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  • Security Deposits              [download]

    California State Law regulates the collection and refund of security deposits (California Civil Code section 1950.5). Rental agreements may refer to these deposits as "cleaning deposit," "last month's rent" or "security deposit". No matter what the landlord calls it, the law considers any deposit to be a security deposit and limits the amount the owner may charge and what it may be used for when the tenant moves out.

    Moving In
    Interest on Security Deposits
    Moving Out

    Moving In

    How much deposit can a landlord charge? 

    The total amount charged for any type of security deposit cannot exceed two months’ rent in an unfurnished unit or three months’ rent in a furnished unit. The owner may require the tenant to pay this deposit in addition to the first month's rent.

    Tenants should be sure to get a written receipt for all amounts paid. If there is a written rental agreement, it should clearly state the amount of deposit the landlord collected. Tenants should be sure to keep a copy of their rental agreement. They may also want to take photographs documenting the condition in which the unit was received. This may be helpful if a dispute arises in the future about the refund of the deposit.

    Can the owner increase the security deposit on an existing tenant?

    Santa Monica Rent Control Board Regulation 14002 does not permit the owner to increase the security deposit once it has been established for tenants who moved in on or after January 1, 1999. The security deposit may be increased for tenants who moved in before that date under limited circumstances, provided the total amount collected does not exceed two months’ rent for an unfurnished unit and three months’ rent for a furnished unit. See Regulation 14003.

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    Interest on Security Deposits

    Does the landlord have to pay interest on the security deposit?

    Board regulations do not require an owner to pay a tenant interest on their security deposit.

    For additional information, please read the staff report presented at the September 27, 2007 Rent Control Board meeting. The Board elected to continue its still current position of not requiring interest to be paid on security deposits.  

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    Moving Out

    A landlord generally has three weeks from the date on which a tenant vacates to either refund the entire deposit or provide the tenant with an itemized statement with documentation explaining why all or any part of the deposit is not being returned. The refund and statement may be personally delivered or mailed.

    Can the landlord keep any of the deposit? 

    It is not legal for a security deposit to be "nonrefundable," and such a provision in a rental agreement cannot be enforced. However, under state law, a landlord may withhold all or part of a security deposit for the following reasons:

    • To cover unpaid rent through the date on which a tenancy terminated. This is usually 30 days after a tenant gives notice that he or she is moving.
    • To repair damage to the unit other than "ordinary wear and tear" (wear and tear that ordinarily occurs with the use of any unit).
    • To replace items originally furnished by the landlord and not returned by the vacating tenant, such as keys, furniture or trash receptacles, if the rental agreement authorizes this deduction from the deposit.
    • To have the unit cleaned, if the unit was not left as clean as when it was rented.

    As of January 1, 2004, an amendment to Civil Code section 1950.5 generally requires receipts to be attached to the itemization of security deposit deductions, if deductions for repairs and cleaning exceed $125, or if the tenant requests documentation within 14 days of receiving the itemization of deductions.

    Tenants also have the right to request the owner inspect the unit before they move out. Based on this inspection the owner must give the tenant an itemized statement specifying repairs or cleaning that would be the basis of any deductions from the security deposit. Tenants would then be able to complete the repairs and/or cleaning prior to moving out to avoid security deposit deductions.

    Can the security deposit be used for last month's rent? 

    This can be done only if it was specifically agreed that the deposit was for last month's rent when the tenants moved in. If the deposit was for something other than last month’s rent, the tenants must pay their regular rent during the last month of tenancy.

    What can a tenant do if the owner does not return the security deposit? 

    A tenant who has not received a refund or an itemized statement within three weeks, or who believes a deduction is not justified, should make a written demand to the landlord, keeping a copy of the request. If the issues are not resolved, the tenant may file a lawsuit in Small Claims Court for amounts up to $10,000. If the owner’s retention of all or part of the security deposit was in bad faith, the tenant should ask for statutory damages in addition to the amount of security deposit owed.

    To protect their right to a refund, vacating tenants should ask their landlord to inspect the unit on the day they move out, although landlords are not obligated to do so. Prior to moving out, tenants should take photographs of the entire interior of their unit to document its condition, and/or have a credible witness other than a roommate conduct a thorough inspection of the unit.

    NOTE:  This information sheet presents only an overview of security deposit requirements. To obtain complete information, see Civil Code section 1950.5 on the Internet at - {check the Civil Code box and search for §1950.5}. Also, see Chapter 14 of the Board regulations.  

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