California Governor Gavin Newsom has signed into law a bill that will cap security deposits for all rental properties in the state to one month’s rent. The law, which goes into effect on July 1, 2024, is a major victory for renters, who have long struggled to come up with the large security deposits that many landlords demand.
Under the new law, landlords will no longer be able to charge more than one month’s rent as a security deposit, regardless of whether the rental unit is furnished or unfurnished. This is a significant change from the current law, which allows landlords to charge up to two months’ rent as a security deposit for unfurnished units and three months’ rent for furnished units.
The new law also includes an exemption for small landlords who own only two properties with a total of four or fewer units. These landlords will still be able to charge up to two months’ rent as a security deposit.
The new law is expected to have a major impact on housing affordability in California. According to a study by the California Housing Partnership, a $3,000 security deposit can be a barrier to housing for nearly 60% of renters in the state. The new law will make it easier for renters to afford to move into new homes, and it will also help to reduce the financial burden on renters who are already struggling to make ends meet.
Here is a summary of the key points of the new law:
- Security deposits are capped at one month’s rent for all rental properties in California.
- Small landlords who own only two properties with a total of four or fewer units are exempt from the law.
- Landlords can still seek damages from tenants responsible for harm to the property that exceeds the amount of the security deposit.
- The new law goes into effect on July 1, 2024.
This new law is a positive step towards making housing more affordable and accessible for renters in California.
