A corporation that owns 60 rental units in California rents a home to a tenant and requires both a security deposit and 'last month's rent' upfront. Under the AB 12 amendments to Civil Code section 1950.5 (effective July 1, 2024), what is the maximum total the landlord may collect at move-in?
Correct Answer
C) First month's rent plus one month's security deposit
Civil Code section 1950.5(c) caps security, however it is denominated, at one month's rent in addition to the first month's rent. Because 'security' covers any advance payment that protects the landlord, prepaid 'last month's rent' counts against that same cap rather than sitting outside it. A corporate landlord cannot use the narrow exception that lets a natural person, or an LLC whose members are all natural persons, owning no more than two residential properties with no more than four dwelling units total collect two months' security. This landlord may therefore collect first month's rent plus one month's security.
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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.
More Contracts Questions
Which of the following is required for a valid contract in California?
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Specific performance in North Dakota:
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- → Which of the following is NOT required for a valid bill of sale?
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- → Johnny wants the seller's patio furniture included in his purchase of a house. Before the offer is signed and delivered to the seller, he asks his agent to attach a page covering the furniture to the offer. That attached page is best described as:
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