For rent-stabilized units, Los Angeles requires annual interest on deposits held a year or longer, at the rate set by the Rent Adjustment Commission — on top of California's § 1950.5 rules.
Both California law and Los Angeles's ordinance apply to you.
California Civil Code § 1950.5 applies in full: a 21-day return deadline, up to 2× for bad-faith withholding plus actual damages, the one-month cap (AB 12), and the AB 2801 photo-evidence rules. Los Angeles adds the interest layer on top.
Los Angeles penalty
Interest layer
City ordinance — separate remedy
Los Angeles’s overlay is a deposit-interest requirement rather than a separate withholding multiplier: a landlord subject to § 1950.5 must pay annual interest on deposits held at least one year, with unpaid accrued interest due at the end of the tenancy. State § 1950.5 governs wrongful withholding of the deposit itself.
California penalty
up to 2× + actual damages
State law — still applies
A landlord who retains the deposit in bad faith is liable for statutory damages of up to twice the amount of the security deposit, in addition to the tenant’s actual damages, under § 1950.5(m).
These are two distinct remedies under two different laws — they are not the same claim, and one does not replace the other. The California return deadline of 21 days still applies.
Interest rate — published annually: The LA Rent Adjustment Commission publishes the deposit-interest rate each year; your letter references the current RAC rate rather than a hardcoded number.
Yes. California Civil Code § 1950.5 applies in full: a 21-day return deadline, up to 2× for bad-faith withholding plus actual damages, the one-month cap (AB 12), and the AB 2801 photo-evidence rules. Los Angeles adds the interest layer on top.
Pay annual interest on deposits held one year or longer (accruing monthly since Nov 1, 1990) Use the rate set annually by the Rent Adjustment Commission (RAC), or the actual interest earned Pay by direct payment or rent credit; pay any unpaid accrued interest at the end of the tenancy
Los Angeles’s overlay is a deposit-interest requirement rather than a separate withholding multiplier: a landlord subject to § 1950.5 must pay annual interest on deposits held at least one year, with unpaid accrued interest due at the end of the tenancy. State § 1950.5 governs wrongful withholding of the deposit itself. This is a separate remedy from the California state penalty, which also applies: A landlord who retains the deposit in bad faith is liable for statutory damages of up to twice the amount of the security deposit, in addition to the tenant’s actual damages, under § 1950.5(m).
Los Angeles Municipal Code § 151.06.02 (Rent Stabilization Ordinance). We verify these against the ordinance text itself; the date we last checked is shown on this page.
Sources & verification
The Los Angeles rules on this page were verified against the ordinance text itself:
Last verified against primary sources on .
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Los Angeles sits on top of California's statewide security deposit law. Read the full California rule →
Your letter cites the Los Angeles ordinance and the California statutes that apply to your situation.
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