Security deposits are the single most common source of disputes between California landlords and departing tenants, and they are also the easiest place for an owner to lose money on a technicality. Two recent changes reshaped the rules: AB 12 capped what you can collect, and AB 2801 changed how you have to prove what you deduct.
1. The deposit cap: one month's rent
For most owners, the maximum security deposit is now one month's rent. The old distinction between furnished and unfurnished units is gone. There is a limited carve-out for small landlords who own no more than two residential properties containing four or fewer total units, who may collect up to two months' rent, but that exception disappears when the applicant is a servicemember.
Practical takeaway: if your lease template still says "two months' rent, furnished," it is out of date and needs to be replaced today.
2. The 21-day clock
After a tenant vacates, you have 21 calendar days to deliver either the full deposit or an itemized statement of deductions with any remaining balance. This is a hard deadline. Courts routinely disallow otherwise legitimate deductions when the statement is late, and bad-faith retention can carry statutory damages of up to twice the deposit on top of the deposit itself.
3. Photo documentation is now mandatory
AB 2801 requires photographs at three points:
- Before or at the start of the tenancy, showing the condition of the unit.
- After the tenant moves out, before any repairs or cleaning.
- After repairs or cleaning that you intend to charge against the deposit.
Those photos go out with the itemized statement. If you cannot show a before-and-after, you are effectively asking a judge to take your word for it, and that rarely ends well for the owner.
4. What you can and cannot deduct
Allowed:
- Unpaid rent and lawful fees stated in the lease
- Repair of damage beyond normal wear and tear
- Cleaning to return the unit to its move-in level of cleanliness
- Restoration of personal property if the lease provides for it
Not allowed:
- Ordinary wear and tear such as faded paint or traffic-lane carpet wear
- Pre-existing conditions the tenant did not cause
- Blanket repainting or carpet replacement simply because of the unit's age
- Deferred maintenance you postponed during the tenancy
5. Pre-move-out inspection rights
Tenants may request an initial inspection before moving out. When they do, you must give reasonable written notice, walk the unit, and provide an itemized list of what you would deduct if the conditions are not corrected. That gives the tenant a chance to fix items themselves, which almost always produces a cleaner turnover and far fewer disputes.
6. A turnover process that survives a challenge
- Photograph and date every room at move-in, and have the tenant sign the condition report.
- Offer the pre-move-out inspection in writing.
- Photograph the vacant unit before anyone touches it.
- Collect real vendor invoices, not estimated allowances.
- Photograph the completed work.
- Send the itemized statement, photos, invoices, and any balance within 21 days by a trackable method.
Where owners get burned
The three most expensive mistakes we see in the San Gabriel Valley and Inland Empire are missing the 21-day deadline during a busy turnover, charging a flat "cleaning fee" with no invoice behind it, and having zero move-in photos to compare against. All three are process failures, not legal gray areas.
If you would rather not run this process yourself, our management service handles documented move-in and move-out inspections, vendor invoicing, and deposit accounting on every turnover. Talk to our team or see how our property management services work.
This article is general information for California rental property owners and is not legal advice. Consult an attorney about your specific situation.