Insights into laxer security deposit legislation came to light in a seemingly unimportant administrative agenda item of the Santa Monica Rent Control Board.

At the end of the panel’s Aug. 8 meeting, the panel unanimously revised the rules to align with a new state law that prohibits landlords from requiring a security deposit “in an amount that exceeds one month’s rent.” California lawmakers recently revised the state’s civil code on security deposits. AB 12 went into effect July 1 and limits the amount a landlord can require as a security deposit to one month’s rent, regardless of whether an apartment is furnished or not.

Previously, landlords could charge up to two months’ rent as a security deposit for unfurnished apartments and up to three months’ rent for furnished apartments. Under the new law, a security deposit of two months’ rent is only permitted if a landlord owns no more than two rental properties with a total of four or fewer apartments (unless the prospective tenant is a member of the military).

The requirement for a security deposit of two or three months’ rent is one of the many hurdles that prevent apartment seekers from finding a place to live. According to ApartmentList, the average rent for a one-bedroom apartment in Santa Monica is $2,307. If a landlord were to require two months’ rent as a security deposit at that average price, the cost of moving in would rise from $4,614 to $6,921 – a herculean hurdle for many.

Rep. Matt Haney (D-San Francisco) was the primary sponsor of AB 12, noting that 53% of California renters said they could afford the rent for an eligible apartment but would not put down two months’ rent as a security deposit. With the bill, California is now the 12th state in the U.S. to limit security deposits in this way.

“Massive security deposits can create insurmountable barriers to housing affordability and accessibility for millions of Californians,” Haney explained before AB 12 went into effect. “Despite skyrocketing rents, laws to ensure security deposit affordability have not changed significantly since the 1970s. The result is that landlords lose good tenants and tenants remain in housing that is too crowded, unsafe, or far from work or school. This new law is a simple, common-sense change that will have a tremendous impact on housing affordability for California families while meeting landlords’ need to protect themselves against potential liability.”

Other security deposit proposals are currently being considered in the state legislature, including AB 2801, introduced by Assemblywoman Laura Friedman (D-Burbank). The bill would make several changes to the actual return of security deposits from landlords to tenants after the tenant leaves the tenancy. For example, it would require landlords who withhold security deposits under the guise of repairs to provide photographic evidence of those repairs and proof that the repairs were made.

Friedman said the bill would protect young people who are “taking their first steps 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 cannot keep security deposits just because they want to or to pay for improvements for their next tenant.”

The bill also states that a landlord “may not require a tenant to pay” for professional carpet cleaning or other professional cleaning services related to the subsequent tenancy “unless reasonably necessary to return the premises to the condition in which they were at the beginning of the tenancy.” According to the bill, tenants may not retain their security deposit due to “normal wear and tear” of an apartment.

Earlier this year, Parliamentary Counsel Brian Augusta gave a presentation on the state’s negotiations with the Rent Control Board, explaining the law’s effectiveness in keeping security deposits from tenants.

“There is a lot of abuse in this area. Some people believe that landlords assume that they will get most of the deposit back at the end of the tenancy and keep it,” says Augusta.

The bill received a third reading in the state Senate on June 13, with the final day for bills to be passed on August 31.

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