Security deposits in Los Angeles: the local rules

Each rule below links to the section of the Los Angeles Municipal Code it was read from, with the code text one click away (checked October 2026). General information, not legal advice.

What Los Angeles's code says

Los Angeles code What Los Angeles's code adds
When interest is paid	monthly or yearly Applies: Landlord subject to Civil Code 1950.5; RSO deposits held at least 1 year; excludes mobilehome parks; landlord pays directly or credits rent and gives written notice of choice § 151.06.02 · code text The landlord may elect to pay the accrued interest on a monthly or yearly basis. At the same time and in the same manner as the security-deposit return Applies: Landlord subject to Civil Code 1950.5; RSO deposit held at least 1 year; unpaid accrued interest at tenancy termination; excludes mobilehome parks § 151.06.02 · code text D. Upon termination of tenancy, only the tenant whose security deposit has been held for one year or more shall be entitled to payment of any unpaid accumulated interest on the security deposit. Such payment shall be made at the same time and in the same manner as required for return of security deposits in California Civil Code Section 1950.5(f).
Interest on deposits	Yes; yearly, at the Rent Adjustment Commission's annual rate or the actual interest earned on each deposit account Applies: RSO units only, not mobile home parks; deposits held at least 1 year; paid directly or as a rent credit; actual-interest method needs bank statements § 151.06.02 · code text Beginning January 1, 2003, the landlord may determine the annual rate of interest by either of the following methods: yes; annual rate set by RAC or actual interest earned Applies: Landlord subject to Civil Code 1950.5; RSO security deposits held at least 1 year; excludes mobilehome parks; actual-interest method requires bank statements, otherwise RAC rate applies § 151.06.02 · code text B. (Amended by Ord. No. 174,017, Eff. 7/16/01.) A landlord who is subject to the provisions of Section 1950.5 of the California Civil Code shall pay annually interest on all security deposits held for at least one year for their tenants as follows: 1. (Amended by Ord. No. 175,020, Eff. 2/1/03.) Beginning January 1, 2003, the landlord may determine the annual rate of interest by either of the following methods: (a) Using the annual rate of interest established by the Rent Adjustment Commission (RAC). That rate shall be based on the average of the interest rates on savings accounts paid on September 1 of the previous year, by at least five Federal Deposit Insurance Corporation (FDIC) insured banks with branches in Los Angeles. RAC shall adopt the rate by November 30 of each year and shall publish that rate in a newspaper of general circulation within one week after it is established each year. The interest rate established by the RAC shall be the rate in effect from January 1 through December 31 of the subsequent year. (b) Using the actual interest earned on each security deposit account each year. If the landlord chooses this method of determining the amount of interest due at the time of payment of the security deposit interest, the landlord shall provide the tenant with bank statements indicating the amount of interest earned on the security deposit for that year. In the event the landlord fails to provide that information to the tenant at the time it transmits payment of the interest to the tenant, the interest rate required to be paid, shall be the rate set by RAC.
Return deadline	Accrued interest is paid with the deposit, at the same time and in the same way the deposit is returned Applies: RSO units only; when the tenancy ends, only for tenants whose deposit was held 1 year or more § 151.06.02 · code text Such payment shall be made at the same time and in the same manner as required for return of security deposits in California Civil Code Section 1950.5(f).

The California rule underneath

Where Los Angeles's rule above does not cover a situation, state law still applies. For the statewide rule on its own, see California security deposit law.

CA state law The statewide rule underneath
Security deposit cap	One month's rent, on top of the first month's rent Applies: Applies to security demanded or collected on or after July 1, 2024. A small landlord may take up to two months (see security_deposit_cap_small_landlord). Civ. Code § 1950.5(c)(1), (c)(6)
Security deposit cap — small landlord	Up to two months' rent, on top of the first month's rent Applies: Only if the landlord is a natural person (or an LLC whose members are all natural persons) who owns no more than two residential rental properties with no more than four units in total. Not available if the tenant is a service member. Civ. Code § 1950.5(c)(5)
Deposit return deadline	21 calendar days after the tenant moves out, with an itemized statement of any deductions Civ. Code § 1950.5(h)(1)
No deductions for ordinary wear and tear	A landlord may not deduct for ordinary wear and tear or for conditions that existed before the tenancy Civ. Code § 1950.5(e)(2)(A)
Bad-faith retention penalty	Statutory damages of up to twice the deposit, plus actual damages Applies: Only where the landlord keeps or claims the deposit in bad faith. Civ. Code § 1950.5(m)

Who this affects

TenantsLandlordsProperty managers

Frequently asked questions

How much can a Los Angeles landlord charge for a security deposit?

Los Angeles's code: monthly or yearly (Landlord subject to Civil Code 1950.5; RSO deposits held at least 1 year; excludes mobilehome parks; landlord pays directly or credits rent and gives written notice of choice) (§ 151.06.02); At the same time and in the same manner as the security-deposit return (Landlord subject to Civil Code 1950.5; RSO deposit held at least 1 year; unpaid accrued interest at tenancy termination; excludes mobilehome parks) (§ 151.06.02). State law: One month's rent, on top of the first month's rent (Civ. Code § 1950.5(c)(1), (c)(6)).

General information, not legal advice.

Security deposits in Los Angeles

What Los Angeles's code says

The California rule underneath

Who this affects

Frequently asked questions

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