As of July 1, a new law in California limits security deposits on long-term rentals to no more than one month’s rent. This change is a positive development for renters who have faced high upfront costs in the past, but some landlords are concerned about the potential financial impact.
Previously, landlords could charge up to two or three times the monthly rent for unfurnished and furnished units, respectively. This often resulted in high upfront costs for renters, as Zachary Orsinelli, a former Isla Vista renter, experienced.
When his year-long lease ended, he and his roommates were surprised to see over $4,000 withheld from their security deposit, despite leaving no damages beyond normal wear and tear. After a lengthy legal battle, they were able to recover their deposit and additional damages. Orsinelli believes that a lower deposit requirement may have made his landlord think twice before withholding so much of their deposit.
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Reducing the deposit amount may have a positive impact on disputes over damages and could prevent unnecessary small claims actions, according to Alex Entrekin, Legal Aid’s managing attorney for housing. However, some landlords worry that a lower deposit may not cover damages incurred. Erin Murphey Doherty, co-owner of Playa Life/Isla Vista Owner LLC, which manages over 30 properties in Isla Vista, states that historically, they have never had insufficient deposit to cover damages, but the possibility remains.
Landlords can still seek damages greater than the amount of the deposit, and they can sue tenants in small claims court if they refuse to pay. Small landlords with two or fewer properties, each containing no more than four units, are exempt from the new law and may continue to charge up to twice the monthly rent for a deposit.
Assemblymember Gregg Hart, who represents Santa Barbara, voted for and praised the bill, noting that it will help ease the burden on the large number of renters in the state. While reducing the cost of moving is a positive step, Entrekin emphasizes the need to continue looking for other ways to solve the problem.
