As real estate professionals at JohnHart Real Estate, staying informed about recent changes in security deposit regulations and tenant rights is crucial. This knowledge helps us provide accurate guidance to our clients and ensures that we represent landlords and tenants properly. In this blog post, we'll cover the key updates to security deposit laws and tenant rights that you need to be aware of, incorporating insights from Eqwitek’s latest presentation.

Key Changes to Security Deposits (Effective July 1, 2024)

New Limit on Security Deposits
Starting July 1, 2024, California landlords are limited to charging a maximum of one month’s rent as a security deposit. This is a significant shift from the previous limits, which allowed up to two months’ rent for unfurnished units and three months’ rent for furnished units.

Exceptions for Small Landlords
Small landlords, defined as those who own no more than two residential properties with a total of up to four units, 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. For service members, the maximum security deposit remains one month’s rent.

Uniform Treatment of Furnished Properties
The distinction between furnished and unfurnished properties regarding security deposit limits is no longer applicable. Both are subject to the same one-month rent limit.

Handling Existing Security Deposits
Security deposits collected before July 1, 2024, can remain unchanged. These deposits do not need to be adjusted to meet the new limits retroactively.

Pet Deposits
Pet deposits must be included within the overall security deposit limit. Even if categorized as an “additional deposit,” it must not exceed the new limit of one month’s rent (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 permissible. Any charges for the last month’s rent must be considered part of the security deposit.

Best Practices for Tenant Rights and Landlord Responsibilities

Pre-Move-Out Inspection
Tenants have the right to request an initial inspection before moving out. This allows them to address any issues identified by the landlord and potentially avoid deductions from their security deposit.

Itemized Statement of Deductions
Landlords are required to provide an itemized statement detailing any deductions from the security deposit within 21 days after the tenant moves out. If repairs are incomplete, a good faith estimate must be provided, followed by a final statement once the work is done.

 Legal Implications and Penalties for Non-Compliance

Penalties for Violations
Landlords who fail to comply with security deposit laws may face significant penalties. Courts can award tenants up to twice the amount of the deposit, in addition to actual losses, if the landlord is found to have acted in bad faith.

Additional Protections for Service Members
Service members have extra protections regarding security deposits and evictions. It's advisable to guide service member clients to their base legal office for specific assistance.

 Required Lease Disclosures

Landlords must provide specific disclosures in lease agreements to comply with California law. These include:

- Agency Disclosure: Required for leases longer than one year.
- Asbestos Disclosure: Necessary if applicable.
- Bed Bug Disclosure: To inform tenants about potential infestations.
- Carbon Monoxide Detector Compliance: Confirmation of functional detectors in the unit.
- Flood Disclosure: If the property is 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: To inform tenants about any mold issues or pest control measures.
- Rent Cap and Just Cause Eviction Law: Disclosure about rent caps and just cause eviction requirements.

Staying updated on changes in security deposit regulations and required lease disclosures is essential for ensuring we represent our landlords and tenants accurately and effectively. By following these new rules, we can avoid legal issues and provide our clients with the best possible service. For more detailed information and legal assistance, consult relevant legal resources or seek professional legal advice.

For any questions or further assistance, contact Eqwitek at info@eqwitek.com or visit Eqwitek.com.