CA AB12

Reduces maximum security deposit for most residential tenancies from 2-3 months' rent to 1 month's rent, effective July 1, 2024.

Allows small landlords (natural persons or LLCs with all natural person members owning no more than 2 properties with 4 total dwelling units) to collect up to 2 months' rent in security deposits.

Exempts service members from the small landlord exception, ensuring they can only be charged 1 month's rent in security deposits.

Maintains existing protections for security deposit handling, including itemized deduction statements, tenant inspection rights, and penalties for bad faith retention of deposits.

Permits advance payment of 6 months' rent if lease term is 6 months or longer, regardless of deposit limits.