Berkeley caps residential security deposits at two months rent for unfurnished units and requires landlords to pay annual interest to tenants, layered atop California Civil Code Section 1950.5 protections.
Berkeley Municipal Code Chapter 13.78 mandates that landlords pay annual interest on security deposits held longer than twelve months. The Rent Stabilization Board publishes the interest rate each December based on local bank rates. Deposits remain capped at two months unfurnished or three months furnished consistent with state law. Landlords must return deposits within 21 days of move-out with itemized deductions. Berkeley layers the interest requirement onto Costa-Hawkins-protected pre-1995 stock without preemption issues, since interest rules are not rent control.
Failing to pay deposit interest, withholding without itemization, or holding amounts beyond legal caps exposes landlords to twice the wrongful retention plus statutory damages and attorney fees.
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