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Do landlords have to pay interest on security deposits in Los Angeles, and when is it due?
Short answer
RSO: pay interest on security deposits held one year or more (2026 rate 3.03%)
Payment timing: Once a year (no date in the ordinance; the calendar uses the lease anniversary, computed)
Pay tenants interest on deposits held at least a year, using the Rent Adjustment Commission rate (3.03% for 2026) or the actual interest earned (with the bank statement). Choose direct payment or rent credit, tell the tenant in writing, and pay monthly or yearly.
"shall pay annually interest on all security deposits held for at least one year for their tenants as follows:" codelibrary.amlegal.com
"The landlord shall choose between these two methods of payment and notify the tenant in writing of the landlord’s choice. The landlord may elect to pay the accrued interest on a monthly or yearly basis." codelibrary.amlegal.com
"The interest rate set by the Rent Adjustment Commission for 2026 is 3.03%." housing.lacity.gov
RSO: pay interest on security deposits held one year or more (2026 rate 3.03%) Verified
Deadline: Once a year (no date in the ordinance; the calendar uses the lease anniversary, computed)
Pay tenants interest on deposits held at least a year, using the Rent Adjustment Commission rate (3.03% for 2026) or the actual interest earned (with the bank statement). Choose direct payment or rent credit, tell the tenant in writing, and pay monthly or yearly.
Who it covers: Rent Stabilization Ordinance (RSO) units: generally buildings first built on or before October 1, 1978 with two or more units on the parcel (apartments, duplexes, two+ houses on a lot, ADUs on such lots), plus some condos/townhomes and replacement units. Check ZIMAS (zimas.lacity.org, Housing tab). Calendar filter uses built before 1979 as an approximation of the October 1, 1978 cutoff, and 2+ units on the property. Condos: an individually owned condo or townhome is not caught by this filter even though some are RSO (for example, condos rented as apartments before conversion); if ZIMAS or LAHD says your condo is RSO, these rules apply to it too.
"shall pay annually interest on all security deposits held for at least one year for their tenants as follows:" codelibrary.amlegal.com
"The landlord shall choose between these two methods of payment and notify the tenant in writing of the landlord’s choice. The landlord may elect to pay the accrued interest on a monthly or yearly basis." codelibrary.amlegal.com
"The interest rate set by the Rent Adjustment Commission for 2026 is 3.03%." housing.lacity.gov
Notes: LAMC §151.06.02; LAHD bulletin. No fixed calendar day is set by the ordinance; the calendar shows each lease anniversary (computed) for the annual payment. Computed: the ordinance sets no calendar day. The calendar uses each lease anniversary for annual payment (deposits held one year or more). Monthly payment is also allowed; unpaid interest is due with the deposit at move-out.
Last verified 2026-10-20 · Confidence: high · Status: verified · Report a correction