Governow Gavin Newsom just signed a new law that will limit the amount a landlord can collect for a security deposit to one month’s rent, except for certain small landlords. Previously, a landlord could charge up to two times the monthly rent for a security deposit, and up three times the monthly rent for a furnished apartment.
Under the new law, a landlord can only collect a security deposit of up to one month’s rent regardless of whether the unit is furnished.
However, small landlords may still demand a security deposit of up to two months’ rent. A small landlord is defined as follows:
(a) The landlord is a natural person or a limited liability company in which all members are
natural persons.
(b) The landlord owns no more than two residential rental properties that collectively include
no more than four dwelling units offered for rent.
The new law only applies to security deposits collected on or after July 1, 2024. Security deposits collected prior to July 1, 2024 are governed by the prior law limiting the amount of a security deposit to twice the monthly rent, or three times the monthly rent for furnished units.
This law amends Civil Code 1950.5, which governs security deposits in California.
