CA Assembly Bill Advances with New Regs on Security Deposits

The California Assembly Judiciary Committee approved a bill proposing new regulations on how landlords manage security deposits, while also aiming to implement new limits on tenant screening fees, the California Apartment Association said Friday. The bill now advances to the Assembly floor after the author agreed to make some key amendments.

At present, AB 2785 by Assemblywoman Lori D. Wilson (D-Suisun City) would cap rental application fees at $50. The CAA said this cap represents a substantial shift from the current law, which adjusts the maximum fees according to the Consumer Price Index.

The bill also stipulates that these application fees must be fully refundable to applicants who are not selected by landlords. Also, under the current version of AB 2785, landlords would be mandated to place these security deposits into dedicated, interest-bearing accounts at state or federally regulated financial institutions within 30 days of receipt.

CAA staff attorney Embert P. Madison, Jr. testified against the bill, citing the need to protect property owners from undue financial burdens and to ensure the continued availability of rental housing in the state. He told lawmakers that a response to legislative mandates such as this would be increased rents.

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