California Security Deposit Law 2026: How Much Can a Landlord Charge?

Short answer: one month's rent, for most California rentals, under AB 12. There's an exception that lets some landlords charge two months — and it trips up more small landlords than any other deposit rule, in both directions.

The general rule

As of July 1, 2024, Assembly Bill 12 (AB 12) caps security deposits at one month's rent, period — regardless of whether the unit is furnished or unfurnished. That replaced the old rule, which allowed up to 2 months unfurnished / 3 months furnished.

The small-landlord exception

You can still charge up to two months' rent if, as the landlord, you meet both of these:

1. You own 2 or fewer rental properties, and
2. Those properties total 4 or fewer units combined.

You also have to be a natural person — not a corporation or REIT — to qualify.

This is the part people get wrong. It's easy to assume "I only have one rental" automatically qualifies you, but the test counts all your rental properties and units, not just the one you're leasing out right now. If you own a single-family rental and a duplex, that's 2 properties / 3 units — still under the cap, still qualifies. Add a third property and you're out, even if each one is tiny.

One exception within the exception: active-duty service members are capped at one month's rent regardless of your landlord status. If your tenant is active-duty military, the 2-month exception doesn't apply to them.

What this means for you right now

• If you qualify for the exception and you're still charging only 1 month, you're leaving money on the table (within legal limits).
• If you don't qualify and you're charging 2 months, you're exposed — a tenant can demand the excess back, and in a dispute, that's an easy win for them.
• Either way, check your property and unit count against the two-part test above before you set the deposit on your next lease, not after.

Beyond the dollar amount

The amount you can charge is only one piece of 2026's deposit rules — there's also a new photo-documentation requirement tied to how you return the deposit, with real financial exposure if you skip it. That's covered in our photo documentation article and in full in the guide.

This article is informational, not legal advice. For your specific situation, especially anything disputed, talk to a California landlord-tenant attorney.