How much can landlords charge for security deposits? New California law will create limits
Under a new California law, renters can no longer be asked for a security deposit that’s more than one month’s rent.
According to the California Courts, a security deposit is money a landlord holds to cover potential damages, cleaning costs or unpaid rent if the renter breaks the lease agreement.
The typical amount ranges from one to two months’ rent but can sometimes be as high as three months’ rent.
That will change July 1, when Assembly Bill 12 takes effect.
Here’s how the new law works:
How does new California law limit security deposit costs?
The new law prevents most landlords from charging renters two to three times the amount of monthly rent as a security deposit.
Instead, property owners can only charge tenants a security deposit that’s equivalent to one month’s rent.
California joins 11 other U.S. states — including Delaware, Alabama and Massachusetts — with laws that limit security deposits to a month’s worth of rent.
Are there any exceptions to new state lease law?
This new law will apply to California lease agreements signed on or after July 1.
Already existing lease agreements will not be affected by this new law.
Some exceptions apply to smaller landlords who own no more than two properties and a total of four units, the bill says.
Those landlords will be be able to request up to two months’ rent under the new law.
This story was originally published June 24, 2024 at 1:16 PM with the headline "How much can landlords charge for security deposits? New California law will create limits."
