Landlords who aren’t sure how much they can charge for a security deposit can easily find the answer within California state law. The maximum you can take for a security deposit is the equivalent of two months’ rent for an unfurnished property. However, if you have a furnished property, you can take as much as three months of rent as a deposit. There are a few other things to consider when you’re collecting that deposit.

Using Security Deposits as Rent

We always recommend that our landlord clients never earmark any of those security deposit funds towards the last month’s rent. You definitely want to make sure you have enough money to utilize if you have damages that are above normal wear and tear. You’ll need to pay for those repairs out of the security deposit, and you want to have it available.

Charge a Consistent Security Deposit

Another thing you don’t want to do is to charge a security deposit amount on a case by case basis. Your security deposit should always be the same. Have a written criteria set up in advance so you can be fair and consistent, and you won’t be accused of discrimination.

Make Sure Tenants Can Provide Funds in Advance

We also want to see tenants who can provide the security deposit funds when they’re required. If you have a tenant who pushes back against the security deposit amount, or they can’t afford to come up with that much, it’s usually a serious red flag. Collect all the move in funds during the lease signing. You want to get the security deposit as well as the first month’s rent payment before you hand over the keys. Those move in funds need to clear before your tenant moves in, otherwise you’re putting yourself at risk financially.

Please don’t hesitate to contact us at Foundation Rentals and Relocation if you have any questions about your security deposit practices.