What a landlord may keep from a commercial deposit.
Civil Code 1950.7 covers deposits on commercial and other nonresidential leases in California: what the landlord may keep, how fast the rest comes back, and what happens when the property is sold.
What the landlord may keep
Section 1950.7 covers deposits that secure a rental agreement for property other than residential property.[1]
The landlord may claim only the amounts reasonably necessary to cure a default in rent, repair damage the tenant caused, or clean the premises when the tenancy ends, where the deposit was made for those purposes.[1]
When the rest comes back
Each period runs from the date the landlord receives possession of the premises back.[1]
| What the landlord claims | Deadline for the rest |
|---|---|
| Only unpaid rent, and the deposit is no more than one month's rent plus a clearly described last month's rent deposit | No later than 30 days |
| Only unpaid rent, and the deposit is larger than that | The amount over one month's rent within two weeks; the rest returned or accounted for within 30 days |
| Repairs or cleaning as well | No later than 30 days |
- Two weeks: the amount over one month's rent, when only unpaid rent is claimed and the deposit is larger
- Thursday, October 29, 2026
- 30 days: the rest, or the whole remainder in the other cases
- Saturday, November 14, 2026
Calendar days. The calculator doesn't move a date that lands on a weekend or holiday, so returning the deposit by the date shown is on time.
When the property is sold
When the landlord's interest ends, by a sale or otherwise, the landlord within a reasonable time either transfers the deposit, less lawful deductions, to the successor and notifies the tenant by personal delivery or certified mail, or returns the deposit, less lawful deductions, to the tenant.[1]
Keeping a deposit in bad faith can cost up to $200 in damages, plus actual damages.[1]
No one-month limit on commercial deposits
The one-month limit on deposits is in Civil Code 1950.5, which covers residential property used as the tenant's dwelling. Its current text was amended by AB 414, in force since January 1, 2026.[2]
Section 1950.7 sets no limit on the amount of a commercial deposit.[1]
SB 1103, the 2024 law on qualified commercial tenants, doesn't change deposits: it amends Civil Code 827, 1632 and 1946.1 and adds 1950.9.[3]
Property left behind
Property a tenant leaves behind when a commercial tenancy ends is covered by Civil Code 1993 and the sections after it.[4]
Checked October 2026 against official sources
Each statement above links to the official page it comes from. We read every one on October 25, 2026.
- 1Civil Code 1950.7
Security deposits for nonresidential property, and when the rest comes back.
leginfo.legislature.ca.gov, checked October 25, 2026
- 2Civil Code 1950.5
Security deposits for residential property, including the one-month limit.
leginfo.legislature.ca.gov, checked October 25, 2026
- 3SB 1103 (2024), chaptered text
The bill that added Civil Code 1950.9 and amended 827, 1632 and 1946.1, in force since January 1, 2025.
leginfo.legislature.ca.gov, checked October 25, 2026
- 4Civil Code 1993
Property left behind when a commercial tenancy ends (the start of chapter 5.5).
leginfo.legislature.ca.gov, checked October 25, 2026
Change log
- October 23, 2026First version, checked against the official text.
- October 25, 2026Checked again against the official text. Added that the transfer rule covers any end of the landlord's interest, within a reasonable time.
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