California Security Deposit Refunds in 2026: When Electronic Return Is Required Under AB 414
California AB 414 changed how many residential security deposits must be returned in 2026. Learn when electronic return is required, what written choices matter, how multiple tenants are handled, and what still has to happen within 21 days.
The short answer
Beginning in 2026, California Civil Code § 1950.5 generally requires the remaining security deposit to be returned electronically when the landlord received either the security deposit or rental payments from the tenant electronically. The tenant designates the bank or financial institution in writing, or the parties may agree in writing to another electronic or virtual method. The landlord and tenant may also designate a different return method by written agreement.
AB 414 did not erase California's existing 21-day security-deposit accounting rules. The refund method, itemized statement, supporting invoices or receipts, photographs for repair or cleaning deductions, and any good-faith estimate process must be analyzed together. Treat the payment rail as one part of the move-out workflow, not as a substitute for the accounting.
When does the electronic-return rule apply?
The trigger is broader than simply asking how the original deposit was paid. Under the amended statute, electronic return applies when the landlord received the security deposit OR rental payments from that tenant electronically. That can include an electronic bank transfer or another electronic payment arrangement used during the tenancy.
If neither the deposit nor rent was received electronically, the ordinary default is personal delivery or a check made payable to the tenant and mailed by first-class mail, subject to the statute's other rules. If electronic receipt did occur, the parties may still designate another return method in a written agreement.
The landlord also has a written-notice duty
When the electronic-return trigger applies, § 1950.5 requires the landlord, within a reasonable time after notice that either party intends to terminate the tenancy or before the lease term ends, to notify the tenant in writing of the tenant's right to receive the security electronically. The statute contains exceptions, including when the parties already made a written agreement designating another return method and for certain tenancy terminations under Code of Civil Procedure § 1161.
Operationally, do not wait until the refund is already due to decide how the tenant wants the money returned. Pair the move-out notice with a written request for the destination account or an agreed alternate method and preserve that response with the tenancy file.
Electronic refund does not mean the itemized statement can automatically be emailed
The money-delivery rule and the itemized-statement delivery rule are separate. Under the amended statute, the itemized statement is ordinarily furnished by personal delivery or first-class mail. It may be emailed only when the landlord and tenant mutually agree to that delivery method at the start of the tenancy or at any time during or after the tenancy.
That distinction matters for property-management portals. A portal used to pay rent does not, by itself, prove that the tenant agreed to receive the statutory itemized statement by email. Preserve the actual written agreement and the address or email account the tenant supplied.
What happens when multiple adult tenants are on the lease?
California now has a specific default for multiple adult tenants. Unless the landlord and all adult tenants make the written mutual agreement allowed by § 1950.5, the remaining security is generally returned by a check payable to all adult tenants on the rental or lease agreement at the time the tenancy ends, and the itemized statement is furnished to one adult tenant chosen by the landlord by personal delivery or first-class mail.
A written agreement with all adult tenants can instead specify whether the refund goes to one tenant or is divided among multiple tenants, including allocation percentages. It can also state whether each adult tenant receives the itemized statement by email or first-class mail and identify the corresponding destination. Do not improvise a split after move-out without the written agreement the statute contemplates.
The 21-day deadline and deduction documentation still control
No later than 21 calendar days after the tenant has vacated, California law generally requires the landlord to furnish the itemized statement and return the remaining security. AB 414 changed delivery mechanics; it did not create extra time for the refund because an ACH, bank account, portal or other electronic method still needs to be arranged.
For repair or cleaning deductions, current § 1950.5 also requires the applicable cost documentation and photographs. Beginning April 1, 2025, landlords must photograph the unit after possession is returned but before deducted repair or cleaning work, and again after the work is completed. For tenancies beginning on or after July 1, 2025, move-in photographs are also required. The statute allows the photographs to be provided by mail, email, flash drive or an online link.
A practical move-out workflow for landlords and managers
1) Confirm whether the deposit or any rent was received electronically. 2) After notice of termination, send the required written electronic-refund-right notice when applicable. 3) Obtain the tenant's written bank designation or written agreement to another method. 4) If several adults are on the lease, confirm whether an all-adult written allocation agreement exists. 5) Complete the move-out inspection and photo sequence before deducted work begins. 6) Build the itemized accounting with invoices, receipts or a permitted good-faith estimate. 7) Deliver the refund and statement through the legally supported channels within the statutory timeline. 8) Preserve proof of delivery and the electronic transaction confirmation.
A clean record should let a later reviewer answer four questions without guessing: how rent or the deposit was originally paid, what refund method was authorized, where the refund and statement were sent, and whether the deduction evidence was assembled on time.
What tenants should check if the refund method looks wrong
Start with your own payment history. If you paid the deposit or rent electronically, keep the bank, portal, ACH, Zelle or other payment records showing that method. Then look for the landlord's written notice describing the right to electronic return and any written agreement that changed the refund method.
Also separate a delivery-method issue from a deduction dispute. A tenant may disagree with cleaning, damage or timing even if the refund itself was sent electronically. Preserve the move-out date, forwarding information, itemized statement, deduction photographs, receipts or estimates, and proof showing when and how the remaining deposit was returned.
Use Max Rental Tools to organize the refund packet
Max Rental Tools includes a Security Deposit Refund Statement, Security Deposit Itemization, Move-Out Condition Report, Property Photo Evidence Log, Forwarding Address Request and Resident Communication Record. These workflows can keep the accounting, evidence and delivery record together instead of scattering them across texts, photos and payment apps.
The documents are organizational tools, not legal authority. California Civil Code § 1950.5, the chaptered AB 414 text, current California Department of Real Estate guidance, any applicable local rules and the actual tenancy facts remain the controlling starting points.
Common questions
Does a California landlord have to return a security deposit electronically in 2026?
Generally yes when the landlord received either the security deposit or rental payments from that tenant electronically, unless the parties designate another return method by written agreement. The statute contains additional rules and exceptions, so the actual payment history and written agreements should be checked.
What if the deposit was paid by check but rent was paid online?
The amended statute is triggered when the landlord received the security OR rental payments electronically. Electronic rent payments can therefore matter even if the original security deposit was not paid electronically.
Can the landlord email the security-deposit itemization just because rent was paid online?
Not automatically. Section 1950.5 separately allows email delivery of the itemized statement when the landlord and tenant mutually agree to that method. An online rent-payment history alone is not the same thing as that mutual agreement.
Does AB 414 change California's 21-day security-deposit deadline?
No. The amended statute still generally requires the itemized statement and return of the remaining security no later than 21 calendar days after the tenant vacates, subject to the statute's detailed timing and documentation provisions.
How is a security-deposit refund handled when several adults are on the lease?
The statute provides a default check payable to all adult tenants and statement delivery to one adult tenant unless the landlord and all adult tenants enter into a qualifying written agreement specifying another allocation and delivery arrangement.
Are photographs still required when a landlord makes cleaning or repair deductions?
Yes when the current photo-documentation provisions apply. California requires move-out photographs before deducted repairs or cleaning and photographs after the work; for tenancies beginning on or after July 1, 2025, move-in photographs are also required. Section 1950.5 governs the details.
Official sources
California Legislature — AB 414 (Chapter 340, 2025): Residential Tenancies, Return of SecurityCalifornia Legislature — Civil Code § 1950.5California Department of Real Estate — 2025 Year-End Bill Summaries (AB 414)California Department of Real Estate — Moving Out and Security DepositsCalifornia Courts — Guide to Security DepositsContinue your check
Use the state directory for current jurisdiction-specific rules, calculate the proposed increase, then prepare the appropriate rental document only after the legal-rule checks are complete.