California legislation that would limit security deposits to one month’s rent for both furnished and unfurnished units is now on the governor’s desk.
AB 12 by Assemblyman Matt Haney, D-San Francisco, passed both the Senate and the Assembly houses earlier this month.
The legislation represents a significant departure from current law. Presently, landlords may charge up to two months’ rent for an unfurnished unit and three months’ rent for a furnished one.
The bill does allow small landlords to collect a larger security deposit — up to two months’ rent. To qualify, individual landlords must hold property as a “natural person,” a limited liability company, or a family trust, and they must own nor more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
This exception is not applicable when the prospective tenant is a military service member.
Gov. Newsom has until Oct. 14 to sign or veto legislation this year. If signed by the governor, the law won’t go into effect until July 1, 2024.