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If the last time you thought carefully about security deposits was before 2024, your policy is probably out of date. Two California laws, AB 12 and AB 2801, rewrote the rules for how much landlords can collect and how they have to document deductions. Both amend the same statute, California Civil Code Section 1950.5, and together they represent the biggest change to security deposit law the state has seen in years.
Key Takeaways
AB 12 caps most security deposits at one month's rent, eliminating the old two-month unfurnished and three-month furnished distinction.
A narrow small landlord exception allows up to two months' rent, but it never applies when the tenant is an active-duty service member.
Pet deposits count toward the same one-month cap rather than stacking on top of it, which is why many landlords have shifted to monthly pet rent instead.
AB 2801 now requires timestamped photos at move-in, move-out, and after any repairs used to justify a deposit deduction.
The 21-day deadline to return a deposit with an itemized statement hasn't changed, but the documentation you need to include with it has.
What AB 12 Changed
Effective July 1, 2024, California Civil Code Section 1950.5 limits most residential security deposits to one month's rent. Before this law, landlords could charge up to two months' rent for an unfurnished unit or three months' rent for a furnished one. AB 12 eliminated that distinction entirely, so furnished and unfurnished rentals across San Diego County are now held to the same one-month ceiling.
This change applies to deposits collected on or after the effective date. If you're holding a larger deposit collected on a lease signed before July 1, 2024, you don't need to refund the difference mid-tenancy, but any new lease signed today needs to reflect the current cap.
The Small Landlord Exception Has Real Limits
AB 12 does include an exception for smaller landlords. If you're a natural person, or an LLC where every member is a natural person, and you own no more than two residential rental properties totaling no more than four units, you can still charge up to two months' rent. It's a narrow carve-out, and it's worth double-checking whether your specific ownership structure actually qualifies before relying on it.
There's one hard limit even within that exception: it never applies to active-duty service members. If your tenant is on active military service, the deposit is capped at one month's rent regardless of how many properties you own. Building this distinction into your leasing paperwork now avoids an uncomfortable conversation later.
How Pet Deposits Fit Under the Cap
A common question we hear from owners is whether a pet deposit can be charged in addition to the standard security deposit. Under AB 12, the answer is no. Pet deposits are part of the same aggregate deposit total, not a separate line item stacked on top of it. This is exactly why so many San Diego County landlords have shifted toward charging monthly, non-refundable pet rent instead of a refundable pet deposit, since pet rent is treated as ordinary rent and doesn't count against the deposit cap at all.
New Photo Documentation Requirements Under AB 2801
While AB 12 addressed how much landlords can collect, AB 2801 changed what landlords have to prove when they keep any of it. The law rolled out in two phases. As of April 1, 2025, landlords must photograph the unit after a tenant moves out and before any cleaning or repairs begin, and then photograph it again once that work is finished if any part of the deposit is being deducted for it. As of July 1, 2025, landlords must also photograph the unit immediately before or at the start of any new tenancy, establishing a clear baseline for its condition.
These photos aren't optional paperwork. They have to accompany the itemized statement of deductions that's already required within the standard 21-day window after move-out. Skipping this step in bad faith can jeopardize a landlord's ability to keep any of the deposit at all, and a tenant who successfully challenges a wrongful deduction can recover damages well beyond the amount originally withheld.
Building Compliance Into Your Routine
The practical upshot of both laws together is that security deposit handling now has to be treated as a documented process, not a judgment call made at move-out. That means photographing every unit at move-in going forward, building a photo step into every turnover before any vendor touches the property, and keeping your lease templates updated with the current one-month cap rather than legacy language from a prior lease cycle. If you'd like a second look at your owner resources and current lease documents to confirm they reflect these changes, our team is glad to walk through it with you.
Getting tenant screening right matters more than ever under a lower deposit cap too, since a smaller deposit means less of a financial cushion if something does go wrong during a tenancy. Combined with the liability considerations we've covered in our guide to minimizing landlord liability risks, staying ahead of these compliance requirements protects both your investment and your standing with tenants.
FAQ
Can I still charge two months' rent as a security deposit in California?
Only if you qualify for the small landlord exception, meaning you're a natural person or an LLC of natural persons who owns no more than two rental properties totaling four units or fewer, and your tenant isn't an active-duty service member.
Do I need to refund the difference on a deposit collected before July 1, 2024?
No. AB 12 applies prospectively to deposits collected on or after its effective date. Deposits lawfully collected before then can remain as they are for that tenancy.
Can I still charge a separate pet deposit?
You can, but it counts toward the same one-month cap rather than being charged in addition to it. Many landlords now use monthly pet rent instead, since it isn't subject to the deposit cap.
What happens if I don't take the photos required under AB 2801?
Failing to document move-in, move-out, and repair conditions in good faith can jeopardize your ability to keep any portion of the deposit and may expose you to damages beyond the deposit amount.
Staying Compliant as the Rules Keep Changing
California's security deposit rules have shifted twice in two years, and it's a safe bet they'll keep evolving. Building AB 12's one-month cap and AB 2801's photo requirements into your standard leasing and turnover process now means one less thing to worry about the next time a tenant moves out. If you'd like help reviewing your current deposit practices or updating your lease templates for San Diego County rentals, reach out to our team today.
