Governor Newson recently signed into law- AB12 that limits security deposits to one month of rent for buildings of 5 units or more. The law becomes effective June 1, 2024. Prior to the new law, owners could collect security deposits of two months rent for unfurnished units in buildings of all sizes. The effect of the law is to make larger buildings more attractive to tenants and smaller buildings, including rental homes, less attractive. It also shifts risk from tenants to landlords.