Los Angeles security deposit rules
Los Angeles adds its own rules to California’s security-deposit law. Below is each one, quoted from the official text, grouped by what it covers.
Caps and fees
For RSO units, the annual allowable rent increase (once every 12 months) may also be added to the security deposit.
“Rent may be increased once every 12 months by the allowable rent increase percentage. This increase may be added to the rent and security deposit. Effective February 2, 2026, the landlord can no longer include any additional percentage increase for utilities.”
L.A. Rent Stabilization Ordinance (LAHD, What is covered under the RSO)
Interest
Landlords of units covered by LA's Rent Stabilization Ordinance (generally units with a certificate of occupancy issued before October 1, 1978) must pay interest on all security deposits held for at least one year; this does not apply to mobile home parks.
“with a certificate of occupancy first issued before October 1, 1978, must pay interest on all security deposits held for at least one (1) year for their tenants. The RSO does not require payment of interest on security deposits for mobile home parks.”
L.A. Mun. Code § 151.06.02 (LAHD Rent Stabilization Bulletin #44)
The landlord may pay either the simple interest rate set by the Rent Adjustment Commission or the actual interest earned (with a copy of the bank statement); if the deposit is not in an interest-bearing account, the Commission's rate applies.
“interest payable to tenants may be determined in two ways: 1) use the simple interest rate established by the Rent Adjustment Commission; or 2) pay the tenant the actual amount earned on the security deposit. If the second method is used, the landlord must provide the tenant with a copy of a bank statement indicating the interest earned on their deposit for the year.”
L.A. Mun. Code § 151.06.02 (LAHD Rent Stabilization Bulletin #44)
The Rent Adjustment Commission's security deposit interest rate for RSO units for 2026 is 3.03% (bulletin dated 01/13/2026).
“Interest Payment on Security Deposit The interest rate set by the Rent Adjustment Commission for 2026 is 3.03%. What is a Security Deposit? A security deposit is essentially any money paid by a tenant to a landlord”
LAHD Rent Stabilization Bulletin #44 (01/13/2026)
During the tenancy, accrued interest is paid as a direct payment or rent credit (landlord chooses, notifies tenant in writing, monthly or yearly); at move-out, unpaid interest is due at the same time and manner as the deposit return under Civil Code § 1950.5(f).
“landlord may choose to pay the accrued interest on a monthly or yearly basis. 2. Upon Termination of the Tenancy: Payment of any unpaid accumulated interest on the tenant's security deposit must be made at the same time and in the manner required for return of security deposits in California Civil Code Section 1950.5(f).”
L.A. Mun. Code § 151.06.02 (LAHD Rent Stabilization Bulletin #44)
A tenant not paid RSO deposit interest may sue (including in Small Claims Court); LAHD's Rent Stabilization Division does not investigate non-payment complaints.
“The tenant may bring an action in a court of appropriate jurisdiction including, but not limited to, Small Claims Court, to recover the amount owed as provided in the Rent Stabilization Ordinance 151.06.02 (G).”
L.A. Mun. Code § 151.06.02(G)
The Rent Adjustment Commission's rate for 2025 was 4.32% — the rate changes every year, so interest for each year of a tenancy uses that year's rate.
“01-01-2025 to 12-31-2025 4.32%”
LAHD Rent Stabilization Bulletin #44 (01/13/2026)
If the landlord's interest in the property ends (for example, a sale), accumulated deposit interest must be handled the same way California Civil Code § 1950.5(g) and (h) require for the deposit itself.
“Upon Termination of a Landlord's Interest in a Property. All accumulated interest on security deposits must be disposed of in the same manner as required for security deposits by California Civil Code Sections 1950.5(g) and 1950.5(h).”
LAHD Rent Stabilization Bulletin #44 (01/13/2026)
The California rule underneath
| Rule | California law |
|---|---|
| Deadline to return or itemize | 21 days |
| Maximum deposit | 1 month's rent (furnished or unfurnished), for deposits collected on/after July 1, 2024. Small-landlord exception: 2 months' rent if the landlord is a natural person (or LLC of natural persons) owning ≤2 residential rental properties with ≤4 total units — except 1 month for service-member tenants. |
| If the landlord breaks the rules | If the landlord keeps the deposit in bad faith, a court may award up to twice the deposit as a penalty, on top of actual damages (Cal. Civ. Code § 1950.5(m)). |
| Statute | Cal. Civ. Code § 1950.5 (as amended by AB 12, eff. July 1, 2024) |
The full state rule, with the statute quoted: California security deposit law. Where the city rule is stricter, the stricter rule applies to a unit in Los Angeles.
What to do
- Keep your lease, the deposit receipt and any move-in checklist — several of these rules depend on them.
- Photograph the unit when you move in and when you move out.
- Give your landlord a forwarding address in writing when you leave.
- If the deadline passes, send a written demand citing the rule above before going to small claims court.
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Every legal statement above is taken from these official texts, read on 2026-10-01.
This page is general information, not legal advice, and using it does not create an attorney-client relationship. Main AI is not a law firm. Laws change and have exceptions; the linked official text controls. For advice about your situation, contact a licensed attorney or a legal-aid office in your state.