California landlords have a right to charge their tenants a security deposit. This serves as a financial cushion against certain liabilities that a landlord may incur when renting out a home or rental unit.

Be that as it may, there are laws surrounding security deposits in California that every landlord must abide by.

If you’re renting your home for the first time, or simply want to familiarize yourself with the California security deposit law, here is everything you need to know.

Is there a limit to how much security deposit a landlord can charge in California?

Yes, there is a limit to how much security deposit a landlord can charge a tenant in California. The exact month's rent amount to charge depends on whether you’re renting out a furnished property or an unfurnished residential property.

If a landlord is renting out an unfurnished rental unit, the maximum security deposit they can charge must be equivalent to 2 month's rent.

For a furnished residential property, the maximum deposit must not exceed the equivalent of 3 month's rent.

Can landlords in California charge a tenant an additional pet deposit?

Yes, if a landlord rental agreement allows pets into their rental, the landlord can ask the tenant to pay an additional deposit. The only exceptions to make would be for emotional support animals, service dogs, and psychiatric service dogs.

dog sitting on couch

The total security deposit, however, must not exceed a certain limit. That is, 2 months’ rent for unfurnished units and 3 months’ rent for furnished units.

There is also no California law preventing landlords from charging their tenants a monthly pet premium.

Can landlords in California charge nonrefundable security deposits?

No, charging a non-refundable security deposit is unlawful. California law recognizes a security deposit as a tenants' property. A landlord may, however, have a right to make certain allowable deductions for damage beyond ordinary wear and tear or to pay rent after the tenants have moved out.

How must landlords store security deposits?

Landlords are required to store the security deposits of their tenants, however California doesn’t mandate landlords to store it in a specific way.

Do landlords have to provide tenants with a receipt of the security deposits?

No, a landlord doesn’t have to provide their tenants with a written notice of receipt after receiving their security deposit. But while security deposit laws may not require it, having written proof may be worthwhile for record-keeping purposes.

In the notice, a landlord may want to let their tenants know of important things like:

  • The security deposit the landlord received.
  • The date the landlord received it.
  • Where the landlord is storing the deposit.
  • What the tenants must do to get a refund.

Can a landlord keep a tenant’s security deposit in California?

Yes, you may be able to keep part or all of the security deposit under certain circumstances. The following are legally justifiable circumstances.

  • In the event your tenant has unpaid rent due.
  • If the tenant causes negligent property damage.
  • Costs of cleaning the property.
  • Paying any debts that may have accrued as a result of the tenant not abiding by the terms of the lease or rental agreement.

person holding money

Please note that you cannot keep a tenant’s security deposit for the following two reasons. One, using the tenant’s deposit to cover normal wear and tear. Examples of normal wear and tear include warped windows, lightly scratched panes, minor water marks, and faded paint.

You can only charge a tenant for damage exceeding ordinary wear and tear. Examples include torn or missing curtains, a broken refrigerator shelf, missing blinds, clogged sinks, cracked bathroom tiles, or missing door handles.

You must also not charge a tenant for any condition that existed prior to the tenant moving into the property.

Can landlords in California perform a walk-through inspection?

Yes, as a California landlord, you can perform a walk-through inspection. The goal of the inspection is to allow you to examine the condition of the rental relative to its move-in state and prevent security deposit disputes.

The following are the steps you must follow when conducting a walk-through inspection:

  • Notify the tenant of your intention to carry out a walk-through inspection.
  • If the tenant agrees, you must carry out the inspection at least 2 weeks before the tenancy ends.
  • You must send the tenant a 48 hours written notice prior to the inspection date.
  • After the inspection, you must provide your tenant with a list of all needed repairs.

man doing an inspection on a house

When should landlords in California return their tenant’s security deposit?

Once the tenant moves out, you’ll have 21 days to return their deposit (or whatever portion returns). If making deductions, you must include an itemized statement indicating the following things:

  • The security deposit amount you received.
  • An itemized statement of any deductions you’ve made to the tenant’s deposit.
  • A good faith estimate of any work that is yet to be completed.
  • The amount of security deposit that you’re returning back to the tenant.

What should a landlord do if they sell the rental?

You’ll have two options to consider. The first option would be to give the deposit to the new owner, subtracting any allowable deductions. You must then give the tenant the incoming landlord’s name and contact details. You must also notify both the new landlord and tenant of the security deposit amount, as well as any deductions you’ve made.

The second option would be to return the deposit, less any allowable deductions, to the tenant. Then, you must notify the incoming landlord of three things. That is, the amount of the security deposit, any deductions you’ve made, and your decision to return the deposit back to the tenant.

Bottom Line

Do you still have more questions regarding the California security deposit law? Action Properties, Inc. can help. We can help minimize your hassles, protect your investment, and maximize your ROI. Get in touch to learn more!

This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regards to this content or any other aspect of your property management needs.