Top 10 California Security Deposit Mistakes
1. Collecting More Than One Month's Rent
As of July 1, 2024, landlords may not charge more than one month's rent for a security deposit, regardless of whether the unit is furnished or not. Many landlords continue to charge two months' rent. There is an exception for small landlords (owning 4 or fewer units on 2 properties or fewer), but violations expose you to tenant lawsuits.
2. Disguising Additional Deposits Under Different Names
Last month's rent, cleaning fee, preparation charge, deposits for keys, garage openers and pets, and any other creative name are all part of the security deposit. Renaming deposits, however creative, does not avoid the cap.
3. Charging a Separate Pet Deposit
A pet deposit is considered part of the overall security deposit and is included within the one-month limit calculation. Rental housing providers can no longer demand additional deposits specifically for pets beyond the cap. For example, if monthly rent is $3,000, a landlord cannot collect a $3,000 security deposit AND a separate $500 pet deposit. The total cannot exceed $3,000. What landlords can do is charge uncapped monthly pet rent, which is a recurring charge for keeping a pet, separate from the deposit limit.
4. Missing the 21-Day Return Deadline
Improper deductions, missing documentation, or failing to meet the 21-day deadline can expose landlords to penalties of up to twice the entire security deposit, in addition to the refund owed. Missing the 21-day deadline by even one day often gives the tenant a full refund and a bad-faith finding in small claims court.
5. Charging for Paint (When It's Normal Wear and Tear)
A California landlord may deduct painting costs only when a tenant leaves damage that goes beyond normal wear and tear. Routine repainting from standard turnover does not qualify, but excessive marks, stains, or clear misuse generally support a valid deduction.
6. Failing to Take Move-In and Move-Out Photos
Failing to take pre-tenancy and post-tenancy photographs as required for tenancies starting on or after July 1, 2025 makes any cleaning or repair deduction unenforceable under SB 712 (AB 2801). New in 2025: Landlords must provide photos before and after any repairs.
7. Charging for Normal Wear and Tear
Charging for normal wear and tear (faded paint, light carpet wear) is a per-se illegal deduction. Examples of normal wear and tear include faded paint, carpets worn down in high traffic areas, loose doorknobs, and minor scratches on floors or walls.
8. Missing Itemized Statements, Estimates and Receipts
Sending an itemized statement without invoices for deductions over $125 violates Civil Code § 1950.5(g)(2) and may void the deduction. Documentation should be detailed and include supporting receipts or good-faith estimates.
9. Charging for Cleaning Beyond Move-In Condition
Landlords may charge tenants for carpet cleaning only when the tenant leaves excessive dirt or damage beyond normal wear and tear. Routine cleaning tied to standard turnover remains the landlord's responsibility and should not be deducted from the tenant's security deposit. iPropertyManagement
10. Failing to Offer or Consider Security Deposit Alternatives: Landlords should consider offering alternatives like surety bonds and insurance alternatives, where tenants pay a small, one-time, non-refundable fee to a third-party provider instead of tying up thousands in an upfront deposit. While not legally mandated, offering these options attracts a wider field of qualified tenants who may make great tenants but would struggle with upfront costs. It reduces move-in friction and gives you a competitive advantage in California's tenant-protective rental market. With the deposit cap now limited to one month, alternatives become increasingly valuable to both landlords and tenants.
Professional management can help you navigate all of this potential pitfalls. Want to chat? Give us a call. (714) 481-0709
