Move-in costs in California: security deposits, application fees and what’s legal

The security deposit: one month’s rent

Since July 1, 2024 (AB 12, Civil Code §1950.5), a landlord may not take security of more than one month’s rent, furnished or not, on top of the first month’s rent. Before that the limit was two months unfurnished and three furnished; deposits collected before July 1, 2024 are not affected.

There is one exception. A small landlord may take up to two months, but only if the landlord is an individual (or an LLC owned entirely by individuals, family trusts included) who owns no more than two residential rental properties with no more than four units in total. Even then, a service member pays no more than one month, and a landlord may not refuse to rent to a service member over it.

What counts as “security” is broad: last month’s rent, a move-in fee, a cleaning fee, a pet deposit, a key deposit — anything collected at the start beyond the first month’s rent. A lease may not call any of it “nonrefundable”. The one exception is a lease of six months or more where you prepay at least six months’ rent.

What that means in cash, at today’s median asking rents (first month plus a one-month deposit; screening fees extra):

Application screening fees

A screening fee may cover only the actual cost of checking an applicant — a credit report and reference checks — and is capped at $30 per applicant, adjusted for inflation since 1998 (Civil Code §1950.6). The law leaves the inflation adjustment to the landlord and no state agency publishes an official current figure: the state’s tenant guide gave $62.02 as of December 2023, and the Berkeley Rent Board lists $68.96 for 2026.

• Since January 1, 2025 (AB 2493), a landlord may charge the fee only if it either considers applications first come, first served against written criteria and charges no fee until an application is actually considered, or refunds the whole fee to every applicant not chosen within 7 days of choosing (or 30 days of applying, if sooner).
• No fee may be charged when the landlord knows no unit is available now or soon.
• You are owed an itemized receipt, a refund of any part not spent (for example if no credit report was run), and a copy of your credit report within 7 days of the landlord receiving it.
• If the landlord accepts reusable tenant-screening reports and you provide one, it may not charge a screening fee at all.
• From April 1, 2027 (SB 1296), a landlord must give you its pet policy with the application; if it did not, and the policy then stops you renting, the fee comes back within 7 business days of a written request.

Holding deposits

No statute governs a holding deposit — money paid to hold a unit while your application is pending — so the state Department of Real Estate’s guidance is the rule of thumb: if the landlord turns you down, or rents to someone else while you still want the unit, you get it all back; if you change your mind, the landlord may keep some or all of it to cover actual costs, such as lost rent. Get the terms in writing. If the holding deposit is later turned into your security deposit, it is part of that deposit — and so inside the one-month cap.

Getting your deposit back

• Within 21 days of move-out the landlord must return the deposit, or send an itemized statement of what it kept and why.
• Deductions are limited to unpaid rent, damage beyond normal wear and tear, cleaning back to move-in condition, and items the lease lets the landlord restore — never pre-existing damage or ordinary wear. Professional cleaning can be charged only if it is needed to restore move-in condition.
• Photos (AB 2801): for tenancies starting on or after July 1, 2025 the landlord must photograph the unit at move-in, and since April 1, 2025 it must photograph it after move-out (before repairs and again after) to back any repair or cleaning deduction. Take your own photos too.
• Repair and cleaning deductions must come with receipts or invoices — automatically when they total more than $125, and if you ask within 14 days when they total less.
• You can ask for a pre-move-out inspection up to two weeks before you leave, to fix problems first.
• Since January 1, 2026 (AB 414), a deposit paid electronically must be refunded electronically unless you agree otherwise in writing.
• Keeping a deposit in bad faith can cost the landlord up to twice the deposit in damages on top of actual losses; small claims court handles these disputes.

Fees a landlord cannot charge

• A fee for paying rent or the deposit by check — and a landlord must accept at least one form of payment that is neither cash nor electronic transfer (SB 611, since 2025).
• A fee for serving or posting a notice.
• A bulk internet, cellular or satellite subscription you opt out of (AB 1414, since January 1, 2026) — if the landlord refuses, you may deduct its cost from the rent.
• More than its actual cost, or more than $10 a month, for reporting your on-time rent to a credit bureau — a service many landlords must now offer.

City extras in the Bay Area

• San Francisco requires landlords to pay interest on deposits held more than a year, on every residential unit except subsidized ones: 4.2% for March 1, 2026 through February 28, 2027.
• Berkeley requires deposit interest too (0.9% for the December 2025 payment; 0.6% for October 2026 move-outs), requires a written statement of screening-fee rights before charging one, and bans non-refundable fees for renewing a lease or adding or replacing a roommate.
• Oakland landlords who pay the city’s rent-program fee on time may pass half of it on — $68.50 of the $137 a year. Alameda allows $7.33 a month on a fully regulated unit and $4.92 on a partially regulated one for 2026-27. San Leandro forbids passing its fee on at all.