Los Angeles, California Security Deposit Rules (RSO)
For Rent Stabilization Ordinance units, landlords must pay simple interest on security deposits held at least one year, at the Rent Adjustment Commission annual rate (or actual bank interest if documented). Interest is paid monthly or yearly as cash or a rent credit, and unpaid interest is due at move-out with the deposit under Civil Code 1950.5(f).
State law vs Los Angeles ordinance
| Rule | California state law | Los Angeles ordinance |
|---|---|---|
| Deadline |
| Not found in the ordinance text reviewed |
| Cap | One month's rent standard cap (AB 12, effective 2024-07-01); two months' rent allowed for small natural-person landlords (max 2 properties / 4 units); one month for service-member tenants regardless of landlord size | Not found in the ordinance text reviewed |
| Interest | No statewide interest requirement in the verified data. | Simple interest on deposits held at least one year; landlord may use the RAC annual rate (average of savings-account rates at five or more FDIC banks with LA branches as of Sept. 1 of the prior year, adopted by Nov. 30) or actual interest earned if bank statements are provided; Paid monthly or yearly as a direct payment or rent credit, with written notice of the method. (LAMC § 151.06.02) |
| Penalty | Statutory damages of up to 2x the deposit, in addition to actual damages, when retention is in bad faith (Civ. Code §1950.5(l)). Bad faith required: Yes. | If the landlord fails to pay interest as required, the tenant may sue in a court of appropriate jurisdiction, including small claims, to recover the amount owed. No city multiplier. (LAMC § 151.06.02.G) |
| Itemization | Required; Itemized statement always required; receipts/invoices required unless total deductions are $125 or less (or tenant waived receipts) | Not found in the ordinance text reviewed |
| Applies to | Statewide | RSO-covered rental units in the City of Los Angeles (generally dwelling units, suites, condos, duplexes, and hotel/rooming rooms occupied more than 30 consecutive days, with a certificate of occupancy first issued before October 1, 1978). Does not require interest for mobile home parks. |
Free California template, built from verified state data
I rented [rental property address] from [lease start date] to [move-out date]. I paid a security deposit of $[amount]. I returned the keys on [date] and gave you my forwarding address in writing on [date]. Under California law (Cal. Civ. Code §1950.5), a landlord must return the deposit or send a written, itemized list of deductions within 21 calendar days after tenant vacates the premises.
Statute says
Interest shall begin accruing on November 1, 1990, on a monthly basis. A tenant shall be given the unpaid accrued interest in the form of either a direct payment or a credit against the tenant's rent. The landlord shall choose between these two methods of payment and notify the tenant in writing of his or her choice. The landlord may elect to pay the accrued interest on a monthly or yearly basis.
What this means
For Rent Stabilization Ordinance units, landlords must pay simple interest on security deposits held at least one year, at the Rent Adjustment Commission annual rate (or actual bank interest if documented). Interest is paid monthly or yearly as cash or a rent credit, and unpaid interest is due at move-out with the deposit under Civil Code 1950.5(f).
Source accessed: . Verified by: grok, codex, claude.
County small claims courts
| County | Court and city | Limit | Filing fee | E-filing | Court link |
|---|---|---|---|---|---|
| Los Angeles County | Superior Court of California, County of Los Angeles - Small Claims Division, Los Angeles (Stanley Mosk Courthouse) plus 11 other courthouse locations countywide | $12,500 (statewide) | Statewide filing fee: $30 (claims ≤$1,500), $50 (>$1,500-$5,000), $75 (>$5,000-$12,500) - statewide Govt Code fee schedule, confirmed on LA fee-schedule page | Yes | Official court website Court page check not recorded |
FAQ
What does Los Angeles add to state deposit law?
For Rent Stabilization Ordinance units, landlords must pay simple interest on security deposits held at least one year, at the Rent Adjustment Commission annual rate (or actual bank interest if documented). Interest is paid monthly or yearly as cash or a rent credit, and unpaid interest is due at move-out with the deposit under Civil Code 1950.5(f).
What is the ordinance return deadline?
Not found in the ordinance text reviewed
Who does the ordinance cover?
RSO-covered rental units in the City of Los Angeles (generally dwelling units, suites, condos, duplexes, and hotel/rooming rooms occupied more than 30 consecutive days, with a certificate of occupancy first issued before October 1, 1978). Does not require interest for mobile home parks.