New California law limits security deposits to 1 month's rent, with some exceptions

Until now, California's security deposit limit has not been changed since 1977

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A new California law that took effect Monday limits the amount landlords can require as a security deposit to one month’s rent, with some exceptions.

Previously, landlords could require up to two months' rent, or three, if the apartment is furnished.

This marks the first change to the state’s security deposit limit since 1977, when the average rent for a one-bedroom apartment in California was $220 a month. The average rent has since skyrocketed nearly seven-fold to roughly $1,700 per month.

Under the new law, security deposits are now capped at one month’s rent for landlords with more than two properties or a total of four rental units. Any landlords below that threshold can still require two months' rent as a deposit.

That exception does not apply to service members, who can now only be required to pay one month’s rent as a deposit regardless of the landlord’s properties.

For tenants trying to make ends meet, that extra cash may make a big difference.

Mary Lundy is one of those renters impacted by the new law. She has to move out of her East Village apartment while her landlord repairs the building. Lundy said she’s struggling to find a new place to live, in part because she has to put up a security deposit and the first month’s rent on a fixed income.

“Coming up with the money, I could do it with my Social Security check on the third, but that means I’d be broke because most places ask for two months,” Lundy said.

Attorney Dan Lickel, who often represents tenants, wants everyone to know their rights.

“If you’re approaching an individual landlord, and that landlord wants two months as a deposit, you need to ask some follow-up questions," Lickel said. "How many other rental properties do you have?”

Lickel said the law will primarily protect renters who have low credit because they’re the ones who are most often asked to put up several months of rent as a deposit — which Lundy has found to be true in her search.

“It’s real hard because most of the places around here ask for two months,” Lundy said. “The ones that I’ve found that don’t want that, they want an almost perfect credit rating. I’ve got good, very good credit and even with that, they want in the 700s, which I don’t know anybody that has a 700 credit rating.”

Lickel said those who already have a place to live are also protected under the new law from something he’s seen often: a landlord’s sudden request to change the terms of their lease.

“Tenants no longer have to worry about the landlord serving a notice asking for a huge increase in the deposit,” Lickel said, adding that taking the time to learn the law can help protect renters in the long run.

“Folks, sometimes, they don’t see their deposit as being an investment, and they can protect that investment,” he said.

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