New Recording Requirements for Rental Security Deposits Under AB 2801

By: Han Kwak

California renters and landlords should be aware of recent major changes regarding how security deposits are documented and returned following the implementation of Assembly Bill 2801 (AB 2801).  The bill is designed as a tenant protection law aimed at increasing transparency and preventing landlord abuse of security deposits and took full effect on July 1, 2025.

What is AB 2801?

The law requires landlords to photograph a unit’s condition before move-in, at move-out, and after any clearing or repairs are completed when deducting from the deposit.  The law has been incorporated into California Civil Code Section 1950.5, which governs security deposits in a rental agreement.

If the landlord makes any deduction from the deposit, the landlord must provide an itemized statement showing: (1) the specific issue being addressed; (2) the cost of repair or cleaning; and (3) the related before and after photographs. 

The landlord must inform tenants in writing of the tenant’s right to request an inspection before move-out and give the tenant an option to be present during the inspection.  This is designed to prevent landlords from authorizing repairs or cleaning that was not identified in an itemized statement following the inspection.

Penalties for Violation of AB 2801

If the landlord does not comply with AB 2801, the tenant has the option of challenging the deductions in small claims court.  Under certain circumstances, the tenant can seek twice the amount of the security deposit in addition to actual damages.  The tenant can also seek reasonable legal fees if they are successful.

California landlords should be aware of these requirements and take steps to ensure compliance with AB 2801 to limit their legal exposures.  Landlords should provide training to all property managers and leasing agents to make certain photographs are documented before tenant takes possession and after notice of the lease terminating. 

Conclusion

AB 2801 is designed to provide a more transparent use of the tenant’s security deposit.  Although compliance with AB 2801 requires landlords to implement new procedures and record keeping, implementation of these new procedures will protect the landlord’s right to use the security deposit for legitimate repair and cleaning not covered by Civil Code Section 1950.5. 

To protect your interests in a rental security deposit, reach out to an experienced attorney at Chugh, LLP.