What is AB 2785?

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 landlords charge for checking if someone can be a tenant. Here’s what it plans to do.

What is AB 2785?

Security Deposit Interest

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

How Does AB 2785 Impact Just Cause Tenant Protections in the City of Glendale?

AB 2785 significantly strengthens just cause tenant protections in the City of Glendale. This legislation provides necessary safeguards for tenants facing eviction, ensuring they cannot be removed from their homes without valid reasons. The impact of this law on just cause tenant protections in Glendale cannot be overstated.

Screening Fee Caps

The bill suggests a new rule to set the tenant 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 tenant backgrounds.

The bill says landlords 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, landlords 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, landlords could ask for up to two months’ rent. Small landlords, 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.