Effective July 1, 2024, California Assembly Bill 12 (AB 12) limits rental housing security deposits to one month's rent. This law applies to both furnished and unfurnished units. There are very few exemptions. One applies if “the landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.” To further clarify, this exemption includes properties throughout the United States, not just those within California. The exemption is specifically stated as such: 

• Small owner exemption: landlord that is a natural person or LLC in which all members are natural persons; owner owns no more than 2 residential rental properties that collectively include no more than 4 units
• Caveat: if resident is in the military, deposit cannot be more than 1x months rent

Click here for the full law: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB12

Please note this also means that investors will no longer be able to charge an additional pet deposit. Also of note, while this California law is effective July 1, it does NOT impact existing tenancy agreements. Any security deposit that’s part of a lease prior to this date will remain as is. 

As always, Rental Zebra’s job is to ensure its investors remain in compliance with local, state and federal regulations at all times, while continuing to maximize returns. As such, Rental Zebra is implementing this law. As vacancies occur, reminders of the new restriction will be shared.