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The landlord-tenant landscape is becoming more and more complicated to navigate, especially this year as a number of new laws take effect as part of California’s housing overhaul that Gov. Gavin Newsom approved at the end of 2023.
Since January, various laws have gone into effect, placing tighter restrictions on everything from rental increases to evictions. At the start of July, the state saw its newest law, which limits security deposits to the amount of one month’s rent. For Midpeninsula residents, who face some of the highest rents in the nation and have been paying north of $10,000 on security deposits, this could save the average renter thousands of dollars. In upcoming months, another ordinance set to go into effect in a handful of counties, including Santa Clara County, will separate onsite parking fees from the price of rent, potentially saving some renters even more dollars.
Here are seven state laws that have recently gone into effect, or will go into effect in upcoming months, that renters and landlords should know about.
Security-deposit cap
What it does: Limits security deposits to one-month’s rent.
California renters can no longer be asked for a security deposit larger than one month’s rent for leases signed on or after July 1 under Assembly Bill 12.
The measure, which went into effect at the start of July, stops the practice of landlords charging two or three times the monthly rent as a security deposit. (Already existing leases will not be affected by this new law.)
“Massive security deposits can create insurmountable barriers to housing affordability and accessibility for millions of Californians,” Assembly member Matt Haney, who wrote the bill, said in a June press release. “Despite skyrocketing rents, laws on ensuring affordable security deposits haven’t changed substantially since the 1970s.”
Along the Midpeninsula, median rents are among some of the highest in the nation. The median rent is $4,100 in Palo Alto, $4,200 in Menlo Park and $3,250 in Mountain View, according to data from Zillow updated on July 1. In comparison, the median rent is $2,830 statewide and $2,150 nationwide, according to Zillow.
Haney said 53% of California renters indicate that they are able to afford their rent but they’re unable to get an apartment because they simply can’t afford to pay the two month’s rent as a security deposit.
“This pushes many families, including those with individuals making minimum wage, to either forgo necessities such as food and utilities or acquire more debt to be approved for housing,” he said.
The new law does not impact small landlords. Those who own only two properties, with a total of no more than four units, are exempt. Landlords also still will be able to seek damages from tenants who are responsible for property damage that exceeds the amount of the security deposit.
Eviction protections
What it does: Strengthens the 2019 Tenant Protection Act bill capping rent hikes at 10% and prevents landlords from evicting tenants with no legal reason.
By changing the rules by which California property owners may evict tenants, Senate Bill 567, known as the Homeless Prevention Act, aims to prevent landlords from removing tenants to complete renovations or move themselves or their families into a unit, only to later put the rentals back on the market at higher prices, The new law, which went into effect on April 1, requires property owners or their family members to move into the property within 90 days and live there for at least 12 months when landlords make tenants move out so they can move in.
Landlords who terminate a lease due to a substantial renovation must provide a full description of the work and time frame and furnish a copy of the work permits. The tenant has the right to move back to the unit at the same rental rate if the work is terminated or not completed and the tenant has the first right of refusal to rent the unit at the new market rental rate.
Tenant applications
What it does: Simplifies the application process. Limits screening fees.
California landlords now have the option to provide receipts for tenant application/screening fees via email if both the landlord and applicant agree to it in advance under Assembly Bill 1764, which went into effect on Jan. 1.
The application/screening fee, which covers the out-of-pocket costs of gathering information concerning the applicant, such as screening services and consumer credit reporting services, must be no more than $59.67, and the receipt must include a breakdown of actual costs.
The changes are intended to simplify the rental application process and reduce paperwork. The Assembly Housing and Community Development Committee introduced the changes as part of an omnibus measure that was signed into law by Gov. Gavin Newsom in October 2023.
E-bike, e-scooter storage
Senate Bill 712
What it does: Sets standards for the storage of e-bikes, e-scooters and other battery-powered micro-mobility devices
Senate Bill 712, which went into effect on Jan. 1, regulates how e-bikes, e-scooters and other battery-operated “micro-mobility” devices are stored. The new regulations generally allow tenants to store these devices indoors, with some exceptions based on battery type, whether a tenant has liability insurance and whether the landlord can provide exterior storage. Under the new law, tenants are prohibited from conducting repairs or maintenance on these devices inside their unit.
The bill, introduced by Sen. Anthony Portantino (D-La Cañada Flintridge), aims to address concerns about fires linked to faulty batteries in some of these devices.
Credit screening restrictions
What it does: Prohibits credit screenings for tenants receiving government rent subsidies.
In cases when government rent subsidies are involved, Senate Bill 267 prohibits the use of a potential renter’s credit history as part of the application process without offering applicants the option of providing alternative evidence that they can pay rent such as pay stubs, bank statements or government benefits.
The law does not limit the ability of the landlord to request information or documentation to verify employment, to request landlord references or to verify the identity of a person.
The law, which went into effect in January, strengthens the state’s existing law under the California Fair Employment and Housing Act prohibiting housing discrimination based on a person’s source of income.
Criminal background checks
What it does: Halts mandatory evictions based on a tenant’s criminal history.
Assembly Bill 1418, which went into effect on Jan.1, prohibits cities and counties from requiring or encouraging landlords to evict tenants (and their entire family) because of a criminal conviction or suspected criminal activity or to perform a criminal background check on prospective tenants.
The law does not limit landlords from evicting residents based on other reasons, such as those involving nuisance complaints or failure to pay rent. Landlords also can still voluntarily screen tenants beforehand for prior criminal histories.
Introduced by Assembly member Tina McKinnor (D-Hawthorne), the new law aims to eliminate local “crime-free” housing policies that, she claims, have promoted housing segregation by targeting Black and Latino communities.
Onsite parking contracts
What it does: Separates onsite parking fees from the price of rent.
Beginning on Jan. 1, 2025, landlords of certain types of properties must “unbundle,” or separate the cost of onsite parking spaces from the residential rental agreement.
The bill does not regulate the price that the owner can charge for the parking space but requires that it be subject to its own rental agreement or an addendum to the tenant’s existing residential lease. A landlord can withhold permission for use of the parking space but cannot evict a tenant for not paying the parking space rent.
The bill, which is a pilot project, will only apply to new residential properties with 16 or more units in a handful of counties, including Santa Clara County.
A 2013 study investigating the effects of bundled rent found that mandated parking inclusion as part of a lease increases rent costs by an average of $200, according to a press release from Assembly member Wendy Carrillo, who introduced the bill. This measure will allow tenants to purchase parking only when needed.
The Silicon Valley Association of Realtors contributed to this article.