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New law caps security deposits

San Francisco Apartment
Ken Walton
/
Flickr / Creative Commons
An apartment building in San Francisco

In a new California law that went into effect July 1st, security deposits for renters can be no higher than one month’s rent.

California property owners used to be allowed to collect a maximum security deposit of two months’ rent for unfurnished units, three months’ rent for furnished units, plus first month’s rent on top.

In San Francisco, where the monthly rent averages around 3,300 dollars, that comes out to a potential deposit of more than 12 thousand dollars just to move in.

But that’s no longer the case, under legislation signed into law by Governor Gavin Newsom last October – to offset the crisis in affordable housing.

The California Apartment Association is on record against the law.

In an opposition letter, Debra Carlton, executive vice president of state public affairs, said: “Further limiting a property owner’s ability to financially cover property damage or unpaid rent is an unfair imposition for rental housing providers.”

She also pointed out the financial strain it could cause smaller landlords.

The new law does make an exception for some small landlords. The maximum security deposit cap rises to two month’s rent – if the property owner owns no more than two residential rental properties, that collectively include no more than four rent-able units.

Christopher Alam is a writer, producer, and journalist based in San Francisco.