July 2024 Blog
AB 12:
Assembly Bill 12 (AB 12) in California, effective July 1, 2024, significantly changes the rules regarding security deposits for residential rentals. Here are the key points of the legislation:
- Limitation on Security Deposits: Under AB 12, landlords are prohibited from demanding a security deposit exceeding the equivalent of one month’s rent. This is a reduction from the previous allowance of up to two months’ rent for unfurnished units and three months’ rent for furnished units.
- Exemptions for Small Landlords: There is an exception for small landlords who own no more than two residential properties with a total of up to four rental units. These landlords can continue to request a security deposit up to the equivalent of two months’ rent. However, this exception does not apply if the prospective tenant is a service member; in such cases, the cap remains at one month’s rent.
- Return of Security Deposits: The bill also reinforces the requirements for landlords to provide an itemized statement and return any remaining portion of the security deposit within 21 days after the tenant vacates the property. This statement must include detailed descriptions of any deductions for repairs or cleaning, along with corresponding receipts or invoices.
- Impact on Housing Affordability: The primary aim of AB 12 is to enhance housing affordability by reducing the upfront financial burden on tenants. By capping security deposits, the state hopes to make it easier for more people to secure housing.
- Balance for Landlords: While the law aims to protect tenants, it also allows landlords to seek damages exceeding the security deposit amount through other legal means, ensuring that property owners are not left vulnerable to significant losses from tenant damages.
Sewer Billing Updates:
Effective July 1, 2024, Monterey One Water initially planned to change its billing process by including the wastewater service fee as an annual charge on property tax bills instead of issuing bi-monthly bills. This change was intended to support rising operational costs and aging infrastructure.
However, this planned change has been canceled. The Monterey One Water Board of Directors decided to continue with the bi-monthly billing directly from Monterey One Water, and there will be no transition to property tax bill inclusion. Therefore, residents will continue to receive their wastewater service bills every two months as they have in the past.