California is a deep-blue state, with two-thirds Democratic majorities in both houses of the legislature. And when landlords tried to repeal rent control at the ballot five years ago, they suffered a massive defeat. But that doesn't mean the legislature is pro-tenant. Every day, real estate lobbyists in Sacramento have their ear -- as they spread misinformation and scare tactics about common sense, pro-tenant legislation.
Which is why a Lobby Day by Tenants Together on Tuesday, May 7 to pass SB 603 (security deposit reform) is so unusual. For the first time in over a decade, dozens of tenants from throughout California will swarm the State Capitol -- meeting with legislators about the security deposit crisis, and demanding change. And the Senate Judiciary Committee will be voting on SB 603 that same afternoon.
Every year, California landlords hold billions of dollars of security deposit money. For many tenants, it is their largest asset -- and yet most never expect to see it back, assuming that it's merely a "cost" of renting a new apartment.
A Tenants Together survey found that nearly 60 percent of its members reported having their security deposit unfairly withheld. Most tenants did not bother to proceed with suing their landlord in small claims court. And while a new report of three courthouses found that tenants prevail in 70 percent of such cases, a miniscule number of landlords -- only 3.5 percent of cases -- were hit with penalties.
In other words, landlords have impunity to steal your security deposit -- knowing that tenants are not likely to sue, and if they do they would simply be required to pay it back (with no penalties) a few months later.
Senate Bill 603 by State Senator Mark Leno would do three things: (a) require landlords to keep tenant deposits in separate accounts, not comingled with their assets, (b) impose automatic penalties against landlords who fail to return deposits and (c) require that landlords pay tenants interest on security deposits, as is the law in many local jurisdictions and a statewide requirement in many other states.
SB 603 is a very modest proposal to better secure money that tenants are required to give to their landlords -- but we expect a vigorous fight from the landlord and real estate lobby, who are used to always getting their way in Sacramento. Tomorrow's Lobby Day will feature the human side of the issue -- with tenants from across the state who will meet with State Senators and their staff, highlighting this issue.