A corporate landlord owning 15 residential rental properties in California enters into a new lease for an unfurnished single-family home. Under AB 12 (effective July 1, 2024), what is the maximum security deposit this landlord may collect?
Correct Answer
D) One month's rent
California AB 12 (effective July 1, 2024) amended Civil Code §1950.5 to cap security deposits at one month's rent for most residential landlords, regardless of whether the unit is furnished or unfurnished. The one-month cap applies here because the landlord is a corporation owning more than two residential properties — it does not qualify for the small-landlord exception, which is limited to natural persons owning no more than two residential properties with no more than four total units.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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