A proposal is floating in the statehouse that would limit security deposits

A recently introduced bill will put a limit on what landlords can demand for a security deposit. As it stands now, the cap is two months' rent for unfurnished units and three months' rent for furnished ones.


This concept is not new. Recognizing the challenges of military service members to obtain housing in California and the possibility that active-duty service members and their families may be transplanted on short notice when duty calls, there is an existing law that lowers the security deposit for men and women in uniform, so long as they do not have an atrocious credit history and a history of damage to rental units.

Limits on security deposits for non-military tenants will remain the same: two months’ rent for unfurnished units, and three months’ rent for furnished ones.


Our takeaways

The proposed legislation will compel owners to rent to individuals with fewer assurances that the landlord will recoup their money when rental relationships go awry.

The pandemic has taught us that many tenants do not fulfill their obligations and on top of this, rental risks are often concealed, making the safeguard of security deposits all the more important.

We have parroted time and time again the importance of tenant screening and the value of references and old-fashioned sleuthing - technology cannot be used as a crutch.

If AB-12 is passed, it will be of no consequence to responsible tenants who take good care of their rental units and pay their rent on time. But this rosy picture is by no means guaranteed.