Recent Amendments to California Civil Code Section 1950.5: What Landlords and Tenants Need to Know
California renters and landlords alike should take note: the rules around residential security deposits have changed. Amendments to Civil Code § 1950.5, phased in beginning July 2024, significantly reshape how deposits can be collected, documented, and returned. These reforms aim to lower upfront housing costs for tenants while holding landlords to stricter standards of transparency and accountability.
One-Month Deposit Cap
The most significant change is the new cap on deposit amounts. Starting July 1, 2024, landlords may not collect more than one month’s rent as a security deposit, regardless of whether the rental is furnished or unfurnished. The law includes a narrow exception for smaller landlords: if the owner is a natural person (or an LLC made up entirely of natural persons) who owns no more than two rental properties totaling four or fewer units, they may still collect up to two months’ rent. Deposits collected before July 1, 2024, remain governed by the prior rules.
Limits on Deductions
Landlords may still use security deposits for unpaid rent, restoring the unit to its original condition (beyond ordinary wear and tear), and cleaning reasonably necessary to return the property to its move-in state. However, the law now makes clear that deductions must be reasonably necessary and cannot cover pre-existing issues. “Professional cleaning” charges, such as automatic carpet cleaning, are prohibited unless justified by the unit’s condition (“The landlord shall not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.”).
Stronger Inspection Rights
Tenants have long had the right to request an initial inspection before move-out. Under the new amendments, this inspection takes on greater importance: any deduction must align with the landlord’s written inspection statement. Landlords cannot tack on new charges later for items they failed to identify during that walkthrough. This change protects tenants from surprise deductions at the end of a lease.
Mandatory Photographs
The Legislature also added a new requirement for photographic documentation. Beginning April 1, 2025, landlords must take dated photos after a tenant vacates—both before and after any repairs or cleaning. For new tenancies beginning July 1, 2025, landlords must also document the unit’s condition with photographs at move-in. These records provide objective evidence that can resolve disputes more fairly.
Penalties for Bad Faith
The law carries real consequences for noncompliance. A landlord who wrongfully retains a deposit or fails to provide required statements, invoices, or photographs may be liable for up to twice the deposit amount in statutory damages, in addition to actual damages. In practice, this means a mishandled $2,000 deposit could expose a landlord to a $4,000+ claim.
What This Means
For tenants, these changes ease the financial burden of moving and increase protection against unfair deductions. For landlords, they create a new compliance landscape: photographs, itemized statements, and careful record-keeping are now essential.
As these reforms continue rolling out through 2025, both landlords and tenants should update their practices to reflect the law’s stricter requirements. Doing so not only ensures compliance but also reduces disputes and fosters fairer landlord-tenant relationships.