Executive Summary
New York and California are the regulatory capitals of US Housing. For 2026, NY strictly caps deposits at 1 month, while CA has expanded "Just Cause" eviction protections. This guide compares their rules on Rent Control, Notices, and Deposits side-by-side.
If you can manage property in California or New York, you can manage property anywhere. These two coastal giants represent the most regulated, tenant-protective housing markets in the United States. For landlords, the margin for error is effectively zero. A single misstep in a lease clause or an eviction notice can lead to months of litigation and tens of thousands of dollars in fines.
While both states trend towards strong tenant rights, the specifics of their State Statutes differ significantly. In this guide, we'll perform a side-by-side comparison of the critical regulations you must master in 2026.
1. Security Deposit Limits and Deadlines
Historically, landlords collected "First, Last, and Security" upfront. In both CA and NY, those days are largely gone.
New York (HSTPA of 2019)
The Limit: Strictly capped at one month's rent. You cannot collect "last month's rent" upfront in addition to a security deposit. It is simply one month security + first month rent.
The Return: You must return the deposit (less itemized deductions) within 14 days of the tenant vacating. If you miss this window, you forfeit the right to keep any of the deposit.
California (AB 12 Updates)
The Limit: As of mid-2024 legislation effective in 2026, landlords can generally charge no more than one month's rent for unfurnished units (exceptions exist for certain small landlords, allowing up to two months, but check the latest statutes carefully).
The Return: You have 21 days to return the funds or an itemized list. If deductions exceed $125, you must include copies of invoices/receipts.
The Takeaway: New York is stricter on timelines (14 days), while California requires more detailed paperwork (invoices). Our Document Manager includes logic to prompt you on these specific deadlines.
2. Rent Control and Rent Caps
Both states have implemented statewide rent caps, preventing massive hikes even in non-rent-controlled cities.
California (AB 1482 - Tenant Protection Act)
Most properties aged 15 years or older are subject to a strict cap: 5% + local CPI (Consumer Price Index), usually totaling no more than 10% annually.
Exemptions: Single-family homes owned by individuals (not REITs/LLCs) are often exempt if specific notice is given in the lease.
New York (Good Cause Eviction & HSTPA)
While strict "Rent Control" applies to older buildings, newer "Good Cause" legislation is sweeping the state. Even in market-rate apartments, raising rent "unreasonably" (often defined as >3-5% or >1.5x CPI) can be challenged in court as a constructive eviction.
De-Regulation: It is now virtually impossible to "de-regulate" a rent-stabilized unit in NYC, even after a tenant leaves or significant renovations are done (IAIs/MCIs are capped).
3. "Just Cause" Eviction Protections
In most of the US, you can simply choose not to renew a lease. In CA and NY, that right is eroding.
California
If a tenant has lived there for 12+ months, you need "Just Cause" to terminate the tenancy.
At-Fault Just Cause: Non-payment, breach of lease, criminal activity.
No-Fault Just Cause: Owner move-in, major remodel, or taking the unit off the market. Crucially, if you evict for "No-Fault," you usually must pay the tenant a relocation fee equal to one month's rent.
New York
NYC has long had strong protections, but statewide "Good Cause" laws are expanding. Essentially, if a tenant pays rent and follows the lease, they have a right to a lease renewal. You cannot simply non-renew because you "want fresh blood" or want to raise the rent significantly.
4. Late Fees and Grace Periods
New York: Late fees are capped at the lesser of $50 or 5% of the rent. You generally cannot charge a fee until the rent is 5 days late.
California: Late fees must be "reasonable" (related to actual cost incurred by the landlord). While there is no hard statutory cap like NY, courts often strike down fees exceeding 6-10%. Late fees cannot be deducted from the rent payment itself (i.e., you cannot claim rent is unpaid just because they didn't pay the fee).
5. Broker Fees and Application Fees
New York: This is a battleground. Application fees are strictly capped at $20 (to cover background checks). The battle over who pays the broker fee (landlord vs. tenant) shifts frequently based on DOS rulings and court cases, but the trend is shifting towards landlords paying for their own agents.
California: Application fees are capped (adjusted annually by CPI, roughly ~$59 in 2026). Landlords must provide a copy of the credit report if requested.
Drafting a Lease for These States
Given these massive differences, using a "Standard US Lease" in California or New York is legal suicide. Your lease must explicitly address:
- CA: AB 1482 Exemption language (if applicable), Bed Bug Notices, Megan's Law Database Notice.
- NY: Sprinkler System Disclosures, Stove Knob Covers (NYC), Window Guard Notices, and specific rider regarding Security Deposit location.
A generic template will miss these mandatory disclosures. Our State-Specific Lease Builder is designed to handle this. When you select "California" or "New York," the tool automatically injects the required statutory language for that jurisdiction.
Conclusion
Investing in CA or NY can be incredibly lucrative due to high appreciation and strong demand. However, it requires a higher level of professionalism. You are not just a landlord; you are a housing provider in a highly regulated utility sector.
Stay compliant. Keep your paperwork flawless. Know your statutes.
Building a portfolio in CA or NY? Draft Your State-Compliant Lease Now.