If you own a rental in Santa Cruz County, the deposit rules that matter are mostly statewide, and several of them changed in 2025 and 2026. The cap is generally one month’s rent, you have 21 days after move-out to return what remains with an itemized statement, and you now need photographs if you deduct for repairs or cleaning.
This article is for general information only. It is not legal advice. Rules depend on the property address and can change. Confirm current law with the official sources linked below, or with a licensed California attorney, before you collect a deposit, serve a notice, or make a deduction.
How much security can I collect in 2026?
For most residential rentals, a landlord may not demand or receive security of more than one month’s rent, in addition to first month’s rent paid on or before move-in.
“Security” is broader than a line labeled “security deposit.” Civil Code section 1950.5 covers any payment, fee, deposit, or charge imposed at the beginning of the tenancy, including an advance payment of rent, with a limited exception for application screening fees under section 1950.6. A pet deposit or up-front “cleaning fee” still counts toward the cap if it meets that definition.
A narrow exception allows up to two months’ rent if the landlord is a natural person, or an LLC whose members are all natural persons, and the landlord owns no more than two residential rental properties that together include no more than four dwelling units offered for rent. “Natural person” can include a settlor or beneficiary of a family trust, as the statute defines that term. That two-month exception does not apply if the prospective tenant is a service member, and a landlord may not refuse to rent to a service member because of that limit. The new cap subdivision does not apply to security collected or demanded before July 1, 2024.
A lease may not call any security “nonrefundable.”
What can I deduct from a deposit?
You may use the security only for amounts reasonably necessary for unpaid rent, damage beyond ordinary wear and tear caused by the tenant or a guest, cleaning needed to return the unit to its move-in cleanliness, and, if the rental agreement allows it, restoring or replacing certain personal property or appurtenances, excluding ordinary wear and tear.
You may not claim for damage or conditions that were already there, for ordinary wear and tear, or for professional carpet cleaning or other professional cleaning unless that work is reasonably necessary to return the unit to its move-in condition, exclusive of wear and tear. Claims for materials and work are limited to a reasonable amount needed for that restoration.
Do I have to take photographs?
Yes, if you want to deduct for repairs or cleaning, and in some cases even if you do not. For tenancies that begin on or after July 1, 2025, the landlord must photograph the unit immediately before, or at the start of, the tenancy. Beginning April 1, 2025, the landlord must also photograph the unit within a reasonable time after getting the unit back, but before any repairs or cleanings that will be deducted, and again within a reasonable time after that work is finished.
If you deduct for allowed repairs or cleaning, those photographs must go out with the itemized statement, along with a written explanation of the cost. You may send the photos by mail, email, flash drive, or a link the tenant can use to view them online.
These photo rules were added by Assembly Bill 2801.
When do I have to return the deposit?
No later than 21 calendar days after the tenant vacates, you must give the tenant an itemized statement of the security received and how it was applied, and return any remaining balance.
Along with that statement, you generally must include invoices or, if you or your employee did the work, a reasonable description of the work, the time spent, and a reasonable hourly rate. If a repair cannot reasonably be finished, or a vendor document is not in hand, within 21 days, you may include a good-faith estimate and then finish the documentation within 14 calendar days after the repair is done or the documents arrive. If repair and cleaning deductions together are $125 or less, the invoices are not required unless the tenant asks for them within 14 days of receiving the itemized statement.
Assembly Bill 414, effective January 1, 2026, changed how the remainder may be returned. If you received the security or rent electronically, you generally must return the remainder electronically to an account the tenant designates in writing, or by another electronic method the tenant agrees to in writing, unless you have a written agreement on a different method, such as a mailed check. If more than one adult tenant is on the agreement, the default is a check payable to all of them, with the itemized statement sent to one adult tenant you choose, unless everyone has a written agreement that says otherwise.
If a landlord, in bad faith, fails to comply with the itemized-statement rules, the landlord is not entitled to claim any of the security. A bad-faith claim or retention can also lead to statutory damages of up to twice the amount of the security, plus actual damages.
Should I offer a pre-move-out inspection?
Yes, you should offer it, because the statute requires written notice of the tenant’s option to request one.
After either party gives notice to end the tenancy, or before the end of a fixed term, you must tell the tenant in writing that they may request an initial inspection and may be present. If they request it, the inspection may not be earlier than two weeks before the termination or lease-end date. You must give at least 48 hours’ written notice of the date and time unless both of you sign a waiver. After the inspection, you give the tenant an itemized list of proposed deductions so they have a chance to fix problems before move-out.
What happens to the deposit if I sell the rental?
When your interest in the property ends, including by sale, you must, within a reasonable time, either transfer the remaining security to the buyer and notify the tenant, or return the remaining security to the tenant with the required accounting. Before a voluntary transfer, you must also give the buyer a written statement of the remaining security, any lawful deductions, and which of those two options you chose.
If you are thinking about selling a tenant-occupied rental rather than placing a new tenant, start with a home-value conversation at (831) 291-5043, or see pricing a Santa Cruz rental if you plan to keep the property.
How Andren Homes handles deposits
Deposit accounting is part of full-service management, including move-in and move-out documentation, the itemized statement, and the return timeline. After-hours maintenance is handled by our team and vetted local contractors.
For new management clients who sign by December 31, 2026, our Holiday Rates are a $750 flat placement fee, 10% monthly management, and free lease renewals, with no setup, advertising, or inspection fees, and a 6-month minimum term, then month-to-month. We make only two guarantees: if a tenant we placed leaves during their lease, we place the next one free; and we answer owner messages within one business day. See services and pricing. Andren Homes manages 140+ doors in Santa Cruz County.
Frequently asked questions
What is the maximum security deposit in California in 2026?
For most residential rentals, one month’s rent, in addition to first month’s rent paid on or before move-in. A small-landlord exception can allow up to two months’ rent, but it does not apply if the prospective tenant is a service member. Confirm whether you qualify under Civil Code section 1950.5.
Do pet deposits count toward the one-month cap?
Usually yes. “Security” includes most payments, fees, deposits, or charges imposed at the start of the tenancy, however they are labeled. Application screening fees under Civil Code section 1950.6 are treated separately.
How many days do I have to return a security deposit in California?
No later than 21 calendar days after the tenant vacates, you must provide the itemized statement and return any remaining balance, including required invoices or estimates and, when you deduct for repairs or cleaning, the required photographs.
Do I have to photograph the unit in 2026?
For tenancies beginning on or after July 1, 2025, yes, at the start of the tenancy. From April 1, 2025, you must also photograph the unit after move-out, before deducted repairs or cleaning, and again after that work, and include those photos with the itemized statement when you deduct for that work.
What if I sell my rental while a tenant still lives there?
You must transfer the remaining deposit to the buyer and notify the tenant, or return it to the tenant with the required accounting. The buyer generally steps into your shoes on the tenancy. Talk with a licensed attorney before you serve any notice related to a sale.
How do I get help from Andren Homes?
Request a free rental analysis or call (831) 291-5043. We will start with the address, a recommended rent, and a clear scope of work.
If you want a review of rent, deposit practices, and which rules apply at your Santa Cruz County address, we will follow up within one business day. Start with a free rental analysis, or call (831) 291-5043.