California security deposit account for landlords
Easily collect and manage deposits for every property with dedicated security deposit accounts.
Why use a security deposit account in {{ state }}
Security deposit funds are instantly separated, making move-in, move-out, and returns completely clear.
Benefits for property
owners
Repair and maintenance
Covers property damage such as paint, carpet, or floor damage, including costs caused by pets.
Fund separation
Meet state requirements for holding deposits in a dedicated tenant security deposit account.
Streamlined returns
Simplifies refunding tenants while accounting for deductions like cleaning or unpaid utilities.
Benefits for tenants
Fair protection
Funds are protected from misuse, covering only actual repair costs like cleaning, carpet replacement, or floor damage.
Transparency on deductions
Tenants can clearly see allowable charges, protecting against unfair claims on normal wear and tear.
Savings potential
Deposits may be held in a tenant security deposit account or rental deposit account that earns security deposit interest, helping tenants recover more than they put in.
{{ state }} security deposit account
A dedicated security deposit bank account in California isn’t required, but it’s still recommended to hold tenants’ security deposits in California in a separate account to avoid commingling of funds.
{{ state }} security deposit
limits
Before July 1, 2024, the maximum security deposit in California was up to two times the rent (or three times for a furnished place). But after that, the limit drops to only one month's rent. The limit includes collecting the first and last month's rent plus another deposit, which is lower than the average security deposit.
{{ state }} security deposit interest
State law security deposit doesn’t require you to put the tenant’s deposit in an interest-bearing account. So, you don’t need to pay an interest security deposit in California, and the security deposit interest rate is zero.
Go beyond standard security deposit accounts
Collect, return, and track deposits by tenant and
property, even when funds are held in external accounts.
{{ state }} security deposit accounts
Hold each security deposit in separate non-interest or interest-bearing accounts that earn up to [v="apyvalue"] APY².
Unlimited accounts for all entities
Manage deposits for all entities under one login — LLCs, corporations, partnerships, and individuals.
Free online payments
Collect rent and deposits online for free and easily return deposits via ACH, wire, or check.
Automated bookkeeping
Track and tag payments to the right tenant and property — automatically.
Essentials for every door
Everything you need for every part of the rental process.
Lease creation and e-sign
Upload or create and e-sign state-specific leases online.
Free tenant screening
Screen tenants online for free — instantly verify credit, background, evictions, ID, and income.
Property-specific accounts
Open unlimited checking and savings accounts to easily separate funds for all your properties with no monthly maintenance fees.
{{ state }} security deposit rules
1 month’s rent
No official guidelines
A security deposit escrow account in California isn’t required, but it’s still recommended to hold deposits in a separate bank account to avoid commingling of funds.
Overdue rent, damages beyond normal wear and tear, cleaning, and furniture replacement or restoration (only if the agreement says so)
21 days
Additional resources
ARTICLE
How to collect security deposits
FAQs
How much security deposit can a landlord charge in California?
Before July 1, 2024, the California security deposit limit is up to two times the rent (or three times for a furnished place). But after that, the limit drops to only one month's rent. The limit includes collecting the first and last month's rent plus another deposit.
Is interest required on tenant security deposits in California?
No, California security deposit interest rules don’t require a landlord to pay interest on funds held in a landlord tenant security deposit bank account in California.
How should I issue a security deposit receipt to tenants in California?
You do not need to provide a receipt for a security deposit. But, within 21 days of a tenant moving out, you must send an itemized statement detailing any deductions. If you did the repairs, the statement must show work, time, and hourly rate; if you hired outside help, send a copy of the bill. If repairs take longer than 21 days, send a good-faith cost estimate, followed by the final statement within 14 days of completion.
How many days to return a security deposit in California?
Return either the full amount of the tenant’s security deposit in California within 21 days or an itemized list of deductions along with the remaining amount. Tenants can sue to recover their actual loss, plus up to twice the deposit amount (double damages), if you acted in bad faith.
What can a landlord deduct from a security deposit in California?
A landlord can deduct money from the security deposit to recover past-due rent, the cost of repairing damages beyond ordinary wear and tear), the cost of cleaning the apartment, condo, or house rental, and the cost of restoring or replacing the landlord's personal property (like keys or furniture) if allowed by the rental agreement.
Can a security deposit be used for unpaid rent in California?
Yes, the security deposit can be used for unpaid rent. This is one of the legally allowed deductions from the security deposit escrow account in California.
Can landlords keep a security deposit for breaking a lease in California?
Yes, a landlord's security deposit in California can be used if a tenant breaks their lease early. Landlord's rights security deposit rules allow you to deduct for any past-due rent, which can even include rent for the rest of the lease until you find a new tenant.
