Ab12

AB 12 — California Security Deposit Reform ## Overview of AB 12 (2023) Assembly Bill 12, signed by Governor Newsom in October 2023 and effective July 1, 2024, fundamentally changed California's security deposit law. Prior law allowed landlords to collect up to two months' rent (unfurnished) or three months' rent (furnished) as a security deposit, plus a pet deposit. AB 12 reduced the maximum security deposit to one month's rent for most landlords — regardless of whether the unit is furnished or unfurnished. --- ## What Changed Under AB 12 | Category | Prior Law | AB 12 (Effective 7/1/2024) | |---|---|---| | Maximum deposit (unfurnished) | 2 months' rent | 1 month's rent | | Maximum deposit (furnished) | 3 months' rent | 1 month's rent | | Small landlord exception | None | 2 months' rent (see below) | | Pet deposits | Allowed separately | Included in 1-month cap | Small landlord exception: A landlord who: - Owns no more than 2 residential rental properties (totaling no more than 4 units), AND - Is a natural person or family trust (not an LLC, corporation, or other entity) ...may collect up to 2 months' rent as a security deposit. --- ## What Remains Unchanged AB 12 did not change the rules governing use and return of deposits (Civil Code §1950.5): - Landlord may use deposit for: unpaid rent, cleaning (to restore to move-in condition), damage beyond normal wear and tear, future repairs agreed in writing - Landlord must return deposit (or itemized accounting of deductions) within 21 days of tenant vacating - Failure to timely return: landlord forfeits right to retain any portion and may owe statutory…