I collected security deposits the old way for a decade: two months on unfurnished homes when the property warranted it. That option is mostly gone now, and I still meet San Diego owners who do not know it.
What the cap actually says
California now caps security deposits at one month’s rent for most landlords, furnished or not. There is a narrow exception for some small landlords, and whether it reaches you depends on how you hold title and how much you own, which is exactly the kind of detail worth confirming for your specific situation rather than assuming. Owners who moved their rental into an LLC for liability reasons are often surprised by where that leaves them.
Why one month changes the math
The practical consequence is simple to state and expensive to ignore: one month of deposit now has to cover what two months used to. That raises the stakes on everything that happens before the lease is signed. Screening carries more weight, because the deposit no longer absorbs a bad placement. Move-in documentation carries more weight, because deposit disputes get decided on evidence and the amount in dispute is now the whole cushion. And the deposit itself stops being the real protection, which is a conversation I have with every owner: the deposit is the first layer, not the plan.
What I do differently under the cap
What I do differently under the cap. Screening runs seven checks before anyone gets keys, because the cheapest deposit claim is the one that never happens. Move-in and move-out get documented to a standard a small-claims judge would respect. And the protection stack around the property, damage coverage, lost-rent coverage, pet coverage where it applies, does the work deposits used to pretend to do.
The number worth knowing
One number worth knowing: on a $3,500 San Diego rental, the difference between the old two-month practice and today’s cap is $3,500 of cushion that no longer exists. The owners who adjust are the ones who treat that as a screening and documentation problem, not a pricing problem. Raising the rent to compensate for a capped deposit just prices you out of the applicant pool that passes screening in the first place.
The rules that did not change
The rules on holding, deducting from, and returning deposits did not get simpler, and the timelines did not get looser. That part of the law has been catching landlords for decades and still does.
The deposit is one month now. The protection has to come from somewhere else.
Joe Wiseman is a licensed California broker (DRE #02043323) and owns Best Nest Property Management in San Diego.