• calendar_month July 1, 2024

As a Realtor with over a decade of property management experience, I’m dedicated to staying current on tenant and landlord regulations. This expertise ensures my clients receive the most knowledgeable and comprehensive guidance. Let’s delve into the latest updates on security deposit regulations and tenant rights, which are crucial for all parties involved.

Updates on Security Deposits (Effective July 1, 2024)

New Security Deposit Limits

From July 1, 2024, California landlords are restricted to charging no more than one month’s rent as a security deposit. This is a significant change from the previous allowance of up to two months’ rent for unfurnished units and three months’ rent for furnished units.

Small Landlord Exceptions

Small landlords, defined as those owning no more than two residential properties with up to four units total, and who are either natural persons or LLCs with only natural persons as members, can still charge up to two months’ rent as a security deposit. The maximum security deposit for service members remains one month’s rent.

Uniformity for Furnished and Unfurnished Units

The previous distinction between furnished and unfurnished properties regarding security deposit limits has been removed. Both types are now subject to the one-month rent limit.

Existing Security Deposits

Security deposits collected before the July 1, 2024, deadline do not need to be adjusted to the new limits and can remain as they are.

Pet Deposits

Pet deposits must be included within the overall security deposit limit. Even if labeled as an “additional deposit,” it must not exceed the new one-month rent limit (or the applicable limit for small landlords).

First and Last Month’s Rent

Charging both the first and last month’s rent in addition to a security deposit is no longer permitted. Any charges for the last month’s rent must be part of the security deposit.

Best Practices for Tenant Rights and Landlord Responsibilities

Some of these practices may not be law, however it protects both landlords AND tenants when done against lawsuits and harm done.

• Pre-Move-Out Inspections: Tenants are entitled to request a pre-move-out inspection, allowing them to address any issues identified by the landlord and potentially avoid deductions from their security deposit.
• Itemized Deductions: Landlords must provide an itemized statement of any deductions from the security deposit within 21 days after the tenant vacates the property. If repairs are incomplete, a good faith estimate must be given, followed by a final statement once the work is finished.

Penalties for Non-Compliance

Landlords who do not comply with security deposit laws can face significant penalties. Courts can award tenants up to twice the amount of the deposit, in addition to actual damages, if the landlord is found to have acted in bad faith.

Required Lease Disclosures

Landlords must include specific disclosures in lease agreements to comply with California law, including:

• Agency Disclosure: Required for leases longer than one year.
• Asbestos Disclosure: Necessary if applicable.
• Bed Bug Disclosure: To inform tenants of potential infestations.
• Carbon Monoxide Detector Compliance: Confirmation of functional detectors in the unit.
• Flood Disclosure: If the property is located in a flood-prone area.
• Lead Hazard Pamphlet: For properties built before 1978.
• Meth Lab Clean-Up Order: If applicable, disclose any previous meth lab contamination.
• Mold and Pest Control Notices: Inform tenants of any mold issues or pest control measures.
• Rent Cap and Just Cause Eviction Law: Disclosure about rent caps and just cause eviction requirements.

Keeping up with changes in security deposit regulations and required lease disclosures is vital for accurate and effective representation of landlords and tenants. By adhering to these new rules, we can avoid legal complications and provide the best possible service to our clients. (For detailed information and legal assistance, please consult relevant legal resources or seek professional legal advice.)

For any questions or further assistance, contact me at janelle@jhagents.com and visit My Website for more resources.  Let's ensure you're up-to-date and compliant.