CA Civil Code 1950.5: Deposit Limits, Deductions, and 21-Day Return

California Civil Code Section 1950.5 caps most residential security deposits at one month’s rent, restricts what a landlord can deduct at move-out, and requires the deposit (or an itemized accounting of what was kept) to be returned within 21 days. A landlord who withholds money in bad faith can be ordered to pay up to twice the deposit as a penalty on top of returning what was wrongfully kept.¹

How Much a Landlord Can Charge

The default cap is one month’s rent, and it applies whether the unit is furnished or unfurnished.² That deposit is separate from the first month’s rent paid at move-in. Before July 2024, landlords could charge up to two months’ rent for unfurnished units and three months’ for furnished. The furnished-versus-unfurnished distinction is gone.

Small landlords get one exception. If the landlord is an individual (or an LLC where every member is an individual) and owns no more than two rental properties containing four or fewer units in total, the cap goes up to two months’ rent.¹ Corporate landlords and anyone with a larger portfolio stay at one month.

Active-duty service members are protected from the small-landlord exception. Their deposit cannot exceed one month’s rent even when the landlord would otherwise qualify to charge two, and a landlord cannot refuse to rent to a service member because of that restriction.¹

No Part of the Deposit Can Be “Nonrefundable”

A lease cannot label any portion of the security deposit as nonrefundable. The name on the charge does not matter. Move-in fee, cleaning fee, key deposit — if it functions as security for the rental agreement, Section 1950.5 controls it, and any clause calling it nonrefundable is unenforceable.¹

What a Landlord Can Deduct at Move-Out

Deductions are limited to four categories. Anything outside them violates the statute.¹

Unpaid rent still owed at move-out.
Damage beyond normal wear and tear caused by the tenant or the tenant’s guests. Faded paint and minor scuff marks are normal wear. Large holes, broken fixtures, and significant carpet stains are not.
Cleaning needed to return the unit to the level of cleanliness it was in when the tenant moved in — not a deep clean or upgrade.
Restoring personal property or fixtures, such as replacement keys or built-in appliances, if the lease specifically authorizes it and the loss is beyond normal wear and tear.³

Most disputes come down to the wear-and-tear line. A landlord cannot charge a tenant for repainting walls or replacing carpet that was simply old. Damage the tenant actively caused, like crayon on walls or cigarette burns in flooring, is a different matter.

The Pre-Move-Out Inspection

Once either side gives notice to end the tenancy, the landlord must offer the tenant a walkthrough inspection within a reasonable time.¹ If the tenant requests it, the inspection cannot be scheduled more than two weeks before the move-out date, and the landlord must give at least 48 hours’ written notice of the date and time unless the tenant waives that in writing.

After the walkthrough, the landlord provides an itemized list of anything that could lead to a deduction. That list is the tenant’s chance to fix problems before the final move-out and keep the deposit whole. Skipping the inspection gives up that chance.

The 21-Day Return Rule

After the tenant moves out, the landlord has 21 calendar days to either return the full deposit or send whatever remains together with an itemized statement explaining each deduction.¹ Missing that deadline can cost the landlord the right to keep any part of the deposit at all, even if legitimate deductions existed.

Documentation scales with the amount. If total deductions exceed $125, the landlord must attach copies of receipts and invoices for any cleaning or repair work. When the landlord or the landlord’s employees did the work themselves, the statement must describe what was done, how long it took, and the hourly rate charged.³

The refund goes to whatever address the tenant provides. If the tenant leaves no forwarding address, the landlord mails it to the vacated unit.¹ Always give your landlord a forwarding address in writing before you go.

If the Property Changes Hands

A sale does not erase the deposit. The outgoing landlord must either transfer the remaining deposit to the new owner or return it to the tenant with an itemized accounting, and must notify the tenant of the new owner’s name, address, and phone number by personal delivery or first-class mail.¹

If the outgoing landlord does neither, both the old and new owners are jointly liable for returning the deposit, and the new owner cannot demand a replacement deposit from the tenant until the original is resolved.

Suing Over a Wrongfully Withheld Deposit

Small claims court is where most of these cases land. California small claims handles individual claims up to $12,500, which covers the vast majority of deposit disputes.⁴ The landlord carries the burden of proving each deduction was reasonable and legally authorized, not the tenant.¹

If the court finds the landlord acted in bad faith, it can award the tenant up to twice the deposit amount in addition to the amount wrongfully withheld. The court can impose those damages on its own when the facts justify it, even if the tenant did not specifically ask for them.¹ A landlord who wrongfully keeps a $2,500 deposit could owe as much as $7,500: the $2,500 back plus $5,000 in penalties.

Filing deadlines depend on the lease. For a written rental agreement, the statute of limitations is four years from the violation. For an oral agreement, it is two years.⁵ Waiting past that deadline is one of the most common reasons otherwise strong deposit claims fail.

1
California Legislative Information. California Civil Code 1950.5 – Security for Rental Agreement
2
California Attorney General. Know Your Rights as a California Tenant – Security Deposits
3
California Legislative Information. California Code CIV 1950.5 – Security for Rental Agreement
4
Superior Court of California, County of Orange. Before You File – Small Claims
5
California Courts. Deadlines to Sue Someone