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
California Civil Code § 1950.5, as amended by AB 414 (Chapter 340, Statutes of 2025)
electronic refund required when the deposit or rent was received electronically, effective January 1, 2026
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.
Tell the tenant before they move out
If you received the security or rent electronically, you also owe the tenant written notice of the electronic refund, within a reasonable time after either of you gives notice to end the tenancy (§ 1950.5(h)(1)(A)(ii)). It can ride in the same letter as the pre-move-out inspection notice.
Related rules from earlier bills
Two other recent deposit rules are often credited to AB 414 but came from earlier law. The photo requirements came from AB 2801 (Chapter 280, Statutes of 2024): move-out photos from April 1, 2025, and move-in photos for tenancies beginning on or after July 1, 2025 (§ 1950.5(g)). The written statement required when a service member is charged a higher security took effect April 1, 2025 (§ 1950.5(c)(4)). Both are already in effect. The electronic refund rules above are 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.” LeaseRooster’s deposit tools handle the electronic payout and the itemized statement in one place, and the security deposit calculator helps you confirm the refund amount before you send it.
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. For the rest of the return process, including the 21-day deadline itself, see our guide to California’s security deposit return deadline.
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.
- 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 View official source ↗
- Civil Code § 1950.5(g) (AB 2801, Ch. 280, Stats. 2024) Move-out photos from April 1, 2025; move-in photos for tenancies beginning on or after July 1, 2025 View official source ↗