New California law will limit how much landlords charge for security deposits. Here’s when

California Gov. Gavin Newsom recently signed 56 housing bills into law to strengthen tenant protections and one of them limits how much landlords can charge for security deposits.

Assembly Bill 12, introduced in December by Assemblyman Matt Haney, D-San Francisco, caps security deposits at one month’s rent. Smaller landlords who own no more than two properties and a total of four units will be able to request up to two months’ rent under the new law.

“Massive security deposits can create insurmountable barriers to housing affordability and accessibility for millions of Californians,” Haney wrote in a statement on X, formerly known as Twitter.

“This new law is a simple common sense change that will have an enormous impact on housing affordability for families in California, while also balancing a landlord’s need to protect themselves against potential liability.”

California joins 11 U.S. states — including Delaware, Alabama and Massachusetts — to limit security deposits to one month’s rent, said Haney, who amended his bill for small-scale landlords to get it over the finish line.

A security deposit is money a landlord holds in case the renter damages the property, leaves it dirty or breaks the lease without paying rent, according to California Courts. The amounts are typically between one and two months rent, but it’s sometimes as high as three.

As of October, the average rental price for a two-bedroom apartment in Sacramento is priced at $1,836 on rental online platform Zumper. Meaning, a new tenant must pay more than $5,500 if their landlord requests the first month’s rent along with a security deposit made up of two months’ rent.

A new renter could be asked to dish out more than $7,000 if their new home comes furnished.

AB 12 passed the Senate on Sept. 12 with a 21-9 margin. The Assembly passed the bill one day later with a 50-18 vote.

When does the law go into effect?

Newsom signed AB 12 into law on Wednesday. Beginning July 2024, your security deposit cannot exceed one month’s rent, regardless if the unit is furnished or not. Small-scale landlords who own no more than two properties and a total of four units can request up to two months’ rent under the new law.

What is the current law on security deposit limits?

California’s current law limits security deposits to two months’ rent for unfurnished units and three months’ rent for units that are furnished.

According to Senate Bill 644, introduced by Senator Steve Glazer, D-Orinda, active-duty military personnel should only pay a security deposit equal to one month’s rent for unfurnished units and two month’s rent for furnished units.

The law won’t change for service members.

How long can a California landlord hold your security deposit after you move? Here’s the law

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