How the New San Diego Security Deposit Law Changes Rental Rules
A new security deposit law in San Diego is changing rental rules around security deposits. Governor Newsom recently signed Assembly Bill 12 to limit how much landlords can charge tenants for security deposits, providing financial relief for tenants when it comes to upfront rental costs, however, leaves some landlords worried about recovering damages and unpaid rent. Read more to learn about the new bill and how it may impact you as a tenant, landlord, or property manager come July, 2024.
What Changed with the New Security Deposit Law in San Diego?
On October 11, 2023, Governor Newsom signed a bill placing a cap on security deposits for rentals in San Diego. Starting on July 1, 2024, the new law limits deposits to just one month's rent for all residential properties, furnished or not. Previously, landlords could charge as much as 2-3 months' rent upfront as a security deposit. This created a barrier for lower income residents struggling to pay rent, plus a sizable deposit. By capping the security deposit at one month's rent, the new law aims to ease this financial strain. It also promotes consistency, ensuring tenants pay the same maximum deposit regardless of unit size or type.
How Does the New Law Impact San Diego Landlords and Tenants?
For tenants, the lower deposit maximum means more available funds for moving, furniture, and living expenses. Renting is now more accessible for anyone previously shut out by unaffordable upfront costs.
Landlords may worry this leaves them unprotected from property damages or unpaid rent. However, lower barriers to enter the rental market can improve tenant retention. Consistent occupancy enables landlords to better predict income.
Some landlords and industry groups oppose the new deposit limits. In May 2024, the California Apartment Association wrote that the law unfairly imposes on rental housing providers by limiting their ability to financially cover damages and unpaid rent.
What Should San Diego Renters and Landlords Do Now?
Tenants should review their lease terms and know their rights under the new deposit limits before July 2024. Landlords should proactively evaluate screening procedures and saved maintenance funds. Strong communication and record-keeping benefit all parties.
At the core, San Diego's new security deposit law makes renting more affordable. By capping deposits at one month's rent, the law standardizes security deposit practices for all residents. Both tenants and landlords should understand these changes to navigating San Diego's rental market. If you are a property owner struggling to interpret the new security deposit rules, reach out to us here at Harland Property Management. We help owners successfully adapt to San Diego's changing rental landscape.