Security Deposit Rules
in Your Lease
What it actually means, what California law says, what's specific to San Francisco - and exactly what to do. In plain English.
Quick Summary - What You Need to Know
- California caps the deposit at one month's rent under Civ. Code § 1950.5(c)(1), for money demanded on or after July 1, 2024.
- Your itemized statement and whatever is left of the money are due 21 calendar days after you hand back the keys.
- San Francisco adds a rule the state does not have: Admin. Code § 49.2 makes your landlord pay simple interest on a deposit held a year or more.
- The Rent Board resets that rate every March 1. It is 4.2% for the year ending February 28, 2027.
- Since April 1, 2025 your landlord has to photograph the unit before doing work they charge you for, and send you those photos with the deductions.
Understanding the Security Deposit Rules
Two numbers decide a San Francisco deposit fight: how much your landlord could take at the start, and how quickly they owe you an accounting at the end. Both come from state statute, so the lease cannot move them.
San Francisco then adds a third number the rest of California does not have. Your deposit earns interest here, and that interest runs on a clock of its own.
What renters assume
That a security deposit simply sits in a landlord's account earning nothing for you until the day you move out.
What is actually true
San Francisco Administrative Code § 49.2 makes your landlord pay you simple interest on any deposit held a year or more.
San Francisco has no row of its own on this chart. The research record behind it carries one city per state, so California's row is the one that governs a San Francisco lease, and the one month printed on it is the ceiling here. Four of the sixteen rows read one month; Nevada sits highest at three.
Plain English Version
Your deposit is your money on loan. Your landlord parks it, pays you rent on it once a year for the privilege, and hands back what is left inside three weeks of you leaving, with a written line for every dollar kept.
Security Deposit Forfeiture Example - What the Wording Looks Like in San Francisco, CA
The sample clause below is real lease language - a court quoted it word for word, and then ruled on it. What the judge decided is at the bottom of this block.
Find the equivalent paragraph in your own lease and read the two side by side. The wording will differ; the moving parts rarely do.
If Tenant vacates prior to the Expiration Date (as extended, if applicable), the security deposit shall be forfeited and Tenant shall be obligated for rent payments for the remainder of the term, or until the Property has been re-rented whichever is less.
Quoted from the published opinion in Cromar v. TAG Realty, LLC, No. 87780-1-I (Wash. Ct. App. Div. I, 2026). Judicial opinions are not subject to copyright; the lease language is reproduced in limited part for commentary under 17 U.S.C. § 107.
“extended, if applicable), the security deposit shall be”
Leaving early is the trigger, and the sentence treats the deposit as the penalty for it. California does not let a lease do that: Cal. Civ. Code § 1950.5 caps the deposit at one month's rent since AB 12 took effect on 1 July 2024, and a narrow exception lets a natural person, or an LLC whose members are all natural persons, owning no more than two properties totalling four units, charge two months - never against a service member, who keeps the one-month limit. San Francisco closes the side door: S.F. Admin. Code § 49.4 makes a waiver of the chapter void, so a lease cannot sign away what Chapter 49 gives you.
“forfeited and Tenant shall be obligated for rent payments for the”
Two demands in one clause: keep the deposit and keep charging rent. The second is the one with a clock on it in San Francisco. S.F. Admin. Code § 49.2(b) makes the interest payment annual, on the anniversary of receipt, as cash or a rent credit at the landlord's choice, and § 49.2(c) makes pro rata interest due two weeks after the tenancy ends. That is the part a departing tenant forgets to ask for, because the argument is usually about the deposit rather than about what the deposit earned while it sat there.
“remainder of the term”
The phrase prices your exit at every month left on the page. It is also the point where the city layer stops and the state layer answers. Chapter 37, the Rent Ordinance, was read here - its section index plus the bodies of § 37.2 and § 37.3 - and no deposit provision appears in either, so the rent that remains owing after an early exit is a state-law and contract question rather than a Rent Board one. What San Francisco does say about the money already held is in § 49.3, which routes the remedies through Cal. Civ. Code § 1950.5(f), (g), (h) and (j) rather than inventing its own.
“re-rented whichever is less”
The last words are the tenant's protection in this sentence: the rent obligation stops when the unit is re-let. San Francisco's interest duty runs on a different trigger and does not stop with it - § 49.2(a) attaches to any deposit held a year or more, and § 49.2(c) makes the pro rata payment due two weeks after you vacate whether the unit re-lets the next day or sits empty. That is the substantive split from Los Angeles, where the interest duty under LAMC § 151.06.02 reaches rent-stabilized units only, while San Francisco's reaches any landlord subject to § 1950.5.
Held unlawful, and the tenants were awarded double damages. They broke the lease early to buy a home. The landlord issued a move-out statement headed “EARLY TERMINATION SECURITY DEPOSIT FORFEIT” and told them no refund was due. The court held the forfeiture clause could not override the statute governing what a landlord may actually keep.
One court, one lease, one state. That answer is not automatically yours, and your lease may be worded to land differently. Use this to know what to look for and what to ask - your state's tenant hotline or a local tenant attorney can answer it for your document.
California Law on Security Deposit Rules
- Since AB 12 took effect July 1, 2024, the cap is one month's rent whether the unit is furnished or unfurnished.
- A narrow exception lets a natural person, or an LLC whose members are all natural persons, owning no more than two properties totaling four units, charge two months.
- That two-month exception never applies to a service member, who keeps the one-month limit.
- The deposit and an itemized statement are due back no later than 21 calendar days after the tenant vacates.
Sources include Cal. Civ. Code § 1950.5 - statutes change; verify the current text for your situation.
Civil Code § 1950.5(c)(1) lets a landlord demand security worth one month's rent, on top of the first month's rent paid at move-in. Subdivision (c)(6) sets the start line: the cap governs money collected or demanded on or after July 1, 2024. One exception survives in (c)(5). It reaches a landlord who is a natural person, or a limited liability company whose members are all natural persons, and who owns no more than two residential rental properties that together offer no more than four dwelling units for rent. That landlord may ask two months. Subparagraph (B) switches the exception off completely when the prospective tenant is a service member, and bars a landlord from refusing the tenancy on that ground. Texas and Florida write no ceiling at all, and Nevada allows three months, so a California lease starts from a far lower number than a chart neighbour would suggest.
The back end runs on § 1950.5(h). Inside 21 calendar days of you vacating, the landlord owes an itemized statement of each deduction plus the remainder of the money. Receipts, invoices and hourly rates travel with that statement, unless the repairs and cleaning together come to $125 or less. Where the paperwork is missing, subdivision (h)(5) lets you ask for it inside 14 calendar days of the statement, and the landlord gets 14 calendar days to produce it. Subdivision (m) prices bad faith at up to twice the security plus actual damages, and puts the burden of proving each deduction on the landlord. Subdivision (n) bars a lease from describing any part of the security as nonrefundable.
California Tenant Protections
Your ceiling is one month's rent unless your landlord fits the narrow two-property, four-unit exception, and a service member stays at one month whatever the ownership looks like. The accounting is due inside 21 calendar days of you vacating. In San Francisco you are also owed simple interest once the deposit has sat for a year, and § 49.4 makes any waiver of that void.
What's Specific to San Francisco
Figures are the state rule, or the stronger city ordinance where one exists. Verify the current law for your own situation before relying on it.
The San Francisco layer is Administrative Code Chapter 49, not the Rent Ordinance. Section 49.2(a) says a landlord subject to Civil Code § 1950.5 shall pay simple interest on a security deposit held at least one year, and it carves out only one situation: where the rent is assisted or subsidized by a government unit, agency or authority. Rent control is not the test, so a deposit on a newer building outside the Rent Ordinance still earns interest. Section 49.2(b) fixes the timing at the anniversary of the day your landlord received the money, paid either as cash or as a credit against rent, with the choice belonging to the landlord. Section 49.2(c) sets a second and shorter clock: when the tenancy ends, the pro rata interest is due no later than two weeks after you vacate, ahead of the state's 21 days for the deposit itself. Section 49.2(f) hands the rate to the Rent Board effective March 1 each year, and (f)(3) ties it to the annual average of the Federal Reserve's 90-day AA financial commercial paper rate for the previous calendar year, rounded to a tenth. That is 4.2% for the year that began March 1, 2026. Section 49.2(e) lets a landlord subtract the annual Rent Board fee reimbursement allowed by § 37A.6 from your next interest payment, so a smaller figure is not automatically a shortfall. Section 49.4 makes any waiver of these rights void.
Here is what we read, so you can weigh the negative. We read all five sections of Chapter 49, §§ 49.1 through 49.5, in full: once on the Rent Board's own published copy of the chapter and again in the city's code library. For the Rent Ordinance we read the section list of Chapter 37, §§ 37.1 through 37.16, and the text of § 37.2 and § 37.3. Nothing in what we read there sets a deposit ceiling, a refund deadline or an interest rule, so the local layer on this clause is Chapter 49 and the cap is the state's. We did not read every section body in Chapter 37, and Chapter 49 was last amended in 2014, so check the current text before you rely on either.
That is the § 1950.5(c)(1) ceiling unless your landlord fits the two-property, four-unit exception.
San Francisco owes you annual interest as cash or a rent credit. Silence in the lease does not cancel it.
Section 1950.5(n) bars that word outright. A cleaning fee written as nonrefundable is still security.
The statute allows 21 calendar days. A longer window written into a lease is not the one that binds.
Sources
The law this guide relies on, and where to read it. Statutes change, so confirm the current text before you act on it.
- Cal. Civ. Code § 1950.5 on leginfo.legislature.ca.gov, California's own publication of its statutes.
- The San Francisco layer: S.F. Admin. Code Chapter 49, the City's own copy published by the Rent Board, carrying § 49.1 to 49.5 and the Ord. 233-14 amendment line (App. 11/26/2014, Eff. 12/26/2014). The deposit interest rate is set by formula in § 49.2(f) and published by the Rent Board each January - 4.2% for 1 March 2026 to 28 February 2027. The Rent Ordinance sections this guide names, § 37.2, 37.3 and 37A.6, were read on an archived copy of the Administrative Code rather than on a live dated code page, so confirm those on the City's own site.
Red Flags to Watch Out For
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Two months from a management company
Subdivision (c)(5) reaches only a natural person, or an LLC of natural persons, owning two residential rental properties at most with four dwelling units between them. A property manager is outside it, and so is any request aimed at a service member.
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No interest terms in a San Francisco lease
Chapter 49 applies to any landlord subject to § 1950.5, rent controlled or not. A lease that never mentions interest has not escaped § 49.2, and § 49.4 voids a waiver.
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A deposit called nonrefundable
Section 1950.5(n) forbids that wording. Renaming security as a move-in fee or a cleaning fee does not change what it is or what has to come back.
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Deductions with no photographs
Since April 1, 2025 your landlord must photograph the unit before and after work they charge you for, and § 1950.5(h)(2)(D) makes them send those photos with the itemized statement.
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A charge for professional carpet cleaning
Under § 1950.5(e)(2)(C) that cost is chargeable only where it is reasonably necessary to return the unit to its move-in condition, wear and tear excluded. A routine line item is not that.
Your Rights as a San Francisco Tenant
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A month's rent, and no more
Security is capped at one month's rent for a landlord outside the narrow two-property exception, and for every service member.
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Interest on a deposit held a year
San Francisco Admin. Code § 49.2 owes you simple interest, 4.2% for the year that began March 1, 2026, paid on the anniversary of the day the money was received.
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Twenty-one days for the money
Section 1950.5(h)(1) puts the itemized statement and the remaining money in your hands inside 21 calendar days of you leaving.
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Two weeks for the interest
Section 49.2(c) gives your landlord two weeks from the day you vacate to pay the pro rata interest still owed.
What To Do - Step by Step
Photograph the unit at move-in
Date the images and cover each room, the flooring and every appliance. On a tenancy starting on or after July 1, 2025 your landlord takes their own move-in set, and yours is what you read it against.
Write down your annual due date
Interest falls due on the month and day your landlord received the deposit. Diary it, because nobody else will remind you.
Ask for the interest in writing
Email a dated request naming § 49.2 and the anniversary date. A rent credit counts as payment, so read your ledger before you chase.
Shoot the same rooms on the way out
Repeat your move-in images and add video as you leave, so the two sets line up room by room.
Demand the statement and the photos
Once the 21st day goes by with nothing, send a dated written demand for the itemized statement, the receipts and the photographs.
File in small claims
Section 1950.5(o) sends deposit claims to small claims court, and § 49.3 points the Chapter 49 remedies back into that same statute.