New (and Old) Requirements for Handling Residential Security Deposits

Security deposit

AB 2801, which became effective on January 1, 2025, imposes new requirements on landlords of residential properties. AB 2801 amended Section 1950.5 of the Civil Code, which regulates the amount and disposition of security deposits.

What’s New?

Beginning April 1, 2025, the landlord shall take photographs of the unit:

  • “within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleanings for which the landlord will make deduction from or claim against the security deposit”, and
  • “within a reasonable time after such repairs or cleanings are completed”.
  • For tenancies that begin on or after July 1, 2025, the landlord shall take photographs of the unit “immediately before, or at the inception of, the tenancy”.
  • The landlord may not require a tenant to pay for, or make any deduction from the security deposit, for professional carpet cleaning or other profession cleaning services, “unless reasonably necessary to return the premises to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear”.
  • If the landlord makes any deduction for repair for damage that is beyond reasonable wear and tear, or for cleanings to return the unit to the same level of cleanliness it was in at the inception of the tenancy (normal wear and term excluded), the landlord shall provide to the tenant all photographs taken (1) at the inception of the tenancy, (2) after the tenant moved out, and (3) after the repairs or cleaning, along with a written explanation of the cost of the allowable repairs or cleanings. Such explanation shall include:
  • If the landlord or the landlord’s employee did the work, the description of the work performed, the time spent, and the reasonably hourly rate charged.
  • If the landlord hired someone to do the work, a copy of the bill, invoice, or receipt supplied by the person or entity performing the work, including the name, address, and telephone number of the person or entity.
  • If a deduction is made for materials or supplies, a copy of the bill, invoice or receipt.

The required photographs may be provided to the tenant by mail, email, computer flash drive, or by providing a link to where the tenant may view the photographs online.

What’s Stayed the Same?

Since July 1, 2024, landlords may no longer demand a security deposit in an amount that exceeds one month’s rent. However, if the landlord is a natural person or a limited liability company in which all members are natural persons, and if the landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent, the landlord may ask for a security deposit in an amount that does not exceed two months’ rent.

The bad faith claim or retention by a landlord of the security deposit or any portion thereof in violation of Section 1950.5 of the Civil Code may subject the landlord to statutory damages of up to twice the amount of the security, in addition to actual damages. The landlord is required to prove that the amounts claimed were reasonable.

If you are renting your unit to a service member (as this term is defined under Section 400 of the Military and Veterans Code), you should contact your attorney as other requirements apply to the amount of the security deposit that can be charged.

All other rules, including those related to the notice of right to request a pre-move-out inspection and to the security deposit’s itemized statement, continue to apply.

Contact A San Francisco Landlord/Tenant Lawyer Today

For any assistance regarding security deposits, you may contact Gael Bizel-Bizellot at gael@zfplaw.com at Zacks & Freedman, PC for guidance. Contact us at your convenience to request a consultation.

Neither this website nor this post are intended to create an attorney-client relationship.