Insights into more lax legislation regarding security deposits came to light in a seemingly minor, administrative agenda item for the Santa Monica Rent Control Board.
At the end of the board’s August 8 meeting, the board unanimously revised regulations to align with a new state law, prohibiting landlords from collecting a security deposit "in an amount of excess of a month’s rent." The California legislature recently revised the state’s civil code on deposits, with AB 12 taking effect on July 1 that limits the amount that a landlord can collect for a deposit to one month’s rent, regardless of if a unit is furnished or not.
Previously, landlords could require up to two months of rent as a security deposit for unfurnished units, and up to three months of rent for a furnished unit. Under the new law, the only time a two-month security deposit is allowed is if a landlord owns no more than two rental properties with a total of four units or less (unless the prospective tenant is a service member).
Requiring two or three months of rent as a deposit has been one of the many barriers preventing apartment hunters from finding their abodes. According to ApartmentList, the median rental on a one-bedroom apartment in Santa Monica is $2,307. If a landlord at that average price were to demand two months of deposit, that would increase move-in costs from $4,614 to $6,921, a herculean hurdle for many.
Assemblymember Matt Haney (D-San Francisco) was the point man on AB 12, stating that 53% of California renters indicated that they were able to afford rent on a prospective apartment, but couldn’t afford to pay two months of rent as a deposit. The bill now puts California as the 12th state in the nation to limit deposits in this manner.
"Massive security deposits can create insurmountable barriers to housing affordability and accessibility for millions of Californians," Haney stated before AB 12 went into effect. "Despite skyrocketing rents, laws on ensuring affordable security deposits haven’t changed substantially since the 1970s. The result is that landlords lose out on good tenants and tenants stay in homes that are too crowded, unsafe or far from work or school. This new law is a simple common sense change that will have an enormous impact on housing affordability for families in California, while also balancing a landlord’s need to protect themselves against potential liability."
Other moves on the deposit topic are currently making their way through the state legislature, including AB 2801 introduced by state assembly member Laura Friedman (D-Burbank). The bill would make several changes on the actual return of security deposits from landlord to renter after their tenancy, such as requiring that landlords withholding deposits under the guise of apartment repairs provide photographic evidence of such repairs, along with proof that repairs were completed.
Friedman said that the bill would protect youth "starting out on their own" as frequent renters.
"Security deposits can be prohibitively expensive and tenants’ ability to get them back can vary from landlord to landlord," Friedman wrote in the Pasadena Star-News. "My bill, AB 2801, will ensure that landlords can’t keep security deposits just because they want to or to pay for upgrades for their next tenant."
The bill also states that a landlord "shall not require a tenant pay for" professional carpet cleaning or other professional cleaning services associated with post-tenancy, "unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy." Under the bill, tenants cannot have their deposit taken via "ordinary wear and tear" of an apartment.
Earlier in the year, legislative advocate Brian Augusta gave a presentation on state dealings to the Rent Control Board explaining the bill’s effectiveness in retaining tenant deposit money.
"There’s a lot of abuse in that area, some believe that landlords assume that they’re going to get most of the security deposit back, they’re going to retain most of the security deposit at the end of a tenancy," Augusta said.
The bill was ordered to a third reading in the State Senate on June 13, with the final day for bills to be passed looming on August 31.
thomas@smdp.com
