California Assembly Bill 12 (AB 12) Impacts on Residential Rental Security Deposits and Pet Security Deposits
California Assembly Bill 12 (AB 12) Impacts on Residential Rental Security Deposits and Pet Security Deposits
As a landlord in California, it is essential to stay up to date with the latest legislative changes that may impact your business practices. One such change is the passing of Assembly Bill 12 (AB12), enacted to update the tenant security deposit requirements for residential rentals in California, which will become effective on July 1, 2024. Any security deposits collected before this date will not be subject to AB 12.
AB 12 was amended as to the subsection set forth in Civil Code section 1950.5(c) only, regarding how many months of rent can be collected as a security deposit for residential rentals in California. The other provisions of Civil Code section 1950.5 remain the same. The amendment changes the amount of a security deposit a landlord can collect to a maximum of one month (whereas the old law allowed two months maximum). However, if the landlord falls into two limited exceptions: 1) landlord is a natural person or limited liability company in which all members are natural persons; or, 2) landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent, except if the prospective tenant is a service member, then the landlord can charge two month's security deposit. (Civil Code section 1950.5(c)(4)(A).)
The current law states the total deposit amount, including the pet deposit, cannot exceed two months of rent in total. Under the new law, beginning on July 1, 2024, the total security deposit, a landlord can collect, including the pet deposit, cannot exceed one month of rent.
It's important to note that AB 12 does not eliminate the option of charging pet-related fees. Landlords can still impose a pet security deposit to compensate for any potential damages caused by pets, but this must be within the limits set by the bill. This means that if a landlord decides to collect a pet security deposit, it must be included within the overall security deposit amount collected, which cannot total more than one month’s rent.
However, although there are restrictions on the amount of pet security deposits in California, there are no set rules for pet rent or pet fees. For example, a landlord can choose to add an additional $20 to the rent payment each month to cover any pet amenities or maintenance costs that may arise. Some landlords choose to bundle pet rent with the standard rent to make rent collection more straightforward.
For landlords, it's crucial to become familiar with the specific regulations outlined in AB 12 to ensure compliance. Taking the following steps will help navigate the new legislation effectively:
Review Rental Applications: Update rental applications to include the question of pet ownership and disclose the requirement of a pet security deposit within the overall security deposit amount.
Revise Lease Agreements: Update lease agreements to reflect the changes brought about by AB 12. Clearly state the details of the security deposit and any pet-related provisions to avoid any confusion or disputes.
Educate Tenants: Take the time to educate current and potential tenants about AB 12 and the reasons behind these changes. This will help build transparency and trust between landlords and tenants.
Conduct Move-in and Move-out Inspections: Thoroughly document the condition of the rental unit before a tenant with a pet moves in and after they move out. This will help justify and calculate any applicable deductions from the security deposit.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice.