Berkeley Security Deposit Rules: What the Rent Stabilization Ordinance deposit rule Adds to California Law

A landlord in Berkeley has to satisfy two sets of rules at once: the California statute, Cal. Civ. Code § 1950.5, and the city's own Rent Stabilization Ordinance deposit rule (BMC § 13.76.070). The state law sets the 21-day return deadline after the day the tenant moves out; the local ordinance adds a rule on interest on the deposit. Where the two overlap, the landlord has to meet the stricter one.

What the Rent Stabilization Ordinance deposit rule adds

• Interest on the deposit: Deposits are held in a fiduciary capacity for the tenant and accrue simple interest that must be returned annually in December by rent rebate or cash payment. (BMC 13.76.070)
• Interest on the deposit: The rate is the 12-month average of six-month CD rates of banks doing business in the City, announced by the Rent Board by November 15. (BMC 13.76.070)
• Interest on the deposit: Rent Board page states the annual interest payment is due no later than January 31 and an unpaid amount carries a 10% penalty. (Rent Board security deposit interest page)

Who it covers: Units fully or partially covered by Berkeley's Rent Stabilization Ordinance (per Rent Board page).
Worth knowing: According to the Rent Board, the annual interest payment is due by January 31 and an unpaid amount carries a 10% penalty.

What California law already requires

• Return deadline: 21 days after the day the tenant moves out.
• Itemized deductions: required in writing. Itemized statement with copies of receipts or invoices for any repair or cleaning charge over $125; since 2025 landlords must photograph the unit at move-in and move-out to support deductions.
• Forwarding address: not a statutory condition of getting the deposit back.
• Penalty for wrongful withholding: For bad-faith retention the tenant may recover statutory damages of up to twice the deposit, on top of actual damages.
• Deposit cap: One month's rent (two months for qualifying small landlords) under AB 12, effective July 1, 2024.
• Small claims limit: $12,500.
• Statute: Cal. Civ. Code § 1950.5.

Using both rules together

1. Read the lease for the deposit amount, the move-in date, and any clause that mentions the ordinance.
2. Check the local rule first: interest on the deposit under BMC § 13.76.070.
3. Count the California deadline of 21 days from the day the tenant moves out.
4. A written demand that cites both Cal. Civ. Code § 1950.5 and BMC § 13.76.070 carries more weight than one that cites either alone. For bad-faith retention the tenant may recover statutory damages of up to twice the deposit, on top of actual damages.

Frequently Asked Questions

Q: Does Berkeley require interest on security deposits?
A: Yes. Deposits are held in a fiduciary capacity for the tenant and accrue simple interest that must be returned annually in December by rent rebate or cash payment. The rate is the 12-month average of six-month CD rates of banks doing business in the City, announced by the Rent Board by November 15. Rent Board page states the annual interest payment is due no later than January 31 and an unpaid amount carries a 10% penalty. The Rent Board set 0.9% for the December 2025 annual payment and 0.6% for September 2026 move-outs.

Q: Is the Berkeley deposit return deadline different from California law?
A: No. The Rent Stabilization Ordinance deposit rule does not change the return deadline, so the California rule applies: 21 days after the day the tenant moves out under Cal. Civ. Code § 1950.5.

Q: Does the Rent Stabilization Ordinance deposit rule apply to my unit?
A: Units fully or partially covered by Berkeley's Rent Stabilization Ordinance (per Rent Board page). Check the section cited below for the full list of exemptions before relying on it.

Q: Can I sue my landlord in small claims court for my California deposit?
A: Yes. California small claims court hears claims up to $12,500, which covers most deposits plus the statutory penalty. A dated written demand that cites Cal. Civ. Code § 1950.5 is the usual first exhibit.

Sources Checked

• Berkeley Mun. Code sec. 13.76.070, Rent Stabilization Ordinance deposit rule: code text, read 2026-09-20
• Cal. Civ. Code § 1950.5 (the California statute cited above)
• LeaseLenses California deposit data set, last reviewed 2026-09-19; the same data powers the California demand letter tool
• California landlord-tenant overview and the California deposit rules page

This page is general legal information for Berkeley, California, not legal advice. Local ordinances are amended more often than state statutes; read the current code text before relying on a figure in court.