Pasadena Security Deposit rules for 2024-2025

In late 2023, the Pasadena Rental Housing Board created an annual interest rate required to be paid to rental tenants on their security deposits held by property owners or management companies.

In summary:

Interest of 0.41% must be paid for the year 2024 to all tenants by January 31, 2025. This can be a credit towards rent or a payment made to tenants. At Pasadena Landlord Guide, we highly recommend a check paid to each tenant to simplify the process and clarify that this is not a reduction in rent.

Starting July 1, 2024, security deposits across the state of California are limited to no more than one month’s rent unless you fit the definition of a ‘small landlord’ as detailed in this file from the State Justice Department

You can read more about the initial deposit rules set in 2023 here:

https://www.pasadenalandlordguide.com/blog/pasadena-security-deposit-law-2023

The Director of the Rental Stabilization Department (RSD) created a chart that she used to interpret the rules in Measure H in favor of tenants. By selecting ONLY the highest 5 interest rates at banks in Pasadena, the board approved a security deposit rate of 0.12% for 2025. This is in conflict with how Measure H is written and omits the lower interest rates at Chase and City National banks along with 20+ banks with branches in Pasadena.

Measure H Rules for Security Deposits 

Report from Dr. Helen Morales, Department  head of Pasadena Rental Stabilization Department

The chart below summarizes the annual interest rate payment required since the rules were adopted in 2023.