Security deposits have long been a point of contention between landlords and tenants, often leading to disputes over deductions and return timelines. With the passage of AB 2801, California is introducing new regulations aimed at increasing transparency, protecting tenants from unnecessary charges, and ensuring landlords follow clear documentation procedures. These updates, rolling out in 2025, will impact how security deposits are collected, documented, and returned. Whether you're a landlord or a tenant, understanding these changes is essential for a smoother rental experience. Here’s what you need to know about the key updates in AB 2801 and how they affect you.
On July 1, 2024 the maximum a “large landlord” could demand for a security deposit was changed to 1 month's rent. There are no exceptions for pets, credit or furnished properties. Small landlords can charge up to two months rent. This is in addition to the first month's rent for both categories. Small and large landlords are only allowed to charge 1 months rent for the security deposit if the tenant is active duty military with no exceptions.
How does California define a large landlord?
AB 2801 is mandatory for all “larger landlords” defined as landlords who own no more than 2 residential rental properties with no more than 4 rentable units. The owner must be a natural person, LLC or a family owned trust.
California's Assembly Bill 2801 (AB 2801) introduces significant revisions to the state's security deposit regulations, enhancing protections for tenants. Here are the five key changes:
Restoration Limits: Landlords can now only claim amounts from the security deposit necessary to restore the premises to its original condition at the start of the tenancy, excluding ordinary wear and tear. Landlords cannot use any portion of the security deposit for improvements.
Cleaning Charges Restriction: Landlords are prohibited from charging tenants for professional cleaning services, such as carpet cleaning, unless it's reasonably necessary to return the premises to the condition it was in at the beginning of the tenancy, beyond normal wear and tear.
Initial Inspection Clarification: The law clarifies that initial inspections should occur before the tenant returns possession of the unit to the landlord, allowing tenants the opportunity to address identified issues.
Itemized Statement Requirement: If an initial inspection is conducted and the tenant's possessions do not obstruct the landlord's assessment, the landlord cannot deduct from the security deposit for repairs or cleaning not specified in the itemized statement provided after the inspection.
Timely Return of Deposits: The law reinforces the requirement for landlords to return the security deposit and provide an itemized statement of any deductions within 21 calendar days after the tenant vacates the premises.
Important Dates to Remember
April 1, 2025: Post-Tenancy Photographic Documentation
Starting April 1, 2025, landlords are required to take photographs of the rental unit after the tenant has moved out and before any repairs or cleaning are performed. Additionally, after completing any necessary repairs or cleaning, landlords must take photographs documenting the completed work. These photographs must be provided to the tenant along with an itemized statement of deductions, enhancing transparency in the security deposit deduction process. citeturn0search6
July 1, 2025: Pre-Tenancy Photographic Documentation
For any new tenancy beginning on or after July 1, 2025, landlords must take photographs of the rental unit before or at the start of the lease. This requirement aims to establish a clear record of the property's condition at move-in, which can be referenced at the end of the tenancy to assess any potential damages beyond normal wear and tear. citeturn0search6
Final Thoughts
With the implementation of AB 2801, California is taking significant steps to ensure fairness and transparency in the handling of security deposits. These new requirements not only protect tenants from unfair deductions but also provide landlords with clear guidelines to document and justify any necessary charges. By staying informed and adopting these best practices, landlords can maintain positive relationships with tenants while ensuring compliance with the law. If you have any questions or need assistance navigating these new regulations, feel free to reach out—we’re here to help!
