Santa Monica's rent-control charter (§ 1803(s)) requires deposits for controlled units to sit in an interest-bearing account, and Board Reg. § 14002 adds a city deposit ceiling — on top of California's § 1950.5 rules.
Both California law and Santa Monica's ordinance apply to you.
California Civil Code § 1950.5 applies in full: a 21-day return deadline, up to 2× the deposit for bad-faith withholding plus actual damages, the statewide AB 12 cap, and the AB 2801 photo-evidence rules. For controlled units Santa Monica adds its own, separate deposit ceiling (Reg. § 14002) and escrow rule on top — it does not replace the state remedy.
Santa Monica penalty
Escrow + city ceiling
City ordinance — separate remedy
Santa Monica’s overlay is an escrow-and-ceiling layer rather than a separate withholding multiplier: deposits for controlled units must be held in an interest-bearing account at a federally insured institution (Charter § 1803(s) / Reg. § 14001(a)), and Board Reg. § 14002 caps the deposit itself. The state § 1950.5 penalties remain the route for wrongful withholding of the deposit.
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 payment is not currently required: The Board regulation that once set an interest-payment mechanic (Reg. § 14001(b)–(f)) has been suspended since 2002, and under Charter § 1803(s) paying the account’s interest to the tenant is at the landlord’s option. What remains mandatory is the interest-bearing-account placement itself. (Santa Monica’s former flat 3% rate was struck down in Action Apartment Assn. v. Santa Monica Rent Control Bd. (2001) — no published city rate currently exists.)
Correct section cite: The deposit-interest provision is Charter § 1803(s) in the current codified text — not § 1803(f), which some older secondary sources (and an earlier draft) cited in error.
Yes. California Civil Code § 1950.5 applies in full: a 21-day return deadline, up to 2× the deposit for bad-faith withholding plus actual damages, the statewide AB 12 cap, and the AB 2801 photo-evidence rules. For controlled units Santa Monica adds its own, separate deposit ceiling (Reg. § 14002) and escrow rule on top — it does not replace the state remedy.
Hold the deposit in an interest-bearing account at a federally insured financial institution (§ 1803(s) / Reg. § 14001(a)) Keep the deposit within the city ceiling of Reg. § 14002 (roughly one month’s maximum-allowable rent, with a small-landlord exception of up to two months) Do not raise an established deposit during the tenancy (Reg. § 14002(c)) — a Santa Monica protection with no state-law counterpart
Santa Monica’s overlay is an escrow-and-ceiling layer rather than a separate withholding multiplier: deposits for controlled units must be held in an interest-bearing account at a federally insured institution (Charter § 1803(s) / Reg. § 14001(a)), and Board Reg. § 14002 caps the deposit itself. The state § 1950.5 penalties remain the route for wrongful withholding of the deposit. 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).
Santa Monica Rent Control Charter Amendment § 1803(s). We verify these against the ordinance text itself; the date we last checked is shown on this page.
Sources & verification
The Santa Monica rules on this page were verified against the ordinance text itself:
Last verified against primary sources on .
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Santa Monica sits on top of California's statewide security deposit law. Read the full California rule →
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