Security deposits in San Francisco: the local rules

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

What San Francisco's code says

San Francisco code What San Francisco's code adds
When interest is paid	Once a year on the deposit's anniversary, as a payment or rent credit; the landlord chooses which. Applies: Only once the deposit has been held at least 1 year during the tenancy. § 49.2 · code text Beginning on September 1, 1984, or on any date thereafter upon which the security deposit has been held by the landlord for one year, and annually thereafter on the same month and day, a tenant shall be given the unpaid accrued interest in the form of ether a direct payment or a credit against the tenant's rent. no later than two weeks after the tenant has vacated the premises Applies: Termination of tenancy; security deposit held for one year or more; the landlord may retain unpaid interest, subject to Civil Code § 1950.5(e), where the deposit alone is insufficient to cover unpaid rent, damage beyond ordinary wear and tear, or cleaning § 49.2 · code text Upon termination of tenancy, a tenant whose security deposit has been held for one year or more shall be entitled to a direct pro-rata payment of any unpaid accrued interest no later than two weeks after the tenant has vacated the premises
Interest on deposits	Yes, simple interest is required. Applies: Deposits held at least 1 year; not when the rent is assisted or subsidized by a government agency. § 49.2 · code text A landlord who is subject to the provisions of Section 1950.5 of the California Civil Code shall pay simple interest on all security deposits held for at least one year for his/her tenants; provided, however, that this requirement shall not apply where the rent is assisted or subsidized by any government unit, agency or authority. The Rent Board sets the rate, effective March 1 each year. § 49.2 · code text The interest rate for interest payments required by this Chapter 49 shall be determined by the Residential Rent Stabilization and Arbitration Board (Rent Board), to be effective on March 1 of each year. Based on the yearly average of the 90-day AA financial commercial paper rate, rounded to the nearest tenth. Applies: Each year from March 1, 2015 onward. § 49.2 · code text For March 1, 2015 and each year thereafter, the Rent Board shall calculate the rate according to the annual average of the 90-Day AA Financial Commercial Paper Interest Rate (rounded to the nearest tenth) for the immediately preceding calendar year as published by the Federal Reserve.

The California rule underneath

Where San Francisco'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 San Francisco landlord charge for a security deposit?

City rule: deposits held at least 1 year earn simple interest at the Rent Board's rate, except when rent is government-subsidized.

General information, not legal advice.

Security deposits in San Francisco

Key points

What San Francisco's code says

The California rule underneath

Who this affects

Frequently asked questions

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