From claim changes to inspection procedures, here’s how to comply with California AB-2801 – the new laws regarding security deposit processes in the Golden State.
What is AB-2801?
California Assembly Bill No. 2801 focuses on regulations surrounding security deposits related to tenancy. It was approved by the governor on September 19, 2024, with different portions of the law going into effect throughout 2025.
Specifically, AB-2801 impacts allowed deductions and the exact process for informing residents of any charges upon move out. Failing to comply with new requirements in bad faith may prohibit the ability for teams to make claims against a tenant’s security deposit.
Below is an overview of general security deposit requirements in California, and some of the changes coming into effect in 2025.
Permissible Security Deposit Deductions
As of July 1, 2024, security deposits are limited to one month of rent, with some exceptions for smaller landlords. Landlords may make claims against the security deposit for the following:
- The compensation of a landlord for a tenant’s default in the payment of rent.
- The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.
- The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy (with amendments applicable to tenants with right of occupancy beginning after January 1, 2003).
- To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.
Deductions must be reasonable and supported with documentation (receipts, proof of work, etc.).
One big example of a deduction change are general expenses like standard carpet cleanings. While landlords can still charge for carpet cleaning services, there must be cause under the law. Specifically, cleaning must be warranted because of damages beyond normal wear and tear, or because it’s objectively necessary in order to restore the carpet to the condition it was in at the tenant’s move-in. Making a security deposit deduction for a carpet cleaning that may not be “warranted” isn’t permissible.
Required Move-Out Processes
One of the biggest components of AB-2801 are the new photo requirements. There’s a few of them, separated by point in the process and effective date:
- As of April 1, 2025, landlords are required to take photos after the resident moves out, but before any repairs are made or cleanings are performed
- These photos must be provided to the resident alongside an itemized statement and explanation of charges against the security deposit. All of this must be sent to the resident no later than 21 days following the vacate date, but not earlier than either of the following:
- The date notice is provided to terminate the tenancy; or
- 60 calendar days prior to the expiration of a fixed-term lease
- These photos must be provided to the resident alongside an itemized statement and explanation of charges against the security deposit. All of this must be sent to the resident no later than 21 days following the vacate date, but not earlier than either of the following:
- Landlords must also take photos of the unit “within a reasonable time” after repairs/cleanings are completed
- For tenancies that begin on or after July 1, 2025, the landlord “shall take [photos] of the unit immediately before, or at the inception of, the tenancy“
Best Practices For AB-2801 and InCheck
While AB-2801 may seem daunting, compliance doesn’t have to be. Using a tool that automates onsite documentation and itemized reports helps your team get to where they need to be – and in much less time. Here’s how teams complying with AB-2801 are using InCheck to improve the way they work:
Standardize Your Move-Out Process
- Add key steps into your move-out Workflow to ensure you’re meeting every new requirement in the law, including resident notifications and the right inspection and reporting timeframes.
- Plus, if you integrate InCheck with your Property Management System, you can automatically trigger these move-out steps based on the official move-out date/notice date recorded in your PMS.
Capture Onsite Details
- Your team can easily take and attach photos to any individualized inspection question/item using the InCheck Mobile App. You can even go one step further and require photos for specific items, or all items.
- All photos are date and time-stamped, so you’ll have a record that aligns with the timeframes of the law.
- Depending on how your team is structured, your team can note deductions onsite or during the review process. You can even automatically assign a financial review to your staff depending on what’s found onsite.
- You can also capture information like the resident’s signature. This is a great best practice for inspections occurring at the start of the tenancy, and for any move-out inspections where the resident chooses to accompany your team.
Review and Reporting
- Anyone on your team, including centralized or management-level staff members, can review the results of the inspection and make adjustments to deductions.
- PDF reports (including photos captured onsite) are automatically created and stored in your InCheck account, so anyone on your team can easily download them and send them to the resident.
- Every step in the process is tracked so you know exactly what was done, and when – and you have an easily accessible record of it. That can include a record of who sent the resident their remaining deposit, and a receipt, copy, or other documentation showing how it was sent.
Questions about the law or how to get started using our best practices? We’re happy to help – reach out to support@sitecompli.com.
About the Author
