Legal Question in Real Estate Law in California

Security deposits for residential rentals and leases are covered by Civil Code section 1950.5. The maximum allowable is an amount equivalent to two months' rent for an unfurnished property and three months' rent for a furnished property. The law distinguishes between a security deposit, which is not rent, and rental in advance, which is rent.

Mr. Whipple is correct. I would add, however, that prepaid rent in excess of first and last month has been held to be a security deposit in court cases. So, for example, if a landlord required a two-month's rent deposit, first two months of rent, and the last month's rent upfront that would constitute 3-mos. security deposit and would be illegal.