Security deposits for new rentals can’t exceed one month’s rent under a new California law effective July 1. Rental security deposits in California will be cut substantially under a new law that limits them to one-month’s rent.
For mom-and-pop landlords below that two-property, four-unit threshold, deposits will be limited to two months’ rent unless the new tenant is a military service member. In that case, the one-month limit holds. “Despite skyrocketing rents, laws on ensuring affordable security deposits haven’t changed substantially since the 1970’s,” Haney said. “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.”
While the cost of consumer goods and services quadrupled since the old security deposit limit took effect in 1977, rent has increased eight-fold in that time, the analyst’s report said. As a result, the security deposit “would likely significantly exceed” the amount landlords need to make repairs, the report said.