Security deposits can be one of the most confusing parts of managing a rental property. Ask ten landlords how much you can collect or what you can deduct, and you will often hear ten different answers.

Recent changes in California law have tightened security deposit limits and left many San Diego landlords wondering what they can and cannot do.

This guide gives a high‑level overview of:

– How much you can collect as a security deposit.
– What security deposits can be used for.
– Timelines for returning deposits.
– Documentation tips to avoid disputes with tenants.

This article is for general educational purposes only and is not legal advice. Always confirm the current law and consult a qualified professional for guidance on your specific situation.

1. Security Deposit Limits: How Much Can You Collect?

California law now sets stricter limits on residential security deposits than in the past. For many standard residential rentals, the maximum security deposit you can collect on a new lease is limited to a set multiple of monthly rent, which in many cases is now one month’s rent.

There are narrow exceptions for certain small landlords that may allow a higher deposit amount under specific conditions. However, many owners will fall under the simple rule that the security deposit on a new residential lease cannot exceed one month’s rent. Because the rules are detailed and can change over time, landlords should review their lease templates, onboarding checklists, and any automated systems to make sure they are not accidentally requesting more than the law allows.

2. What Security Deposits Can Be Used For

In general, California rules allow landlords to use a residential security deposit for specific purposes related to the tenancy, such as:

– Unpaid rent owed under the lease.
– Repair of damage caused by the tenant or guests beyond normal wear and tear.
– Cleaning needed to restore the unit to the level of cleanliness it had at move‑in.
– Replacing or repairing furnishings or items if the lease allows and if damage exceeds normal use.

Security deposits cannot be used to pay for normal wear and tear, upgrades you simply want to do at turnover, or costs that are not tied to the tenancy or condition of the unit. Keeping your decisions tied to clear, documented damage and obligations in the lease is key.

3. Timelines for Returning Security Deposits

California law requires landlords to return the unused portion of a security deposit and provide an itemized statement of any deductions within a set period after the tenant moves out.

Within that deadline, the landlord generally must:

– Provide a written itemized statement explaining each deduction.
– Include copies of invoices or receipts where required.
– Return any remaining deposit funds to the tenant.

If work is not completed yet, the law may allow reasonable estimates, followed by updated documentation once work is finished. Missing the deadline or providing vague statements is a common source of deposit disputes.

4. Move‑ In Documentation: Your Best Protection

Most disputes over security deposits are really disputes over the property’s condition and the lack of documentation, not just disagreement about the law.

To protect yourself and treat tenants fairly, it is smart to:

– Complete a detailed move‑in inspection and checklist with the tenant.
– Take clear photos or video of each room, appliance, and surface at move‑in.
– Note existing wear and tear in writing and have both parties sign the report.
– Store this documentation in a place where you can easily retrieve it later.

At move‑out, a similar inspection with updated photos allows you to compare before‑and‑after condition. When you can show the difference, it is much easier to explain legitimate deductions and resolve questions calmly.

5. Normal Wear and Tear vs. Damage

A frequent point of tension is the difference between normal wear and tear and actual damage.

Examples of normal wear and tear might include:

– Light traffic patterns in carpet over several years.
– Small nail holes from hanging pictures.
– Minor scuffs on walls or flooring from everyday use.

Examples of damage might include:

– Large stains or burns on carpet.
– Broken doors, windows, or fixtures due to misuse.
– Holes in walls that require patching and repainting beyond simple touch‑up.

Security deposits are meant to cover unpaid rent, cleaning, and damage beyond normal wear and tear—not to give the property a brand‑new remodel at the tenant’s expense.

6. Common Mistakes San Diego Landlords Make With Deposits

Even well‑intentioned landlords can make costly mistakes with security deposits. Some common issues include:

– Charging more than the legal maximum for a new lease.
– Failing to provide a written, itemized statement of deductions on time.
– Treating ordinary wear and tear as damage.
– Doing little or no documentation at move‑in and move‑out.
– Using deposit language or collection practices that conflict with current law.

Reviewing your systems now—your lease language, checklists, timelines, and communication templates—can prevent misunderstandings and disputes later.

7. How Security Deposits Fit Into Your Overall Risk Strategy

Security deposits are just one piece of your risk‑management plan as a landlord. They work best alongside:

– Careful tenant screening, so you are more likely to place responsible renters.
– Appropriate insurance coverage for the property.
– Routine inspections to catch issues early.
– Clear move‑in and move‑out expectations communicated to tenants.

If you treat the deposit as a targeted tool to cover specific, legally allowed costs—rather than a cure‑all—you will make better decisions when a tenant moves out.

8. When to Get Professional Help

There are times when it makes sense to get professional advice about a security deposit issue, such as:

– A disagreement involving a large dollar amount relative to the deposit.
– A tenant threatening legal action or filing in small claims court.
– Uncertainty about how new laws apply to your specific situation.

A local attorney or experienced property manager can help you review your documentation, evaluate your position, and choose the best next steps.