CA bill to limit security deposit to 1 months’ rent passes Assembly

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STATEWIDE – Assembly Bill 12, a law that would limit the amount a landlord can charge a tenant for security deposit to the amount of one month’s rent, passed the Assembly on May 22. Bill author Matt Haney (D-San Francisco) says creating a rental deposit cap is a simple change that will have an enormous impact on housing affordability for families in California.

Existing law states that a landlord can charge the amount of two months’ rent for a security deposit for an unfurnished apartment. The owner can charge the amount of 3 months’ rent for a furnished unit.

If AB 12 becomes law, California would be the 12th state to limit security deposits to only one months’ rent. New York, Kansas, Hawaii, and Alabama have already capped security deposits at one months’ rent. 

Average California Rent

According to Zillow, the average rent for an apartment in California is $2,950. That means that a tenant could be asked to pay up to $8,850 to move into an apartment. 

“When renters can’t afford deposits they often have to borrow from predatory lenders, go into debt, or just stay put,” said Haney who chairs the Assembly Renters Caucus. “Landlords lose out on good tenants and tenants stay in apartments that are too crowded or have unsafe living conditions.”

California Apartment Association Opposition

The California Apartment Association (CAA) says they understand the challenges tenants face in providing a security deposit. However, the association maintains that AB 12 is not the solution.

“Further limiting a property owner’s ability to financially cover property damage or unpaid rent is an unfair imposition for rental housing providers,” said CAA Executive Vice President, State Public Affairs spokesperson Debra Carlton in a February 10, 2023 opposition letter.

Carlton says the eviction process is pushing more single-family rental property owners to remove their homes from the market. 

“AB 12 will add to this troubling trend by reducing the security deposit amount to a sum that will almost never come close to covering the total outstanding rent,” said Carlton.

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The association says optional bonds and tenant insurance are other legislative proposals that strike a better balance than AB 12.

AB 12 will have no effect on potential liability. Landlords will still be able to seek damages  that exceeds the amount of the security deposit.

To read and track AB 12 visit https://legiscan.com/CA/bill/AB12/2023

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