How to Return a Security Deposit Electronically in California (AB 414, 2026 update)

If a tenant paid their rent or security deposit to you electronically, California now expects the refund to go back the same way. AB 414 sets that rule, effective January 1, 2026.

The rule

If you received the security deposit or rent electronically from the tenant, you must return the deposit electronically too, unless you and the tenant agreed in writing to a different method. A standing habit of “we always mail a check at move-out” is not enough to satisfy the exception. You need an actual written agreement on file.

Multiple tenants get one combined payment

If a unit has more than one adult tenant, the refund is a single payment made out to all of the adult tenants together, unless every one of them agrees in writing to split it differently. Do not default to splitting the deposit between roommates on your own judgment call. That decision belongs to the tenants, in writing.

Itemized statements can go by email

You may send the itemized deduction statement by email if the tenant has given written consent to that. Without consent, send it the way you would any other legal notice.

What this does not change

The underlying deposit rules are untouched. AB 414 is about the mechanism of the refund, not the amount, the 21-day return deadline, or the itemization requirement. Those still come from the rest of Civil Code § 1950.5.

Related provisions in the same bill

AB 414 also added a move-in and move-out photo documentation practice, effective July 1, 2025, and a heightened security deposit disclosure for active-duty servicemembers, effective April 1, 2025. Both of those pieces are already in effect. The electronic refund requirement above is the part that is new for January 2026.

What to check

If your standard move-out process cuts a paper check regardless of how the tenant paid rent, that process needs to change. Confirm your bank or payment platform can send an electronic refund to a former tenant’s account, and put a written payment-method agreement in your move-out packet for the cases where you and the tenant prefer something other than “electronic in, electronic out.”

For a unit with roommates, build the “how do you want the deposit split” conversation into your move-out notice so you have a written answer before the 21-day clock forces a decision.

General information, not legal advice

This page is general information, not legal advice. Rules change and your situation may differ. When in doubt, check with a California attorney.

1. Civil Code § 1950.5 (as amended by AB 414, Ch. 340, Stats. 2025) Electronic deposit refund required when the deposit or rent was received electronically, effective January 1, 2026

Frequently asked questions

Do I have to refund a security deposit electronically in California?

Yes, if the tenant paid you the deposit or rent electronically, starting January 1, 2026, unless you and the tenant agreed in writing to a different refund method.

How do I refund a deposit when there are multiple tenants on the lease?

As a single combined payment made out to all the adult tenants together, unless every one of them agrees in writing to a different split.

Can I email the itemized deduction statement instead of mailing it?

Yes, if the tenant has given written consent to receive it by email.

Did AB 414 change the 21-day deposit return deadline or the deposit cap?

No. AB 414 only changes the refund method. The 21-day deadline and the deposit amount rules still come from the rest of Civil Code § 1950.5.