California Caps Security Deposits at One Month's Rent

Under Cal. Civ. Code § 1950.5, a landlord 'shall not demand or receive security... in excess of an amount equal to one month's rent,' on top of first month's rent, for both furnished and unfurnished units. A narrow exception lets a small landlord — a natural person (or LLC of natural persons) owning no more than two residential properties totaling four or fewer units — charge up to two months' rent. The deposit may be applied only to unpaid rent, cleaning the unit to its move-in condition, and repairing tenant-caused damage 'exclusive of ordinary wear and tear.' Within 21 calendar days of the tenant vacating, the landlord must return the balance with an itemized statement; receipts must be attached when repair and cleaning deductions exceed $125.

Per Cal. Civ. Code § 1950.5(l), the bad-faith claim or retention of a deposit may subject the landlord to statutory damages of up to twice the amount of the security deposit, in addition to actual damages. Tenants typically pursue these claims in small claims court.