California'S Security Deposit Limit: A Guide For Yuba-Sutter & Placer Owners

How the security deposit limit California landlords have followed since July 2024 works, who gets the small-landlord exception, and how local owners can document a deposit.

If you last rented out a home in Yuba City or Roseville before mid-2024, the number you remember for a deposit is probably too high. The security deposit limit California landlords work under changed on July 1, 2024, when Assembly Bill 12 took effect. For most rentals, the most you can collect now is one month's rent on top of the first month's rent.

Here is how the rule works for owners in Yuba-Sutter and Placer County, and where the exceptions are.

What is the most a California landlord can charge for a deposit?

Under Civil Code 1950.5, a California landlord generally may not collect security of more than one month's rent, in addition to the first month's rent paid at move-in. The cap is the same whether the home is furnished or unfurnished. Before AB 12, the law allowed larger deposits, and furnished units could carry more.

The cap applies to new deposits you demand or receive. So if you are re-renting a Marysville duplex or a Lincoln single-family home this winter, plan on one month's rent as the ceiling unless you clearly qualify for the exception below.

What counts toward the security deposit limit in California?

Almost any money collected up front, other than the first month's rent, counts toward the limit. Civil Code 1950.5 defines "security" broadly as any payment, fee, deposit or charge used to cover unpaid rent, damage beyond ordinary wear and tear, cleaning to return the unit to its move-in condition, or similar purposes.

In practice, that means the following generally count together against the one-month cap:

• A Standard Security Deposit
• A Separate Pet Deposit
• A "Move-In Fee" Or "Key Fee" That Works Like Security

The application screening fee is separate. It is governed by Civil Code 1950.6 and has its own limit, so it does not count toward the deposit cap. California law also doesn't allow a lease to call any part of the deposit "nonrefundable."

Who qualifies for the small landlord deposit exception?

Some small owners may still collect up to two months' rent. Under Civil Code 1950.5, the small landlord deposit exception applies when the landlord is a natural person, or an LLC whose members are all natural persons, and owns no more than two residential rental properties that together include no more than four units offered for rent.

A few details matter here:

• A family trust can qualify. The statute treats a person who is a settlor or beneficiary of a family trust as a natural person, where the trust's settlors and beneficiaries are closely related.
• Corporations and LLCs with non-person members don't qualify.
• The count is of rental properties and units, not just the home you're leasing now. An owner with a Yuba City house, a Plumas Lake house and a Wheatland duplex has three properties and is over the line.

If you are close to the line, check with a real estate attorney or your CPA about how your ownership is structured before you collect the higher amount.

Does the exception apply to service members near Beale AFB?

No. Even if you qualify as a small landlord, Civil Code 1950.5 says the two-month exception does not apply when the prospective tenant is a service member, as defined in Military and Veterans Code section 400. For those applicants the one-month cap applies.

The statute also says a landlord can't refuse to rent to a service member because of this rule. That matters in Marysville, Linda, Olivehurst and Wheatland, where many applicants are stationed at Beale Air Force Base. Apply the same screening criteria to every applicant and simply collect no more than one month's rent when the applicant is a service member. If you ever charge a service member more than your standard deposit because of credit or rental history, Civil Code 1950.5 requires a written statement of the amount and reason and the return of the extra after no more than six months if rent is current, so talk with an attorney before doing that.

How should you set the deposit amount for your rental?

Set the deposit at or below the legal cap, state it in writing, and apply the same written deposit policy to every applicant for that home, within any lower limit the law sets for a particular applicant. A consistent, written policy is easier to defend and helps you treat applicants equally under fair housing law.

A practical approach for a Yuba-Sutter or Placer County rental:

1. Confirm the monthly rent first, since the cap is tied to it. Our free rental analysis can help.
2. Decide whether you truly qualify for the small-landlord exception. If you aren't sure, use one month's rent.
3. Add any pet deposit to the security total and keep the combined figure within the cap.
4. List the deposit amount and its allowed uses in the lease.
5. Use the same deposit policy for every applicant, but never collect more than one month's rent from a service member.

Keep in mind that assistance animals are not pets under fair housing rules, so a pet deposit generally can't be charged for them. Our fair housing page covers that in more detail.

What documentation does California now require for deposit deductions?

California now requires photographs to support deposit deductions. Under Civil Code 1950.5, as amended by AB 2801, a landlord must photograph the unit immediately before or at the start of any tenancy that began on or after July 1, 2025. Since April 1, 2025, a landlord must also photograph the unit after the tenant moves out, before repairs or cleaning that will be deducted, and again after that work is done.

When you deduct for repairs or cleaning, the photos go to the tenant with the itemized statement. The law also limits cleaning charges to what is needed to return the unit to the cleanliness it had at move-in, and bars charging for professional carpet cleaning unless it's reasonably necessary for that purpose.

Good documentation habits for a Rocklin townhome or a Live Oak farmhouse look the same:

• Take dated photos of every room, appliance and fixture at move-in.
• Offer the tenant the pre-move-out inspection the statute requires, in writing.
• Photograph again after move-out, and after any repair or cleaning you deduct for.
• Keep receipts and invoices for every deduction.

How long do you have to return a deposit in California?

Under Civil Code 1950.5, a California landlord must return the deposit, or send an itemized statement of deductions with any remaining balance, within 21 days after the tenant moves out. If a repair can't be finished in that time, the statute allows a good-faith estimate, followed by the receipts later.

A landlord who keeps a deposit in bad faith can owe the tenant statutory damages of up to twice the deposit, on top of actual damages. If a dispute looks likely, talk with a landlord-tenant attorney before you decide what to withhold.

Common Questions

Can I raise the deposit when a current tenant renews?

The cap applies to security a landlord demands or receives, so asking a renewing tenant for more than one month's rent in total (two months for a qualifying small landlord, except with a service member) generally isn't allowed. Speak with an attorney before changing deposit terms mid-tenancy.

Does the cap apply to rooms or ADUs?

Civil Code 1950.5 covers residential rental property generally, including an ADU you rent out or a room you rent in a home. The same one-month limit and small-landlord rules generally apply.

Is the application screening fee part of the deposit?

No. In California, the screening fee is covered by Civil Code 1950.6. It has its own cap, adjusted each year, and can't be more than the landlord's actual screening costs plus the reasonable value of the time spent screening. Keep it out of your deposit math.

Talk With Prospect About Your Rental

Setting the deposit, documenting move-in and handling move-out by the book is a big part of protecting your investment. If you own a rental in Yuba-Sutter or Placer County and want a second set of eyes on your lease terms, start with a free rental analysis or see how our tenant placement service works.

Disclosure: This article is general information only. It is not legal or tax advice. Laws and local rules change, so talk with a qualified attorney or tax professional about your specific situation.