A Change In Security Deposits: Assembly Bill No.12

Current security deposit laws allow a landlord to receive security deposit for a rental agreement on a residential property in any amount as long as it does not exceed the value of 2 months’ rent (in the case of unfurnished rental). The law allows for up to 3 months’ rent for furnished rentals (in addition to any rent for the first month paid on or before move-in).

Assembly Bill No. 12 will act to amend, repeal, and add Section 1950.5 of the Civil Code to existing law beginning July 1, 2024. The new law will forbid landlords from receiving security deposits for their residential rentals in any amount that is more than a single month’s rent, furnished or unfurnished (in addition to any rent for the first month paid on or before the tenant’s move-in date).

The bill will be effective as long as the tenant is not a service member and if the landlord:

(1) is a natural person or a limited liability corporation in which all members are natural persons and

(2) owns no more than 2 residential rental properties that collectively include no more than 4 rental units.