San Francisco Security Deposits, Fees and Interest: key questions

3. The photo requirement that changed this year

AB 2801 took effect January 1, 2026, and it's specific about when photos are required, not just that documentation is a good idea generally. Three distinct points need timestamped photographs, tied to the individual tenancy: the unit after cleaning and repairs but before the tenant takes possession, the unit immediately after the tenant vacates and before any cleaning or repair work begins, and the unit again after that cleaning and repair work is complete.

Skipping this doesn't automatically void a deduction, but it changes the landlord's position substantially if a dispute reaches a court. Without contemporaneous photo documentation, a court can draw an adverse inference against the landlord, and if the deduction is later found to have been made in bad faith, meaning the landlord knew it was improper or acted with reckless disregard, the tenant can recover up to twice the deposit amount on top of actual damages, costs, and attorney fees.

4. The 21-day clock, and what actually starts it

Once a tenant vacates, a landlord has 21 days to either return the full deposit or send a refund along with an itemized statement explaining any deductions. This clock runs from the date the tenant actually vacates and returns possession of the unit, not from when a forwarding address is received. A landlord waiting on a forwarding address before starting the 21-day countdown is working from the wrong trigger entirely.

Documentation requirements scale with the size of a deduction. Any single deduction exceeding $125 needs supporting paperwork, an invoice, a receipt, or a record of hours worked and the rate charged, attached to the itemized statement. Separately, after a tenant gives notice, the landlord has to tell them in writing that they have the right to request an initial, pre-move-out inspection, giving the tenant a chance to fix flagged issues themselves before the final accounting happens.

5. San Francisco's own interest requirement

Separate from every rule above, San Francisco requires landlords to pay tenants annual interest on their security deposit, under Chapter 49 of the city's Administrative Code. The Rent Board recalculates this rate every year effective March 1, based on the annual average of the 90-Day AA Financial Commercial Paper Interest Rate. The rate for deposits held between March 1, 2026 and February 28, 2027 is 4.2%.

Interest is paid annually on the tenant's own "anniversary" date, the same day and month the deposit was originally received, and this requirement applies to tenancies that began after September 1, 1983. Payment can be made directly or as a rent credit, and landlords may deduct 50% of the annual Rent Board fee from the interest they owe. Because this rate changes every March, a figure a landlord remembers from a prior year is likely already out of date.

6. A worked scenario

A San Francisco tenant vacates a unit on the 10th of the month. The landlord has photos from move-in, and takes photos again immediately after the tenant leaves, before starting any cleaning. After repairs and cleaning wrap up, a third round of photos documents the finished unit. The landlord deducts $400 for carpet cleaning beyond normal wear, attaches the invoice since it exceeds $125, and mails the deposit balance with the itemized statement 18 days after the vacate date, inside the 21-day window. Separately, because the tenancy started 3 years ago, the landlord owes an annual interest payment calculated at whatever rate is applied on this tenancy's specific anniversary date each year, tracked independently of the move-out accounting entirely.