A Security Deposit Is Now Limited To One Month's Rent

This law limits the amount of a security deposit you can collect for residential property in the State of California.


1. Until July 1, 2024, the limit is two times the monthly rent (or, for furnished units, three times the rent).


2. After July 1, 2024, the limit is one month’s rent.


3. Exception: For landlords who own no more than two residential rental properties, that collectively include no more than four total units for rent, the limit is two times the monthly rent. This applies only if the landlord is a natural person or a limited liability company in which all members are natural persons.


4. Stradegy: Assuming you have multiple buildings, all containing 4 units or less, consider putting each building in a separate Limited Liability Company (LLC). In this way, you will still be able to collect a security deposit equal to 2 month's rent.