A new California law, effective July 1, limits security deposits for long-term rentals to one month’s rent. This change aims to improve housing accessibility and affordability, but landlords are worried about its financial impact.
Previously, landlords could charge up to twice the rent for an unfurnished unit and three times for a furnished one. Zachary Orsinelli, a former Isla Vista renter, recalls the difficulty of paying such high deposits but was willing to do so for a desirable place.
After his lease ended, Orsinelli and his roommates were surprised when over $4,000 was withheld from their deposit despite no damage beyond normal wear and tear. After a lengthy legal battle, they recovered their deposit and additional damages.
Orsinelli believes that if the deposit had been smaller under the new law, the landlord might have been less aggressive in withholding funds. Legal Aid’s Alex Entrekin notes that reduced deposits may lead to fewer disputes and smaller claims.
Landlords worry that the lower deposit might not cover potential damages. Erin Murphey Doherty of Playa Life, which manages over 30 properties, says it’s too early to judge the law’s impact. Landlords can still sue for damages beyond the deposit in small claims court.
The bill, championed by Assemblymember Matt Haney, was designed with small landlords in mind. Those with up to two properties containing no more than four units can still charge higher deposits. Assemblymember Gregg Hart supports the bill, seeing it as a step toward reducing moving costs for renters. Entrekin agrees, but suggests continued exploration of other solutions to the housing issue.