AB 2801: California’s New Security Deposit Rules (2025 Update)

California isn’t done changing the rules on security deposits. After AB 12 capped deposits at one month’s rent in 2024, AB 2801 takes effect on April 1, 2025 and brings new requirements for how landlords handle deposits before, during, and after tenancy.  (SCRHA)

Here’s what you need to know.

1. Move-In & Move-Out Photos Are Required

Landlords must now take photos of the property’s condition both before tenants move in and after they move out.

• Photos must show the condition of each room clearly.

• Videos are not enough — photos are required by law.

• If repairs or cleaning are done during turnover, you must also take photos documenting that work.

2. Pre-Move-Out Inspections Matter More

You must offer tenants a pre-move-out inspection and provide a list of repairs or cleaning that could be deducted.

• If you don’t identify something during that inspection, you cannot deduct it later from the deposit.

• Careful documentation is now critical.

3. Cleaning Charges Are Narrower

You may only deduct for cleaning if it’s needed to return the unit to the condition it was in at move-in (minus normal wear and tear).

• Normal wear = faded paint, minor carpet wear, light scuffs.

• You can’t charge for “freshening up” — only for cleaning beyond reasonable use.

4. Penalties for Violations

If you don’t follow AB 2801’s requirements:

• You may lose the ability to deduct expenses from the deposit.

• Tenants may sue for the return of their deposit, plus damages and attorney’s fees.

• Courts can impose penalties under California Civil Code § 1950.5.

5. Why This Matters for Landlords

For years, California law gave landlords more flexibility with deposits. Now:

• AB 12 capped deposits at 1x the monthly rent (with narrow exemptions).

• AB 2801 adds strict rules on inspections, cleaning, and documentation.

Together, these laws shift more responsibility onto landlords and create more opportunities for disputes if you don’t comply.

6. Mission City’s Approach

At Mission City, we know these changes add time and complexity. To protect owners, we’ve invested in a system that provides geo-tagged, time-stamped photos that integrate directly with our management software. This ensures we have airtight documentation that stands up in any dispute.

Our process includes:

• Standardized deposit policy: We cap deposits at 1x rent across the board for consistency.

• Photo documentation system: Geo-tagged, time-stamped, and linked to each unit’s file.

• Inspection checklists: Pre-move-out inspections with written notes + photos.

Key Takeaways

• Effective April 1, 2025, AB 2801 requires move-in/out photos, pre-move-out inspections, and tighter rules on cleaning deductions.

• Combined with AB 12, deposits are capped at 1 month’s rent, with very few exceptions.

• Noncompliance = lawsuits, penalties, and loss of deposit deductions.

• Mission City’s systems are already aligned to keep owners protected and compliant.