accounting

DRE and California Courts describe 21 days after move-out to return the deposit or provide the required accounting and remaining balance. Deductions need a factual basis: unpaid rent, necessary cleaning to restore the original cleanliness, damage beyond ordinary wear, or certain agreed restoration of personal property. A tenancy ending does not make routine wear chargeable.

Record each proposed deduction, what happened, its cost and the supporting documents. Requirements differ for owner/employee work, outside contractors and materials. The deposit return letter tool organizes an accounting; it cannot decide whether a deduction is allowed.

Where qualifying work cannot reasonably finish or an outside invoice is unavailable, the handbook permits a good-faith estimate with the timely statement and remaining refund. It describes final accounting within 14 calendar days after completion or receipt of the invoice, as applicable. An estimate is not permission to hold the entire deposit indefinitely (printed pages 76–78).

Digital refunds changed in 2026

Beginning January 1, 2026, DRE says a digital refund is required if the tenant paid the deposit or any rent payment digitally, unless the parties agree in writing to an alternative. This rule is broader than checking how the original deposit was paid. The guide identifies AB 414 in its 2026 changes and discusses payment on printed pages 36 and 77.

Keep the refund method separate from the method for delivering the itemized statement. An agreement to receive a statement by email and an agreement about payment are different records. For multiple tenants, verify the payees and any required agreement instead of selecting one roommate automatically.

Photographs support the condition record

See printed pages 37, 77 and 80 for photographs and their delivery with an accounting. The guide also describes notice of the right to request a pre-move-out inspection, with exceptions and scheduling requirements. Compare the initial and final condition instead of relying on an unsupported repair label.

If the accounting is disputed

Keep the lease, payment records, photographs, accounting and correspondence. State which deduction or missing refund you dispute and why. Our editable request letter and the California Courts demand-letter resource can help organize that request. A requested response date is not automatically a statutory deadline. Do not assume additional damages are automatic.

Questions, answered