Starting July 1, 2025, California’s new security deposit law—AB 2801—will reshape how properties handle move-outs. For multifamily operators, this means stricter rules, the same tight timelines, and a whole lot more documentation.
If you’re a COO, VP, or regional manager overseeing properties in California, now’s the time to prepare. Done right, compliance won’t just protect your team—it can also improve resident reviews and streamline operations.
Here’s what AB 2801 requires, what it means for your onsite teams, and how to stay ahead with the right systems in place.
AB 2801 is a major update to California Civil Code Section 1950.5. It expands how security deposit deductions must be documented, disclosed, and refunded. It doesn’t raise the cap on deposits, but it does raise the bar on transparency.
What’s included:
The law applies to all new leases signed in California and will be enforced statewide starting July 1, 2025.
Why it matters now
For large portfolios, these changes could multiply your team’s workload. Without the right tools and processes, your staff may struggle to meet deadlines, gather receipts and photos, and keep residents informed.
But here’s the upside: done right, this can actually improve resident satisfaction and reduce disputes. That means fewer angry calls. Fewer refu nd adjustments. And fewer legal headaches.
Let’s break it down.
Residents must be offered an inspection before they move out. This gives them a chance to fix issues and avoid charges.
Your action: Send written inspection offers early. Add a checkbox during the move-out process in your system or CRM.
The law now requires photos in three stages:
Your action: Use mobile inspection tools that make photo capture and storage part of your move-in/move-out checklist. Photos must be tied to the lease or unit.
Within 21 days of move-out, send an itemized list of:
If the total cost is under $125, detailed receipts are optional. But if it’s higher, you’ll need proof. If the maintenance team repaired or restored the charge item, then create an in-house receipt of hours spent times the hourly rate.
Your action: Standardize templates now, including your internal receipt process. Create a checklist of what must be included to stay compliant.
This includes:
Your action: Work with vendors to get receipts faster. Set flat fix amounts where possible and internal deadlines for requesting documentation.
If work can’t be completed in 21 days, you may use a 14-day extension. But there’s a catch: you must send with the first refund/statement:
You’ll then have 14 calendar days to follow up with final documentation and any adjustments.
Your action: Build these exceptions into your workflow. Automate reminders and packet delivery if possible.
The new law also tightens what’s allowed.
If your process isn’t updated by July 1:
And if you manage 20+ properties, inconsistent practices across sites could quickly become a liability.
Compliance doesn’t have to be painful. In fact, it’s a great opportunity to clean up processes that already cause friction. Here’s what top operators are doing now to prepare:
Use consistent forms, photo checklists, and templates across all properties. Train staff on what qualifies as “restoration” vs. “normal wear.”
Roost tip: Use a third party inspection and mobile app. Check out what’s available through your property management system (Yardi, Realpage, Entrata) or third party tools like Happy Inspector and SuiteSpot.
Photos, receipts, and notes should be easy to find by unit or resident. Use consistent naming conventions and folders accessible to your accounting and legal teams.
Roost tip: Store files in a single system or integrated platform—some tools automatically attach the photos to the resident ledger. Avoid the mix of email, Dropbox, and phone photos.
Use a refund automation platform. Platforms like Roost handle:
This removes the guesswork and cuts manual work by 80% or more.
Make sure your move-out notices, lease agreements, and deposit clauses reflect:
Roost tip: Run a quick legal review across all templates to reduce future challenges.
This is a cross-functional change. Everyone needs to know what’s coming:
Make sure everyone knows their role in getting refunds done right.
Roost’s refund automation platform was designed to make compliance with AB 2801 fast, accurate, and easy:
If you’re still managing refunds manually—or relying on spreadsheets and shared folders—it’s time to level up.
AB 2801 is one of the biggest changes to California rental law for security deposits in years. While it adds complexity, it’s also a chance to improve how you manage move-outs, reduce disputes, and build trust with residents.
Multifamily operators who act early—updating workflows, training staff, and embracing automation—will be miles ahead come July.
If you’re looking for tools to make this easier, we’re here to help.
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