Landlords are Upset! What Could This New Law Mean for Tenants?!
Big Changes in California Security Deposit Laws: My Personal Take
Hey everyone,
Big changes are coming to the California rental market, and as a landlord myself, I wanted to share some important updates with you. These changes will impact both landlords and tenants, so it's crucial to stay informed.
My Journey with Security Deposits
Over the years, I've relied on security deposits as a safety net. Until now, landlords could request up to two months' rent for unfurnished properties and up to three months' rent for furnished ones. This has been a standard practice, offering some peace of mind in case of damages or unpaid rent.
The New Rules
Starting July 1st, 2024, everything changes. Landlords, including myself, will be restricted to demanding or receiving no more than one month's rent as a security deposit, regardless of whether the property is furnished or unfurnished. This is a significant shift, especially for those of us with short-term rentals.
However, there is an exception:
Natural Persons: If the landlord is a natural person, which includes those using living trusts and limited liability corporations.
Limited Properties: The landlord must own no more than two residential rental properties, which together include no more than four dwelling units offered for rent.
Service members are exempt from this new restriction, meaning landlords can still require higher security deposits from them.
The Impact on My Properties
This change has me thinking about how I'll need to adjust my approach:
Tightening the Process: I'll probably need to be more stringent with the rental application process. Higher credit scores and stronger income qualifications might become the norm to mitigate the increased financial risk.
Potential Rent Increases: To cover potential losses, I might have to consider raising rental rates. It's not ideal, but it's a possibility many landlords might explore.
A Personal Perspective
As a property owner, these changes hit close to home. Managing multiple properties means adapting to new regulations constantly, and this one is no exception. It's a balancing act, trying to protect my investments while offering fair and affordable housing.
Your Thoughts?
I'd love to hear your perspectives on this. Whether you're a landlord or a tenant, how do you think these changes will impact you? Are there any benefits or downsides you foresee? Let's discuss in the comments below.
Stay tuned for more updates, and feel free to reach out if you have any questions or need advice on navigating these new rules.
Best, May Kunka