🏡 California’s New Security Deposit Law 2024: What Landlords and Tenants Need to Know
California’s rental housing market is about to experience a significant change starting July 1, 2024. A new law amends how much landlords can collect as a security deposit—a change that impacts both landlords and tenants across the state, especially in high-demand areas like Irvine, Orange County.
As a seasoned real estate agent in Irvine, I’ve worked with countless landlords and tenants who’ve asked the same question: “How much can I legally ask for or pay in a security deposit?” This new regulation gives us a clearer, and in many cases, fairer answer.
💰 What’s the New Limit on Security Deposits?
Under the new California Civil Code § 1950.5(c)(1), the default limit on a residential rental property security deposit is now:
No more than one month’s rent
(In addition to the first month’s rent)
This means whether the unit is unfurnished or fully equipped with amenities, landlords can no longer charge two or three months’ worth of rent upfront as security—unless they meet an exception.
⚠️ EXCEPTION: When Can Landlords Collect Up to Two Months’ Rent?
Yes, there’s an exception! A landlord can collect up to two months’ rent as a security deposit only if both of these conditions are met:
- The landlord is a natural person or a family trust (not a corporation or REIT), and
- The landlord owns no more than two residential rental properties, which together include no more than four rental units.
That’s it. If you’re a small-scale landlord renting out a duplex or a couple of condos you personally own, this law likely won’t affect your current practices.
As a local Irvine realtor, many of my clients—especially first-time investors—fall into this small landlord category. This rule is actually protective of them, allowing flexibility while maintaining fairness for tenants.
🪖 Special Rule for Members of the Armed Services
For active duty military members or California National Guard, even if the landlord qualifies for the exception above:
They still cannot charge more than one month’s rent as security deposit.
This includes service members in:
- Army, Navy, Air Force, Marines, Coast Guard, Space Force
- California National Guard, State Guard, Naval Militia
It’s a welcome protection, and one I fully support as someone who has helped numerous military families relocate to Irvine and nearby communities.
📝 Documentation Required for Exceptions
Landlords who do qualify for the exception (2 months’ rent) must sign a declaration confirming their eligibility and status, including:
- Their ownership structure (natural person or family trust)
- Property count and unit count
This form must be retained and may be reviewed in case of a tenant dispute.
📌 Why This Law Matters (and My Take as a Realtor)
From my experience representing both investors and renters in Orange County, this law brings much-needed transparency and uniformity. It lowers barriers for tenants, especially those just starting out, while still giving room for small mom-and-pop landlords to operate effectively.
That said, I’ve already advised several of my landlord clients in Irvine and Tustin to review their leases and update their rental procedures before July 1st hits.
If you’re a landlord unsure how this change affects your leasing process—or a tenant wondering whether your current lease is compliant—reach out and I’d be happy to walk you through it.
📞 Need Help Navigating California’s Rental Laws?
I’m Hana Jung, your trusted Irvine & Orange County Realtor. With decades of real estate experience and deep knowledge of California’s legal landscape, I’m here to guide you.
🔗 www.hana-realty.com
📞 213-369-3959
📧 [email protected]
