Security Deposit Alternative in California
California caps most security deposits at one month's rent. On a $2,400 apartment that means you can hold $2,400 against damage that often costs more than that, and you have 21 days after move-out to return it. The cap changed how much you can hold. It did not change what a resident can do to the unit.
What California law says about security deposits
Read from the California statute on 2026-09-03. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every California resident?
California has no law that specifically covers charging a resident a monthly fee instead of a deposit. Civil Code 1950.5 covers deposits and move-in charges in general, and it was tightened rather than loosened when the cap dropped to one month. A monthly non-refundable fee is a different thing from a deposit, and nothing is being held, but that argument rests on general principles rather than on a law written for the arrangement. Offering it as a choice is the comfortable position. Requiring it is where a landlord should get a written opinion first.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in California
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a California property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
California security deposit alternative FAQs
The cap in Civil Code 1950.5 governs the security deposit itself, meaning refundable money a landlord holds. A recurring non-refundable fee is structured differently and nothing is held. California has no statute written for the arrangement either way, so the disclosure and the lease language are where your legal review is worth spending, and requiring the fee deserves its own opinion.
Security deposit rules in other states
See it on your California units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.