Local realtors and property manager react to new California law caps security deposits for renters

SANTA BARBARA, Calif. — Moving forward, almost all new rental contracts in California will require no more than one month’s rent as a security deposit.
 
However, existing rental agreements that require more than one month’s deposit will not be affected. 
  
Michelle King recently started her own property management company— connecting homeowners with tenants and helping ensure everything runs smoothly for both parties. 
 
She says Assembly Bill 12, which caps most security deposits at one month's rent, will help folks in expensive areas like Santa Barbara.
  
“People don't have to come up with so much money just to get into housing. You know, it can be expensive to rent here in Santa Barbara. And so it really does help people who are at, you know, entry-level who are trying to get by here,”  Michelle King, who is the owner of King and Company.  

There is one main exception to this new law. 
 
Landlords are able to charge a maximum of two months’ rent as a security deposit so long as they own no more than two residential rental properties with collectively no more than four units. 
 
Luxury real estate agent Yawar Charlie says it’s great that smaller mom-and-pop landlords who rely on rental revenue for their retirement are not impacted. 
 
“The purpose of having a multiple-month security deposit is just what it sounds like. It's there to protect the landlord should there be any damage to their property. With housing renovation costs and the costs of replacing it if it's furnished, a couch or a table can be quite high right now,” said Charlie.
 
Before this law went into effect, California landlords were able to charge up to two month’s rent as a security deposit for unfurnished properties and up to three months’ rent for furnished properties. 
 
Assembly Bill 12 treats unfurnished and furnished properties the same. 
 
“The only feedback I've had so far on it was my clients who have the higher-end homes with the higher-end furnishings. So they have some concerns about what to do. You know, they think maybe a month wouldn't cover damage to their entire beautiful home and all the interiors and all the furnishing,” said Michelle King.
  
Landlords can seek additional fees at the end of a lease if there is damage that exceeds the value of the security deposit.