California has enacted a groundbreaking law that limits security deposits for renters to just one month’s rent. This new legislation, Assembly Bill 12, aims to alleviate the financial burden on tenants and will take effect on July 1, 2024. The law is part of a broader effort to provide more protections for renters in the state.
Key Takeaways
- Effective Date: July 1, 2024
- Security Deposit Cap: One month’s rent
- Exemptions: Small landlords with up to two properties and four units
- Additional Prohibitions: No upfront last month’s rent, pet deposits, or other upfront payments
- Military Service Members: Cannot be charged more than one month’s rent under any circumstances
How the New Law Works
Under the new law, most landlords in California will be prohibited from charging security deposits that exceed one month’s rent. This is a significant change from the previous allowance, which permitted landlords to charge up to two months’ rent for unfurnished units and three months’ rent for furnished units. The law also bans landlords from asking for the last month’s rent upfront, pet deposits, and any other upfront payments as part of the security deposit.
Exemptions to the Rule
The law does provide some exemptions. Small landlords who own no more than two properties and a total of four units are allowed to charge up to two months’ rent as a security deposit. This exemption aims to balance the financial risks for smaller property owners while still providing relief to tenants.
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Impact on Renters and Landlords
The new law is expected to provide significant financial relief to renters, particularly in high-rent areas like San Diego, where security deposits can often reach several thousand dollars. However, some property owners and landlord associations have expressed concerns that the cap could lead to more rental housing being pulled from the market, as landlords seek to mitigate financial risks.
Additional Renter Protections
Assembly Bill 12 is part of a broader legislative effort to protect renters in California. Other new laws include Assembly Bill 1418, which prevents landlords from evicting tenants based on calls to law enforcement or suspected criminal activity, and Assembly Bill 567, which makes it harder for landlords to evict tenants if the landlord or their family members want to move in. These laws aim to provide a more stable and fair rental market for all Californians.
What Renters and Landlords Should Know
- Existing Leases: The new law will only apply to lease agreements signed on or after July 1, 2024. Existing leases will not be affected.
- Legal Advice: Both renters and landlords are advised to consult legal experts to understand how the new law will impact their specific situations.
- Competitive Rental Rates: Landlords may consider adjusting monthly rents to account for the reduced security deposit, but must balance this with the need to remain competitive in the rental market.
California joins 11 other states, including Delaware, Alabama, and Massachusetts, in capping security deposits at one month’s rent. This move is seen as a significant step towards making housing more affordable and accessible for renters across the state.
Sources
- When does new CA law for security deposit limit take effect? | Sacramento Bee, Sacramento Bee.
- New California Law Limits Security Deposits – Rocket Lawyer, Rocket Lawyer.
- New California Laws that Affect Landlords in 2023, Erik Egelko.
- California Security Deposit Laws | Deductions, Returns & Rights, DoorLoop.
- California’s new 2024 renter protection laws | cbs8.com, cbs8.com.