Security deposits are one of the most common sources of conflict between California landlords and tenants. A landlord may have a valid reason for withholding part of a deposit, but a missed deadline, unsupported charge, or incomplete notice can still create legal problems.
California landlords should understand the rules before collecting a deposit and document the rental’s condition throughout the tenancy.
How Much Can a California Landlord Charge?
According to California Civil Code Section 1950.5, most residential landlords may collect no more than one month’s rent as a security deposit. This limit applies whether the unit is furnished or unfurnished. The deposit is collected in addition to the first month’s rent.
A limited exception applies to certain small landlords. A qualifying landlord may generally collect up to two months’ rent when the landlord owns no more than two residential rental properties containing no more than four total units.
The property must generally be held by a natural person or a qualifying limited liability company or family trust. This small-landlord exception does not apply when the prospective tenant is a service member.
Landlords should confirm that they meet every part of the exception before charging more than one month’s rent.
What Counts as a Security Deposit?
California law looks at the purpose of a charge, not simply the name used in the lease.
A security deposit may include money collected to cover:
- Unpaid rent
- Damage caused by the tenant or the tenant’s guests
- Cleaning needed to return the unit to its original level of cleanliness
- Damage to furniture or other landlord-owned property covered by the lease
Calling part of the deposit a cleaning fee, pet deposit, key deposit, or last month’s rent does not necessarily place it outside the legal deposit limit.
Security deposits must also be refundable. A lease generally cannot convert part of a residential security deposit into a nonrefundable fee simply by labeling it that way.
Document the Property at Move-In
Strong documentation is one of the best ways to prevent a security deposit dispute.
For tenancies beginning on or after July 1, 2025, California landlords must take photographs of the rental unit at or immediately before the beginning of the tenancy. Landlords must also take photographs after the tenant has returned possession, before repair or cleaning work begins, and after deductible work is completed.
Photographs should clearly show the condition of floors, walls, appliances, fixtures, bathrooms, cabinets, doors, and other areas that could later become disputed.
A written move-in condition report can provide additional support. The landlord and tenant should have an opportunity to note existing damage and retain a copy.
Without reliable move-in records, it may be difficult to prove that damage occurred during the tenant’s occupancy.
Offer a Pre-Move-Out Inspection
After receiving notice that the tenancy will end, the landlord must generally notify the tenant in writing of the right to request an initial inspection.
The inspection usually takes place during the final two weeks of the tenancy and identifies cleaning or repair issues that may affect the deposit. This gives the tenant a chance to address them before moving out.
Afterward, the landlord should provide an itemized list of proposed deductions. Additional deductions may still be allowed for later damage or conditions hidden by the tenant’s belongings.
What Can a Landlord Deduct?
A California landlord may only deduct amounts that are reasonably necessary for purposes allowed by law.
Permitted deductions generally include:
- Rent that remains unpaid
- Cleaning necessary to restore the unit to its move-in level of cleanliness
- Repairing tenant-caused damage beyond ordinary wear and tear
- Restoring or replacing landlord-owned furniture or personal property when allowed by the rental agreement
A landlord cannot use the security deposit to renovate the unit, make upgrades, or charge a departing tenant for routine property maintenance.
Cleaning charges must also be based on the rental’s earlier condition. A landlord cannot automatically charge every tenant for professional cleaning if the unit was returned as clean as it was at move-in.
Normal Wear and Tear vs. Tenant Damage
One of the hardest questions is whether a condition is normal wear and tear or chargeable damage.
Normal wear and tear is the gradual deterioration that occurs through ordinary use. It may include minor wall scuffs, faded paint, lightly worn flooring, or aging fixtures.
Tenant damage is usually caused by misuse, carelessness, neglect, or an accident. Examples may include:
- Large holes in walls
- Broken doors or windows
- Deep stains or burns in carpeting
- Pet damage
- Missing fixtures
- Unauthorized alterations
The answer depends on the facts. Landlords should consider the condition at move-in, the length of the tenancy, the age of the damaged item, and whether the claimed repair cost is reasonable.
For example, charging a tenant the full replacement cost of an older carpet may be difficult to justify when the carpet had already reached much of its expected useful life.
Follow the 21-Day Deadline
California landlords generally have 21 calendar days after a tenant moves out to return the remaining security deposit.
If deductions are made, the landlord must also provide an itemized statement explaining each charge. Deductions over $125 generally require receipts, invoices, or other supporting documentation.
When repairs cannot be completed within 21 days, the landlord may provide a good-faith estimate. Final documentation must then be sent within 14 days after the work is completed or the invoice is received.
What if Repairs Are Not Finished?
Some repairs cannot reasonably be completed within 21 days. A contractor may be unavailable, parts may need to be ordered, or the extent of the damage may require additional evaluation.
When there is a good reason for the delay, the landlord may send the tenant a good-faith estimate within the original 21-day period.
The landlord must then send the final documentation within 14 calendar days after the repair is completed or the final invoice is received.
The estimate should be reasonable and based on available information. It should not be used to hold back an unsupported amount indefinitely.
Keep Complete Security Deposit Records
Good recordkeeping can make the difference between a straightforward deduction and a costly dispute.
Landlords should retain:
- The signed lease and any amendments
- Proof of the amount collected
- Move-in inspection records
- Move-in and move-out photographs
- Pre-move-out inspection notices
- The proposed deduction list
- Contractor estimates and invoices
- Receipts for cleaning and repairs
- Copies of the final itemized statement
- Proof that the refund and documents were delivered
Landlords should also avoid waiting until the final day to assemble these materials. Begin reviewing the records as soon as the tenant returns possession.
What Happens if a Landlord Breaks the Rules?
A tenant may send a demand letter challenging the deductions or requesting the return of the deposit. If the matter cannot be resolved, the tenant may file a claim in small claims court or civil court.
When a court finds that the landlord retained the deposit in bad faith, the tenant may recover the amount wrongfully withheld plus statutory damages of up to twice the amount of the security deposit.
Common problems include missing the 21-day deadline, deducting for ordinary wear, failing to provide receipts, using inflated estimates, or lacking proof of the property’s earlier condition.
Even when some damage is legitimate, poor documentation can weaken the landlord’s position.
Security Deposit Checklist for California Landlords
Before closing out a tenancy, landlords should confirm that they have:
- Collected no more than the permitted deposit
- Documented the property at move-in
- Offered the required initial inspection
- Separated normal wear from tenant-caused damage
- Taken before-and-after photographs
- Kept receipts, invoices, and repair records
- Prepared a detailed itemized statement
- Returned the remaining deposit within 21 days
- Retained proof of delivery
A consistent process can reduce confusion and help show that deductions were reasonable and made in good faith.
Speak With a California Landlord Attorney
Security deposit disputes can become more complicated when there is extensive property damage, unpaid rent, missing documentation, or disagreement over who caused a condition. Landlords dealing with unpaid rent or a tenant who refuses to leave should also understand how to evict a tenant in California.
Stone & Sallus helps California landlords evaluate deductions, respond to tenant demands, and address landlord-tenant disputes before they escalate. Speaking with an attorney early can help property owners understand their obligations and avoid preventable mistakes.
