THE LIMITS OF TRADITIONAL SECURITY DEPOSITS A security deposit is meant to cover unpaid rent, damages beyond normal wear and tear, and sometimes, cleaning costs. Most landlords rely on it as their first line of protection. The problem is that it’s often not enough. In many states, laws limit how much you can collect. For example, California’s updated security deposit law under AB 12 (Civil Code § 1950.5) now generally caps deposits at one month’s rent, replacing the prior 2–3 month limits, with a narrow exception allowing up to two months’ rent only for small landlords who own no more than two properties (four units total) and meet specific ownership criteria.
WEBINAR: Watch Top 5 Security Deposit Mistake California Landlord Make
New York codes limit deposits to one month’s rent regardless of furnishing. Texas doesn’t set a strict cap, but still regulates how deposits must be handled and returned. Across the board, the trend is clear. States are limiting how much landlords can collect and tightening rules on how deposits are stored, itemized, and returned. That means your financial buffer is often smaller than the actual risk.
STATES ARE LIMITING HOW MUCH LANDLORDS CAN COLLECT AND TIGHTENING RULES.
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