Imagine, if you will. Your tenant who punched holes in the wall and bedroom door is challenging the charge against his security deposit. He had the nerve to say that since you did not explain why you made the repair in the wall and replaced the door, you could not charge for it. He also went as far as to say that you also needed to provide pictures showing the condition of the property when he moved in showing no damage, pictures of the damage after he moved out, and pictures of the completed repairs before you could deduct the charges from his security deposit.
You don’t have pictures but you’re not worried. You have been doing this for years and have won in court before. Should you, as a landlord be concerned? It depends. Are you familiar with AB 2801? I’ll explain.
Assembly Bill 2801 is a law regarding Tenant Security Deposits that was passed in 2024 and started to go into effect on January 1, 2025, with more rules fazing on April 1 and July 1, 2025. All the old requirements are still in effect like the 21-day limit and the need to provide receipts. You still cannot charge for normal wear and tear. We have a popular blog covering the return of the tenant security deposit and one covering what is the maximum security deposit. You may want to check them out for more background on tenant security deposits.
Now we have AB 2801 which expressly states that deductions shall only be for the amount reasonably necessary to restore the unit to its original condition beyond normal wear and tear. AB 2801 significantly increases documentation requirements needed to make deductions from security deposits and charge tenants for damage made to a rental property.
Some of the major requirements of the law and the dates they go into effect are as follows:
- Starting January 1, 2025, landlords must give a written explanation of the cost incurred. You can’t just send a receipt; you must explain why the repair was needed. For example, if the door had to be replaced because it could not be fixed or patched then you must include that in the explanation.
- Starting April 1, 2025 landlords must take photos of the unit after the tenant leaves but before any repairs are made or cleaning takes place to document the condition of the property when the tenant left. Then you must take photos after repairs have been made and cleaning has been done. You must provide these photos with itemized accounting including detailed receipts and explanations if deductions are made.
- Starting July 1, 2025 landlords must take photos of the property right before the tenant takes possession to document the condition of the property at the time of occupancy.
So essentially, a rental property owner will need to have pictures documenting the condition of the property before a tenant moves in, pictures documenting the condition of the property after the tenant moves out showing how it was left and pictures documenting that the repairs were made, and cleaning was done. If the property owner is going to deduct for those repairs or cleaning, then these pictures must be provided along with explanations for any cost incurred.
Carpet Cleaning
AB 2801 also has a provision regarding carpet cleaning that has been getting a lot of attention. The provision reads as follows:
”The landlord shall not require a tenant to pay for or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.”
Not sure why they held out carpet cleaning. Now landlords, who do this will need to document what they are doing and why. You will need plenty of pictures and a good explanation.
What Effect Will AB 2801 Have On Landlords?
AB 2801 will affect some landlords more than others. For companies like ours who have embraced technology, it won’t be too bad. There may be a few more explanations and pictures to keep track of, but we already have been doing most of what is required in AB 2801. We will need to be more thorough in providing a more detailed report to tenants with the accounting. This will take a little more time but is manageable.
However, if you are self-managing a few units and or are just not digitally set up to be ready for this, it will be a lot to deal with. Just think of all the pictures to catalog and keep track of everything. What if you are still using a paper-based system that up until now has worked fine for you? These new picture requirements will require a computerized cloud-based system. If you are not already on one get ready for the brain damage required to make the conversion.
It will also be challenging for owners who have been counting on handymen and other vendors who are not tech-savvy enough to help with pictures. There could be a lot of extra trips involved to get pictures. This extra level of care will take many rental property owners and their managers some get used to.
One advantage landlords may gain from these AB 2801 requirements is that this extra level of evidence will be useful when legitimate repairs are called for. It may also be what it takes for some landlords to catch up with the times and upgrade their systems.
It is conceivable that many people who self-manage may elect to take on professional management companies while many antiquated management companies may decide to get out of the business.
What Effect Will AB 2801 Have On Tenants?
Some tenants will appreciate the reports with extra details including pictures. Some tenants will benefit from winning in small claims court going up against uniformed or unorganized landlords.
One of the downsides for tenants is that there is an extra expense involved in collecting and presenting the additional explanations and reports with so many photos. This extra expense will not be directly passed on to the tenants but certainly result in higher operating costs that will eventually be reflected in higher housing costs.
What Should California Landlords Do Regarding AB 2801?
California landlords need to lean into it and start complying with the law. f you can adjust and do what it takes to comply, you will end up having better systems and records that will ultimately help you protect yourself. For those landlords who understandably don’t want to deal with it, this may be a good time to enlist the services of a quality property management company.
Bottom Line
AB 2801 is a new law that significantly increases documentation requirements to make deductions from security deposits and charge tenants for damage made to a rental property.
Starting January 1, 2025, written explanations must be given for all costs charged to the tenant. Starting April 1, pictures are required documenting the condition of the property after the tenant moved out before repairs take place, and pictures are required documenting the repairs were made. Starting July 1, 2025, a rental property owner will need to have pictures documenting the condition of the property before a tenant takes possession. These pictures must be provided along with explanations for any cost incurred if the property owner is going to deduct for any repairs. This is true for carpet cleaning and general professional cleaning as well.
AB 2801 requirement will create extra work for landlords. It will be especially hard for landlords who are not technologically advanced. Tenants may benefit from stricture documentation requirements placed on landlords, but these greater demands drive up the cost of providing housing which eventually affects tenants.
These new rules will cause many landlords who self-manage to seek the services of professional property management companies. Those who continue to manage need to embrace technology.
We hope that you found this helpful and informative. If so, please like, share, and subscribe. Remember we are not attorneys, so we don’t give legal advice. Laws are always changing and vary depending on the specific municipality in which the property is located. For legal advice please consult a real estate attorney familiar with the laws in your area.
For Real Estate Advice
If you are looking for a reliable property management company to help you handle a rental property or a real estate broker to guide you through the sales process in Long Beach, Los Angeles, or Orange County, California; or you are just considering it and have a few questions about real estate contact the Mike Dunfee Group today! We are happy to help.
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