West Hollywood, California: security deposit interest

The rate for calendar year 2025 is 4.3%, and it was payable or creditable to the tenant on or before January 31, 2026. The figure for calendar year 2026 has not been announced: the ordinance sets a September 1 deadline for the announcement, and neither August 2026 Commission meeting carried it. Landlords pay or credit each year's interest by January 31 of the following year, and a tenant who moves out is paid the accrued interest on departure. The rate comes from averaging the savings yields of five online federally insured banks, a method the Commission re-examined and voted on August 13, 2026 to keep.

West Hollywood deposit interest at a glance

The rate

Interest on deposits held through December 31, 1993 was fixed by the ordinance itself at five and one half percent a year, payable on or before February 28, 1994 (§ 17.32.020(3)). From calendar year 1994 forward, § 17.32.020(4) sets the rate annually by the Rent Stabilization Commission "in accordance with the formulas set forth in the Rent Stabilization Regulations," and requires the Commission to announce each year's rate on or before September 1 of that same year. The formula lives in Regulation 42000(a), amended by City Council Resolution 21-5440 on September 20, 2021: staff take the savings-account annual percentage yields of five online, federally insured banks — the highest yields listed on a rate-comparison service, counting only accounts with a minimum deposit of $500 or less — and average them, rounded to the nearest one-tenth of one percent. Before that 2021 change the formula averaged five local branch banks' passbook rates, rounded to the nearest quarter of a percent, which produced a zero rate in every year from 2012 through 2021. The Commission reopened the method in April 2025, took public input in August 2025, and on August 13, 2026 voted 4 to 2 to keep the five-online-bank formula and take no further action, so the method behind the figures is unchanged.

Accrual and payment

Interest accrues on the security deposit over the calendar year at that year's announced rate. On or before January 31 of the following year the landlord must either pay the tenant the interest for the year ending December 31 or allow a rent credit in that amount, and must keep doing so each year until the deposit is returned or the landlord becomes entitled to use it. A tenant who moves out is paid the interest accrued to that point on departure, rather than waiting for the January cycle.

Who and what is covered

The duty sits in Title 17, the city's Rent Stabilization Ordinance, so it reaches rent-stabilized units rather than every rental in the city. Property exempt from Title 17 under § 17.24.010 — institutional facilities, government-owned or government-assisted housing (with a carve-back that keeps pre-July 1, 1979 Section 8 units that are not government-owned inside the ordinance), rooms, and the other listed categories — is outside the interest duty as well.

Penalty for violation

The ordinance itself sets no penalty aimed at unpaid deposit interest: Title 17's remedies article contains no interest or deduction provision, and § 17.32.020 states the duty without a damages clause. The city's published guidance to tenants supplies the practical remedy instead — a tenant who has not received the interest owed may deduct the amount from rent as of February 1 each year, and the guidance directs tenants to speak with an information coordinator in the Rent Stabilization and Housing Division first. That deduction is the city's stated administrative practice, not a rule written into the Municipal Code.

How this interacts with state law

California's security-deposit statute, Civil Code § 1950.5, says nothing about interest and nothing in state law stops a California city from requiring it. West Hollywood is one of the cities that does, and it attached the duty to its rent stabilization scheme rather than to the whole rental market, so the state statute is the entire answer for units outside Title 17.

Published rate tables

West Hollywood security deposit interest rates

One figure per calendar year, applied to the deposit held during that year and paid or credited to the tenant by January 31 of the following year. The 1994 through 2010 figures were set each year under the formula then in force but are not published anywhere online: the city's own rate archive begins with its December 2011 newsletter.

A current series — the Rent Stabilization Commission, on or before September 1 of the year the rate governs. Source: official source · verified August 28, 2026.

Work out a figure: the deposit interest calculator computes West Hollywood interest from this table using the locality's own published method.

Notes and caveats

• The 2026 rate has not been announced — West Hollywood's ordinance says the Commission "shall" announce each year's rate on or before September 1 of that year. No 2026 figure had been announced as of August 28, 2026, the two August 2026 Commission meetings carried no announcement item, and the next meeting on the calendar is September 10, 2026. Until a figure is announced there is no 2026 rate to apply, and no earlier year's figure carries forward. The 2025 rate of 4.3% remains the one that governs the payment due by January 31, 2026.
• How the rate is calculated, and the 2026 decision to keep the method — Regulation 42000(a) averages the savings annual percentage yields of five online, federally insured banks — the highest yields listed on a rate-comparison service, counting only accounts requiring $500 or less — and rounds to the nearest tenth of a percent. Landlords argued that the highest online yields are not what they actually earn at their own banks, and the Commission spent 2025 and 2026 considering alternatives, including letting a landlord document a lower earned rate subject to a 75% floor, and mixing local branch banks into the sample. On August 13, 2026 the Commission voted 4 to 2 to retain the five-online-bank method and take no further action.
• Deducting unpaid interest from rent — The city's guidance tells tenants who have not received their deposit interest that they may deduct the amount owed from rent as of February 1 each year, and asks them to contact an information coordinator in the Rent Stabilization and Housing Division first. That remedy is the city's published practice under its Rent Stabilization Regulations, not a provision of the Municipal Code — the code's remedies article contains no interest or deduction language at all.
• Rates before 2011 are not published — The ordinance fixed a single figure for everything held through December 31, 1993 — five and one half percent, payable by February 28, 1994 — and the Commission has set an annual rate ever since. The year-by-year figures for 1994 through 2010 are not published in any source the city puts online; its own rate archive begins with the December 2011 newsletter, which reported 0.25% for 2011. For those middle years the method is known but the numbers are not, and a landlord's or tenant's own records are the only place they exist.
• Ten years at zero — From 2012 through 2021 the announced rate was zero percent every year. That was the arithmetic of the old formula, which averaged five local branch banks' passbook yields and rounded to the nearest quarter of a percent — branch yields in those years rounded to nothing. The jump to 1.7% for 2022 and 5.0% for 2023 and 2024 reflects the switch to online-bank yields adopted in September 2021, not a change in the underlying duty.
• No rule about where the deposit is held — West Hollywood requires the interest but says nothing about the account. Section 17.32.020 sets the rate and the payment deadline and stops there, and no other part of Title 17 requires a separate, insured, or interest-bearing account for a security deposit. State law adds nothing either, so a West Hollywood landlord may hold the money however they like and owes the announced rate regardless of what it actually earns.
• The deposit itself cannot be raised — Alongside the interest duty, § 17.32.020 freezes the deposit: once set, it cannot be increased for the duration of the tenancy, and the tenancy continues for this purpose as long as any one of the original tenants still occupies the unit. For tenancies beginning on or after March 24, 2022 a landlord may not collect an additional pet deposit at all, and the annual general rent adjustment does not apply to a security deposit.

Cite this page: "Landlord Atlas, West Hollywood, California: security deposit interest (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/california/west-hollywood/" — free to cite and quote with a link (how these records are verified).

Citations

• West Hollywood Muni. Code § 17.32.020 (Security Deposits; the annual interest duty) · 4 (verified 2026) Official source
• West Hollywood Muni. Code § 17.32.020 (interest on deposits held through December 31, 1993) · 3 (verified 2026) Official source
• West Hollywood Muni. Code § 17.24.010 (property exempt from the Rent Stabilization Ordinance) (verified 2026) Official source
• West Hollywood Rent Stabilization Commission meeting records (annual rate announcements; August 13, 2026 decision on the rate formula) (verified 2026) Official source

How this record was verified: Complete read of West Hollywood Municipal Code § 17.32.020 (Security Deposits), subsections (1) through (5) with its ordinance history line, in Title 17 (Rent Stabilization) on the city's official code site, together with Title 17's articles 1, 3, 4 and 6 read for any other interest provision and every occurrence of the word 'interest' in them placed in context; the Rent Stabilization Commission's own meeting record read for each year's rate announcement and for the method review — the August 28, 2025 staff report announcing the 2025 rate, the August 14, 2025 method-review report, the August 13, 2026 staff report on rate-calculation options with the approved minutes recording its disposition, the August 27, 2026 agenda and look-ahead calendar, and the 2022, 2023 and 2024 announcement agendas; the city's December 2011 landlord newsletter read for the 2011 figure and the city's rate archive examined for earlier years; and the city's tenant guidance page on security deposits read for the deduction practice it describes.

This page records local law on deposit interest. The statewide position — California's security-deposit statute says nothing about interest — no part of Civil Code § 1950.5 requires a landlord to pay or credit a tenant any interest on a residential deposit. — lives on the California deposit-interest page with its own citations and verification date.