Help STOP AB 2785: Contact Your Legislator Today

A new bill in California, called AB 2785 and introduced by Assemblywoman Lori D. Wilson, is looking to make two big changes to rules about rental security deposits and the fees rental housing providers charge for checking if someone can be a renter.

Here’s what it plans to do: 

Security Deposit Interest

The bill says landlords must put a renters’ security deposits in a bank account that earns interest within 30 days of getting the money. If the law passes, rental housing providers must give back the security deposit plus the earned interest when the renter leaves.

Screening Fee Caps

The bill suggests a new rule to set the renter screening fee at a maximum of $50. Unlike the current law that changes the fee every year based on the Consumer Price Index (CPI), this bill wants to keep the fee fixed at $50, with no yearly increases. This is a big change from how California usually handles fees for checking renter backgrounds.

The bill says property owners must give back the screening fee in certain cases. If they don’t use the fee for checking references or credit reports, or if they don’t pick the applicant for the rental, they have to refund the fee. Also, if they charge more than the law allows, they must return the extra money. Plus, rental property owners need to clearly explain the refund policy on all rental application forms.

This bill is part of California’s larger effort to make renting less expensive beyond just the monthly rent. In 2023, a law was passed (AB 12 by Assemblyman Matt Haney) that starting July 1, 2024, will limit security deposits to one month’s rent for both furnished and unfurnished places. Before, rental housing providers could ask for up to two months’ rent. Small owners, who own only one or two properties with no more than four units in total, can still ask for two months’ rent as a deposit. But this exception doesn’t apply if the renter is in the military.

Contact legislators before 9 am on Tuesday, April 2nd

• Imposes unworkable administrative burdens in which housing providers may need to set up a separate bank account for each renter's security deposit.
• Could result in housing providers paying bank account maintenance fees in instances where the deposit amount does not qualify for a fee waiver, or the interest earned is insufficient to cover bank charges.
• Caps application fees at $50 without considering future inflationary increases, which could prevent housing providers from recouping necessary costs.