Senate rejects security-deposit bill in wake of CAA opposition

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A bill that would have unfairly penalized landlords who make honest mistakes regarding security deposits has died on the Senate floor, thanks largely to opposition from the California Apartment Association.

Late Wednesday, Sen. Mark Leno’s SB 603 received 18 no votes, 13 yes votes and eight abstentions. Prior to the roll call, Sen. Roderick Wright, D. Los Angeles, spoke against the legislation, reflecting many of CAA’s reasons for opposition.

Sen. Mark Leno

Sen. Mark Leno

Although the bill had undergone substantial amendments, SB 603 remained bad for the rental housing industry. The original, more problematic version would have required that landlords pay interest on security deposits, a mathematically faulty provision that Leno removed after CAA waged a strong lobbying effort — and more than 800 CAA members wrote opposition letters to lawmakers.

Issues with SB 603’s penalty provisions, however, kept the bill unpalatable.

The bill would have forced a small-claims court judge to award penalties against an owner if a tenant successfully demonstrated that he or she did not receive a legally owed security deposit — regardless of the landlord’s reasoning for withholding it.

At the same time, it would have mandated high penalties for any security deposit error, even a minor mistake, such as with calculating deductions. All mistakes would be treated as if committed in bad faith.

CAA thanks its members for helping to keep this bad bill off the books.

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