Security Deposits and Fees: AB 414 & AB 1414 Explained

Deposit disputes rarely start with bad intentions. They start with a vague lease clause, a charge nobody explained, or a move-out nobody photographed. California's rules on security deposits and fees changed a lot between 2024 and 2025, and two bill numbers keep coming up in searches: AB 414 and AB 1414.

We wrote this guide for owners and tenants in Contra Costa, Alameda, Stanislaus, and San Joaquin counties. North State Financial, Inc. has spent more than two decades handling rent collection, tenant placement and screening, and regulatory compliance for landlords across those four counties. It covers residential tenancies only, and it is general information, not legal advice.

How California defines a security deposit

Civil Code section 1950.5 defines security broadly. It is any payment, fee, deposit, or charge that secures the tenancy, apart from rent itself. That includes money meant to cover unpaid rent, damage, or cleaning, and it includes prepaid rent collected as security.

The label on a charge does not decide anything. Call it a "cleaning fee," a "holding deposit," or a "non-refundable administrative charge," and a court will still look at what the money does. If it secures the tenancy, it is a security deposit and the deposit rules apply.

That is why the first rent payment sits outside the definition but a "last month's rent" payment collected up front does not.

If you are an owner, read every line of your move-in costs with this test in mind. If you are a tenant, ask what each charge is for and whether any of it comes back to you.

AB 414 and AB 1414: what to confirm before you rely on them

Bill numbers repeat. The same "AB 414" can mean different bills in different legislative sessions, and a number copied from a forum post or an old article may point at the wrong one.

We have not confirmed from an official source that either AB 414 or AB 1414 adds a deposit or fee rule that owners must follow today. So we do not describe their provisions here. Guessing at what a bill does is how landlords end up following a rule that never took effect.

You should also know the timing rule. Most statutes enacted in 2026 take effect January 1, 2027 unless the bill names another date, so an owner planning lease changes in late 2026 has a little room, but only if the bill is actually law.

Check each bill's status, chapter, and effective date

Before you change a lease or a fee schedule, look up each bill on the Legislature's official site, leginfo.legislature.ca.gov. Confirm these four things:

• Session: make sure you have the right two-year session for the bill number.
• Status: check whether it was enacted, amended, vetoed, or left pending.
• Chapter number: a signed bill gets a chapter number in the Statutes of that year.
• Effective date: read the bill's own text, since it can differ from January 1.

If the bill history shows anything other than "chaptered," it is not law yet.

Security deposit limits: the one-month cap under AB 12

AB 12 (2023) caps most security deposits at one month's rent, effective July 1, 2024. Before that date, the limit was two months for unfurnished units and three for furnished ones, so the change affects nearly every lease signed or renewed since.

The cap is measured against the monthly rent in the lease. If you are still working out that figure, our explainer on statewide rent caps under AB 1482 shows how much an owner may raise rent in the first place.

How the one-month cap works in practice

Take a typical case: a unit rents for $2,000 a month. The most the landlord can hold as security is $2,000, in total, before any exception applies. That single figure is the first number an owner should check.

"In total" matters. Every payment that secures the tenancy counts toward the same $2,000, whatever it is called.

• A $2,000 deposit alone uses the whole cap.
• A $1,500 deposit leaves $500 for any other security, such as a pet deposit.
• A $1,000 deposit plus $1,000 of prepaid last month's rent also hits the cap.

For tenancies that began before July 1, 2024, we read the cap as applying to agreements made on or after that date, so an owner with a long-standing tenant should not assume a refund is due. Check the enacted text, or ask counsel, before you change anything on an older lease.

Exceptions, pet deposits, and prepaid rent

Pet deposits count toward the cap. So does prepaid last month's rent that the landlord holds as security. Only the first month's rent, paid at move-in, sits outside it.

The statute's exceptions are narrow, and they apply only when the enacted conditions are met. The main one lets a small landlord charge up to two months' rent. Under the text, that means a natural person (or an LLC owned entirely by natural persons) who owns no more than two residential rental properties with four or fewer units in total.

The small-landlord exception does not apply if the tenant is a servicemember. Those tenants get the one-month cap regardless of who owns the unit.

This does not make the cap negotiable. A tenant cannot waive it in a lease, and an owner who collects more than the statute allows is exposed even if the tenant agreed.

Fees at move-in and when a fee counts as a deposit

Fees are where owners most often cross the line without meaning to. A charge that looks harmless on a move-in sheet can turn out to be a deposit in disguise, and that pushes the total over the cap.

Application screening fees

Under Civil Code section 1950.6, a screening fee is limited to the landlord's actual out-of-pocket costs of screening, plus the reasonable value of time spent getting and reviewing the report. The statute also sets a ceiling that is adjusted for inflation each year. Confirm the current figure before you publish a fee, because it moves.

Charge only for screening you actually run, and keep the receipts. Our overview of tenant screening for California landlords shows what the work involves, which helps you set a fee you can defend.

A screening fee is not a way to cover vacancy or marketing costs, and it cannot be used as a hidden deposit.

Pet fees, assistance animals, and non-refundable charges

A charge labeled "non-refundable" can still be treated as security. If the money protects the landlord against damage or default, calling it non-refundable does not take it out of the deposit rules, and the owner may have to return it.

Assistance animals are a separate matter. Fair housing rules generally prohibit pet deposits and pet fees for an assistance animal, because it is not legally a pet. The tenant still owes the cost of any actual damage the animal causes, and the owner can deduct that from the regular deposit like any other damage. Our guide to fair housing rules for landlords covers the request process in more detail.

Move-in and move-out photos as deposit evidence

When a tenant and an owner disagree about a scratched floor, the question is almost always "what did it look like before?" Photos answer that.

AB 2801 (2024), effective April 1, 2025, turned photo documentation into a requirement tied to move-in and move-out condition. Treat it as a documentation rule: the photos set the baseline against which any deduction is judged.

We keep the practical advice simple, since the enacted text controls the exact timing, format, and retention rules, and you should read it before relying on our summary:

• Photograph every room, including closets, appliances, and flooring, at move-in.
• Repeat the same shots at move-out, before any cleaning or repair.
• Keep the files with the lease, with their date stamps intact.
• Give tenants copies, so both sides work from the same record.

Photos do not replace an itemized statement, and they do not turn normal wear into damage. They show the condition; the law still decides what can be charged for it.

Returning the deposit: the 21-day deadline and itemized deductions

Civil Code section 1950.5 gives the landlord 21 days after the tenant vacates to return the deposit or send an itemized statement of deductions. The clock starts when the tenant moves out, not when the lease ends on paper, and a missed deadline is the easiest mistake for a tenant to prove.

If any single repair or cleaning charge is more than $125, the statement needs receipts or invoices. When the landlord does the work personally, the statement should describe the work, the time spent, and the hourly rate.

Bad-faith retention can cost an owner up to twice the deposit in statutory penalties, on top of actual damages, so the paperwork is worth getting right.

What you may deduct

Three categories are deductible, and the statement should tie each charge to one of them.

• Unpaid rent, including rent owed through the end of the notice period.
• Damage beyond normal wear and tear, such as holes in walls, burns in carpet, or broken fixtures.
• Cleaning needed to return the unit to its move-in condition, no more than that.

If your lease allows it, the deposit can also cover restoring or replacing furniture, or the cost of keys. You can only deduct what you actually spend, and move-in photos are what show the "before."

What you may not deduct, and how tenants can dispute a charge

Normal wear and tear is not deductible. Faded paint, small marks from furniture, and carpet worn thin over several years are the cost of owning a rental. An owner also cannot charge a tenant for repairs the landlord owes, such as a failed water heater or a problem covered by habitability and appliance duties under AB 628.

Tenants have two tools if they think a charge is wrong. They can ask in writing for a pre-move-out inspection, which lets the landlord point out items to fix while the tenant can still fix them. If a charge still looks wrong after the statement arrives, they can take it to small claims court.

If you are a tenant, request the inspection early and photograph the unit again on your last day. If you are an owner, do not let the inspection go undone, because it often settles a disagreement before anyone files anything.

Local rules and a pre-move-out checklist

State law is the floor. Cities and counties in our four-county area may add tenant-protection or rent rules on top of it, and the rules in one city may not match the next. Owners should check each property's city, not just its county.

Our summary of new California rent laws for 2026 sits alongside the deposit terms you set, since the two often come up in the same lease.

Owner checklist

• Confirm total security does not exceed one month's rent, or that an exception clearly applies.
• Review every move-in charge for anything that works as a deposit.
• Take dated photos at move-in and again at move-out.
• Offer a pre-move-out inspection in writing.
• Send the deposit or itemized statement, with receipts, within 21 days.

Tenant checklist

• Ask what each move-in charge is for, and keep a copy of the lease.
• Photograph the unit at move-in and on your last day.
• Request a pre-move-out inspection in writing.
• Clean the unit to the condition you found it in.
• Give a forwarding address so the statement reaches you.

This guide is general information, not legal advice. For more on the surrounding rules, our guides on tenant screening, habitability, and rent caps above cover each topic in depth. If you own a rental in Contra Costa, Alameda, Stanislaus, or San Joaquin County and have a question about your own property, you can see how our property management services handle deposits and compliance. For fee questions on the owner side, we also explain property management fees in California.

Frequently asked questions

Can a California landlord charge two months' rent as a security deposit?

Generally no. AB 12 caps most deposits at one month's rent from July 1, 2024. The main exception covers a small landlord who owns no more than two residential rental properties with four or fewer units in total, and it does not apply if the tenant is a servicemember.

Can a landlord charge a pet deposit for a service or emotional support animal?

Generally not. Fair housing rules treat an assistance animal as something other than a pet, so pet deposits and pet fees are prohibited. The tenant remains liable for any actual damage the animal causes, and the owner can deduct that from the regular deposit.

What happens if a landlord misses the 21-day deadline?

The landlord is out of compliance with Civil Code section 1950.5, and the tenant can claim the deposit in small claims court. If a court finds the landlord kept the deposit in bad faith, the penalty can be up to twice the deposit, plus actual damages.

Can a landlord deduct for worn carpet or faded paint?

No. Normal wear and tear is not deductible, and neither are repairs the landlord owes. A landlord can deduct for damage beyond normal wear, such as pet stains or holes in walls, and for cleaning that returns the unit to its move-in condition.