As of July 1, 2024, the maximum security deposit a landlord can charge in California is generally limited to one month's rent for a dwelling unit, regardless of whether the unit is furnished or unfurnished. However, a specific exception applies to certain small landlords.
Understanding California's Security Deposit Limits with AB 12
California's security deposit laws underwent a significant change with the passage of Assembly Bill (AB) 12, which amends Civil Code Section 1950.5. This new law, effective July 1, 2024, standardizes the maximum amount landlords can collect as a security deposit, aiming to make housing more accessible and affordable for tenants across the state.
Previously, landlords could charge up to two months' rent for an unfurnished unit and up to three months' rent for a furnished unit. AB 12 simplifies and reduces these maximums.
Key Provisions of AB 12 (Effective July 1, 2024)
- General Limit: For most landlords and properties, the maximum security deposit for a residential dwelling unit is capped at one month's rent.
- No Distinction for Furnished/Unfurnished: This one-month limit applies universally, eliminating the previous distinction between furnished and unfurnished units.
- Applies to New and Existing Leases: While primarily impacting new leases, the law also applies to security deposits held under existing leases if a new lease or rental agreement is entered into on or after July 1, 2024, or if the original lease is renewed or extended.
Exception for "Small Landlords"
AB 12 includes a crucial exception for certain small landlords, allowing them to charge a higher security deposit under specific conditions:
- Criteria: Landlords who own no more than two rental properties and a total of no more than four dwelling units (including their primary residence if it's rented) may still charge up to two months' rent as a security deposit.
- Application: This exception is designed to provide flexibility for smaller-scale property owners.
Summary of California Security Deposit Limits (Effective July 1, 2024)
| Scenario | Maximum Security Deposit |
|---|---|
| General Rule (Most Landlords) | One Month's Rent |
| Small Landlord Exception | Two Months' Rent |
| (Owns ≤ 2 rental properties & ≤ 4 units) |
It's important to note that the security deposit is distinct from the first month's rent; tenants typically pay both upon moving in.
Important Considerations for Tenants and Landlords
Understanding the rules surrounding security deposits is crucial for both parties to ensure compliance and avoid disputes.
- Security Deposit vs. Rent: A security deposit is separate from advance rent payment. It's held by the landlord as a form of financial security against potential damages or unpaid rent.
- Refundable Nature: Security deposits are refundable. Landlords can only deduct costs for unpaid rent, cleaning beyond ordinary wear and tear, and repair of damages caused by the tenant beyond normal use.
- Itemized Statement: Upon vacating, California law requires landlords to return the unused portion of the security deposit, along with an itemized statement of any deductions, within 21 calendar days after the tenant moves out.
- Documentation is Key: Both tenants and landlords should thoroughly document the condition of the rental unit before move-in (e.g., with photos or a detailed checklist) to prevent disagreements over damages when the tenant moves out.
For detailed information on AB 12 and California's security deposit laws, refer to official legislative resources. Staying informed ensures both landlords and tenants adhere to the latest regulations.
