Many California renters want to know if a landlord can use the security deposit for unpaid rent when the tenancy ends. Owners want to know the same thing because rent loss hurts cash flow. California law allows using a security deposit to cover unpaid rent, but it only allows it in specific, documented situations, and it requires the landlord to follow the 21-day return rule, provide an itemized statement, and stay within the list of lawful deductions under Civil Code 1950.5.
When a landlord withholds money in a way that looks retaliatory or abusive, tenants sometimes consult a slumlord lawyer to see if the deduction is even legal.
This guide explains when a landlord can keep a deposit for unpaid rent, when they cannot, how local rent control rules may add extra limits, and what to do if a deduction looks inflated or unfair. By the end, both sides will know what California actually says, what a lease should spell out, and how to dispute improper deductions in a simple, organized way.
Quick Answer: When Can a Security Deposit Cover Unpaid Rent?
California landlords can apply the security deposit to unpaid rent that was due when the tenancy ended or when the tenant legally moved out, but not to rent that came due mid-tenancy unless the lease clearly said part of the payment was advance last month’s rent. California law also treats any advance “last month’s rent” payment as security under Civil Code 1950.5, so the lease must say that upfront.
The rent has to be due under the lease, and the tenant must have vacated or the tenancy must have legally ended. A landlord cannot take the deposit in the middle of the tenancy instead of collecting regular monthly rent unless the written lease clearly says part of the deposit counts as last month’s rent.
If the tenant skipped the final payment, moved out without paying the full month’s rent, or owed a prorated amount, the landlord may deduct that balance and must return the rest, or send an itemized statement, within 21 days.
What California Law Allows and Limits for Unpaid Rent
California Civil Code 1950.5 is the main rule for security deposits. It lets a landlord apply the deposit to unpaid rent at the end of the tenancy, to repair damage that goes beyond normal wear and tear, and to pay for the cleaning needed to return the unit to its move-in level, as well as to repair or replace items that are damaged or missing beyond normal wear.
Charges outside those categories are not allowed, and this overview of lawful deposit deductions in California shows how to tell a proper deduction from an improper one.
When Landlords Can Legally Deduct Unpaid Rent Under Civil Code 1950.5
Landlords can deduct unpaid rent when the tenant moves out while still owing. The tenant may have given 30 days’ notice, but did not pay for the last 15 days. They may have broken the lease and left mid-month. They may owe a late payment under the rental agreement. In each of these, the owner can retain the portion of the deposit equal to the unpaid rent.
The owner then has to explain the deduction and provide documentation, such as a rent ledger or a copy of the lease showing the monthly amount. If the tenant left other damage, the landlord can deduct it as well if it exceeds normal wear and tear.
Situations Where Deduction for Unpaid Rent Is Not Allowed
Some deductions are not allowed. A landlord cannot keep a deposit for rent that was never due. A landlord cannot keep it for future rent after the tenant has already moved out, unless a court later awards that amount. A landlord cannot take it to cover work the law treats as routine maintenance, such as seasonal upkeep or owner upgrades.
A landlord also cannot use the deposit to cover rent the tenant legally withheld because the unit was unsafe or uninhabitable, and the tenant followed California repair-and-deduct or rent-withholding rules. Those charges fall outside the list of allowed deductions.
Other California Laws Related to Deposit Disputes
As of July 1, 2024, most residential security deposits in California are capped at one month’s rent. A narrow exception lets small landlords that own no more than two properties totaling four or fewer units, and that are owned by natural persons (or an LLC of natural persons), collect up to two months’ rent, but this exception does not apply when the tenant is a service member.
This smaller deposit makes every deduction more important because there is less money available to cover unpaid rent, cleaning, and damage. That tighter cap makes every deduction more critical because there is less money to cover unpaid rent, cleaning, and repairs.
For example, Los Angeles requires interest on security deposits for units covered by the Rent Stabilization Ordinance, with the rate published by the housing department. San Francisco also requires annual interest on deposits under Administrative Code Chapter 49.
Comparison Table: What Landlords Can vs. Cannot Deduct from Security Deposits (California Law)
Use this to check whether a deduction complies with what California actually allows under Civil Code 1950.5. The left column shows costs tied to tenant conduct or unpaid obligations. The right column shows costs the owner should not take from the deposit.
| Category | Permitted Deductions | Prohibited Deductions |
| Rent and charges | Unpaid rent at the end of tenancy | Future lost rent after legal move-out (unless a court orders it) |
| Damage and repairs | Cost to repair damage beyond normal wear and tear | Normal wear and tear (faded paint, carpet worn from use) |
| Cleaning | Cleaning costs to return the unit to move-in condition (if left dirty) | Routine maintenance (plumbing upkeep, cleaning gutters) |
| Inventory | Missing items from furnished rentals (if included in the lease inventory) | Upgrades or property improvements (new fixtures, flooring replacement) |
| Utilities | Unpaid utilities billed to the landlord (if the lease says tenant pays) | Prepaid last month’s rent (unless the lease clearly says it is part of the deposit) |
| Abandonment | Abandonment-related costs, such as trash removal | Damage caused by conditions the landlord failed to fix (for example, leaks or moisture problems) |
Legal Limits on Using Deposits for Rent in California
The deposit is not a flexible pool of money. It has to follow state law, the lease, and sometimes local rules. A landlord who uses it for regular monthly rent without permission creates a dispute. A tenant who applies the deposit to the last month without permission also creates a dispute. The safest approach is to follow the lease first, then apply Civil Code 1950.5.
Unpaid Rent vs. Last Month’s Rent
Unpaid rent is money the tenant failed to pay under the agreement. Last month’s rent is a separate amount that the parties sometimes agree to prepay. If the deposit is only a security deposit, the tenant cannot require the owner to apply it to the final month’s rent. The landlord can still deduct the real unpaid rent at move-out. That keeps the two concepts clean and prevents confusion about what the deposit secures.
What Your Lease Must Say to Allow It
A written lease can say that part of the deposit will serve as last month’s rent. If it says that clearly, the landlord can apply it that way. If it does not say that, the landlord should treat the entire amount as a security deposit and follow the 21-day rule. Clear leases reduce disputes.
Local Rent Control Rules That Add Restrictions
Cities with rent control often add small but important rules. Some require interest on deposits. Some limit how much can be deducted for cleaning. Some set procedures for move-out inspections. In those cities, the local rules sit atop the Civil Code 1950.5, so the landlord must follow both. Tenants should always look up their exact city rules.
What If the Owed Rent Is More Than the Deposit?
If the tenant owes more rent than the deposit can cover, the landlord can still deduct the whole deposit for rent, then bill the tenant or file a small claims case for the rest. The tenant can defend that case by showing proof of payment, repair requests, or habitability problems that justified withholding. The deposit does not erase a larger rent debt. It only reduces it.
Landlord Requirements After Withholding Deposit for Unpaid Rent
Once a landlord decides to keep part or all of the deposit for unpaid rent, California requires clear paperwork. This is where many owners make mistakes that let tenants recover the full amount. The state wants the tenant to see every deduction, every receipt, and every explanation. If the landlord does not do that on time, the tenant can claim the deposit in full and, in some cases, extra damages, which local guidance, such as the Los Angeles County security deposit rules, also underscores.
21-Day Notice Rule and Itemized Deductions
California landlords have 21 calendar days from move-out to do one of two things. They must either return the entire deposit or send an itemized statement that lists every deduction and the amount. If they used the money to pay unpaid rent, they must say which month the rent was unpaid and how much was taken. If they miss the deadline, they risk paying the full deposit back in court, and tenants can point to California’s 21-day security deposit deadline guide to show that the timeline is not flexible.
Required Documentation for Unpaid Rent Claims
A clean file helps the landlord prove the deduction. Strong files include a copy of the rental agreement, a rent ledger, a move-out date, and any communication showing that the tenant agreed to move before the end of a paid period.
If the owner deducted cleaning or repair costs along with rent, they must include copies of invoices or receipts with the 21-day itemized statement; if the actual bills are not available yet, a good-faith estimate is allowed, but the final documents must be sent within 14 days after the work is completed.
Penalties for Violating California Deposit Laws
Landlords who ignore the 21-day deadline or make unlawful deductions can owe the tenant the full deposit, and a court may also award up to two times the deposit amount as statutory damages if it finds the retention was in bad faith. Courts look at whether the owner acted in bad faith. Landlords should keep good records so they can show they acted in good faith.
What to Do If Your Deposit Was Used Improperly
Tenants do not have to accept a deduction that does not match the law. If the landlord kept the deposit for future rent, for upgrades, or for maintenance, the tenant can challenge it. The best approach is to gather the lease, payment records, inspection photos, and the itemized statement and compare them to Civil Code 1950.5 and any local rules. That comparison will show if the landlord stayed within the permitted list.
Can You Challenge a Deduction for Unpaid Rent?
Yes. Tenants can dispute a deduction if they have already paid that month, if the landlord miscalculated a prorated amount, or if the landlord tried to charge rent after move-out. A written dispute works best.
Tenant Rights Under State and Local Law
California state law gives every residential tenant the right to an itemized statement and a prompt return of the balance. Local laws can add interest or extra penalties. Tenants can use both levels of law in a dispute letter.
How Tenants Can Dispute Deductions
It helps to break this down into simple steps. A calm, organized dispute often works better than an angry call. Tenants who follow a written process can show a judge they acted reasonably if the case goes to small claims court. Think of these steps like a checklist. Each one builds proof. At the end, the tenant has a clear claim for the return of the deposit.
Step 1: Request the Itemized Statement in Writing
If the landlord does not send the statement within 21 days, the tenant should request it in writing right away. Keep a copy. Note the date.
Step 2: Compare With Your Lease and Payment Records
Next, compare the charges with the lease and rent receipts. Check whether the amount matches the monthly rent. Check whether the lease allows using any part of the deposit as last month’s rent.
Step 3: Send a Written Demand Letter Citing the Law
Write a short letter that cites California Civil Code 1950.5, points out each improper charge, and asks for repayment within a clear time. For language, structure, and examples of what belongs in that letter, you can follow the state’s own California Tenants – A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities. Attach copies of receipts, your move-out photos, and the landlord’s itemized statement.
Step 4: File a Small Claims Court Case if Needed
If the landlord does not respond, the tenant can file a small claims case. Small claims in California often handle deposit disputes, and the process is outlined in the California Courts’ self-help guide on security deposits. Bring the demand letter, the lease, photos from the move-out, and any receipts for cleaning or repairs.
Step 5: Get Help From a Tenant Rights Attorney
Some disputes involve rent withholding, serious repair problems, or retaliation. In those situations, a tenant-focused firm can review your lease, payment records, and the landlord’s itemized deductions to separate lawful charges from unlawful ones and tell you which next step makes sense.
At Castelblanco Law Group, we believe tenants deserve better, and we’re here to make sure they get it.
FAQs About Using a Security Deposit for Unpaid Rent in California
Can My Landlord Automatically Keep My Deposit for Unpaid Rent?
No. The landlord must show the rent was due, unpaid, and that the tenancy ended, then send itemized deductions.
What if My Deposit Does Not Cover the Full Rent I Owe?
The landlord can apply the entire deposit and still seek the remaining balance from you through a bill or a small claims court action.
Can I Use My Deposit to Cover Last Month’s Rent?
Only if the lease says the deposit includes last month’s rent. Otherwise, you must pay rent for that month.
What if My Landlord Kept the Deposit and Also Sued Me for Rent?
The landlord must credit the deposit deduction. You can show the court the itemized statement and proof of payment.
What if I Withheld Rent Because Repairs Weren’t Done?
If you followed legal repair-and-deduct or habitability steps, the landlord should not use the deposit to penalize you. Dispute it in writing.
Do I Have to Go to Court to Get My Deposit Back?
Not always. Many landlords return deposits after a clear demand letter with receipts and photos. The court is the next step.
How Long Does It Take to Recover a Deposit in California?
Landlords must return it or send deductions within 21 days. Disputes can take longer if letters or court are needed.
Eric Castelblanco, Attorney/Founder
Eric Castelblanco, founder and managing attorney of Castelblanco Law Group, APLC, has championed tenants' rights for over two decades, securing over $200 million in verdicts and settlements. His law firm also specializes in every aspect of personal injury accident cases, delivering exceptional ou...