Ca Ab12 Security Deposit

California AB 12 — Security Deposit Limits (2024) Exam: California Real Estate Salesperson Last Updated: June 2026 --- ## Overview California Assembly Bill 12, signed into law in October 2023 and effective July 1, 2024, dramatically reduced the maximum security deposit landlords may collect for most residential rental units. This is one of the most significant changes to California landlord-tenant law in recent years and is frequently tested on the California real estate exam. --- ## The Core Change: 1 Month's Rent Maximum | Before AB 12 (pre-July 1, 2024) | After AB 12 (effective July 1, 2024) | |---|---| | Unfurnished: up to 2 months' rent | All units: 1 month's rent maximum | | Furnished: up to 3 months' rent | Furnished or unfurnished: same 1-month limit | | First month's rent + 2 months deposit common | First month's rent + 1 month deposit maximum | > Exam Tip: The old rule (2x unfurnished, 3x furnished) appeared on California exams for years. As of July 1, 2024, the answer is 1 month for BOTH furnished and unfurnished units — unless the small landlord exemption applies. ### Legal Basis California Civil Code §1950.5 governs security deposits. AB 12 amended this section to cap deposits at one month's rent for most residential tenancies. --- ## The Small Landlord Exemption Not all landlords are covered by the 1-month limit. AB 12 created a specific exemption. ### Exemption Criteria — ALL of the following must be true: 1. The landlord is a natural person (individual, not a corporation or LLC) 2. The landlord owns no more than 2 residential rental properties 3. The total number of rental units across all…