This guide breaks down every major change under California rental law 2026 in plain English, with a compliance checklist you can use for your next move-in or move-out.

The New Deposit Cap: AB 12 (Effective July 1, 2024)

The biggest headline change came from AB 12, which slashed the maximum security deposit landlords can collect. AB 12 also eliminated the old furnished/unfurnished distinction:

• All rental units: Maximum 1 month's rent, furnished or unfurnished (down from 2 months unfurnished / 3 months furnished under the prior law)
• Active-duty service members: Maximum 1 month's rent in all cases — the small-landlord exception below does not apply

There is one narrow exception. If you are a natural person (or an LLC treated as a natural person) who owns no more than two residential rental properties with a combined total of four or fewer units, you may still collect up to 2 months' rent — for furnished or unfurnished units. If that exception applies to you, document it carefully and note that it does not apply when the tenant is an active-duty service member.

If you collected a deposit under the old rules and a tenant's lease renews, you are not required to refund the difference — but be aware of this issue going forward for any new leases signed after July 1, 2024.

AB 2801: The Photo Documentation Requirement That Changed Everything

AB 2801 is the law that has California landlords scrambling most. It rolled out in two stages: the move-out photo requirement took effect April 1, 2025, and the move-in photo requirement took effect July 1, 2025. As of July 1, 2025, landlords must take timestamped photographs at three mandatory points in the tenancy:

1. Before the tenant takes possession of the unit (move-in photos)
2. After the tenant vacates, before any cleaning or repairs are started (pre-cleaning move-out photos)
3. After cleaning and repair work is complete (post-repair move-out photos)

These aren't casual smartphone snapshots. The law requires that photos be:

• Timestamped with the date and time
• Taken before the tenancy begins — not a month before, and not after you've already started cleaning
• Taken after the tenant vacates and again after repairs, so you can document both the damage you're charging for and the completed work
• Delivered to the tenant together with the itemized deduction statement, not merely retained and produced on request

This is where many landlords get into trouble. If you can't prove through documentation that damage existed at move-out and didn't exist at move-in, you can't justify a deduction — even if the damage is obvious to everyone in the room. California courts look at paper trails.

The penalty for bad-faith non-compliance is brutal: a landlord can be ordered to pay statutory damages of up to twice the amount of the security under §1950.5(m), in addition to actual damages. Practitioners most commonly apply that figure to the wrongfully withheld portion, but courts have discretion and the statutory text refers to "the security" — the full deposit received. See our full AB 2801 photo documentation guide for the deep dive.

AB 414: Electronic Refund Options (Effective January 1, 2026)

AB 414, effective January 1, 2026, modernizes how landlords return security deposit funds. If you collected rent electronically from the tenant during the tenancy, you must return the deposit the same way — electronic payment — unless you and the tenant agree in writing to another method. The tenant cannot unilaterally demand a mailed check if you collected rent electronically; the alternate method requires mutual written agreement.

Important nuances:

• The trigger is how rent was collected — if you never accepted electronic rent payments, AB 414 does not require you to return the deposit electronically
• Any alternate payment method (like a mailed check) requires a written agreement between you and the tenant
• The 21-day return deadline still applies regardless of payment method
• Keep records of any electronic transaction — confirmation numbers, transfer receipts, and timestamps

The benefit for landlords is real: electronic transfers create an automatic paper trail with a timestamp. If a tenant later claims the deposit was returned late, you have a bank record showing the exact date and time of transfer. That evidence is far cleaner than arguing over when a check was mailed versus received.

AB 628: Working Stove and Refrigerator Required (Effective January 1, 2026)

AB 628 is a habitability statute, not a documentation statute. Effective January 1, 2026, it requires California residential rental units to be provided with a working stove and refrigerator. The rule applies to leases entered into, amended, or extended on or after January 1, 2026. A recalled appliance must be repaired or replaced within 30 days of notice.

What this means in practice:

• For any new or renewed lease on or after January 1, 2026, the unit must include both a working stove and a working refrigerator at move-in
• The tenant may opt to supply their own refrigerator at lease signing (not later), in which case you are not obligated to provide one
• Non-working appliances make the unit untenantable under standard habitability law — you cannot deduct from a tenant's deposit for appliance wear that is your maintenance responsibility
• If an appliance you provided breaks during the tenancy due to normal use (not tenant abuse), repair is your responsibility, not a deductible item
• When a tenant damages an appliance, your AB 2801 move-in photos need to show its condition at move-in compared to the damaged state at move-out

AB 628 reinforces the broader point that rental housing compliance in California is now documentation-heavy. Landlords who have been doing a quick walkthrough with a generic checklist are exposed. Courts want photos, not handwritten notes.

The 21-Day Rule and Itemized Statement Requirement

None of the new laws changed California's foundational security deposit refund timeline — 21 calendar days. Here's what that timeline looks like in practice:

1. Day 0: Tenant vacates the unit
2. As soon as possible: Photograph the property in its move-out condition (required under AB 2801)
3. Within 21 days: Mail or electronically transmit the security deposit refund (or what remains after lawful deductions), accompanied by an itemized statement of deductions
4. For deductions over $125: Attach receipts or invoices from vendors

The 21-day clock does not pause while you wait for invoices from contractors. If you can't get a receipt in time, California law does allow you to send a good-faith estimate with the final accounting — but you must follow up with actual receipts within 14 days after the work is complete. See our guide on California deposit deduction itemized statements for the full breakdown.

Normal Wear and Tear: The Rule Landlords Keep Getting Wrong

Normal wear and tear California law is clear: you cannot deduct it from the security deposit. Period. What qualifies as normal wear and tear?

• Faded paint from sunlight
• Small nail holes from hanging pictures
• Carpet worn thin from regular foot traffic
• Minor scuffs on walls from furniture placement
• Dirty grout from normal use over time

What does not qualify as normal wear and tear:

• Large holes in walls
• Burns on carpet or countertops
• Broken fixtures, doors, or windows caused by tenant
• Pet stains and odors requiring professional remediation
• Excessive filth requiring deep cleaning beyond standard turnover

The reason landlords lose deposit disputes so often is not that they're trying to cheat tenants — it's that they're making deductions for things that courts classify as normal wear and tear. Good photo documentation showing the actual damage (not just general shabbiness) is what separates a defensible deduction from a refunded one.

2026 California Landlord Security Deposit Compliance Checklist

Use this checklist for every rental unit, every tenancy:

• Confirm deposit collected does not exceed legal cap under AB 12 (1 month for all units; up to 2 months only if you qualify as a small landlord — natural person or natural-person LLC owning no more than 2 residential rental properties with 4 or fewer total units)
• Document exception status if you qualify as a small landlord exempt from the 1-month cap
• Take timestamped move-in photos of every room, closet, appliance, and outdoor area (AB 2801)
• Document appliance condition at move-in with photos and written notes (AB 628)
• Complete and have tenant sign a written move-in inspection report
• Offer tenant a pre-move-out inspection 2 weeks before move-out (CC §1950.5(f))
• Take timestamped move-out photos before starting any cleaning or repairs (AB 2801)
• Photograph appliance condition at move-out (AB 628)
• Send itemized deduction statement and refund within 21 calendar days of move-out
• Attach receipts for any deduction over $125
• Document electronic refund consent in writing if using AB 414 electronic transfer
• Retain all documentation for at least 4 years (California statute of limitations)

California rental law 2026 is not forgiving for landlords who operate on muscle memory from five years ago. The photo documentation requirements under AB 2801 alone represent a fundamental shift in how you need to run your move-in and move-out process. Combine that with the deposit cap changes under AB 12, the appliance requirements under AB 628, and the electronic refund options under AB 414 — and the compliance burden on self-managing landlords is real.

The good news is that with the right systems in place, compliance is not complicated. It's a process — and processes can be automated.

Related: AB 2801 California security deposit photos · California security deposit deductions itemized statement

This article is informational and is not legal advice. California landlord-tenant law changes regularly and the facts of each dispute matter — for your specific situation, consult a qualified attorney or contact your local legal aid office.