As we move into 2025, California rental laws are once again evolving—bringing important updates that property owners in Merced must be aware of. From security deposit limits and rent control adjustments to enhanced tenant protections and lease agreement requirements, these changes could significantly impact how you manage your rental properties. For Merced landlords, staying informed about these legislative shifts isn’t just a best practice—it’s essential for compliance, risk management, and maintaining positive landlord-tenant relationships.
At Chosen Property Management, we’re here to help you navigate the complex rental housing industry and ensure your residential rental properties are fully compliant with California law in 2025.
Key Takeaways for Merced Landlords in 2025
Security deposit limits are now capped at one month's rent for most residential rental properties, with higher limits allowed for small, non-corporate landlords.
Positive rental payment reporting becomes a stronger tenant protection, requiring landlords to offer this service under certain conditions.
New lock change protections apply for victims of domestic violence and household members, reinforcing safety measures.
Rent control laws are expanding locally, and landlords need to verify how local rent control laws apply to their properties in Merced.
Exterior elevated element inspections (like balconies) are mandatory for certain multifamily dwelling units, ensuring structural safety compliance.
Security Deposit Limits: Major Overhaul in 2025
One of the most significant updates for California landlords in 2025 is the change to security deposit limits. Under the new security deposit law, most residential rental properties are now restricted to charging no more than one month's rent as a deposit. However, non-corporate landlords—those who own fewer than two residential rental properties or no more than four dwelling units—can still charge up to two months' rent as a deposit.
For Merced property owners, this means reevaluating advertised security deposits for upcoming rental agreements and existing leases. It's essential to adjust your lease templates and ensure your itemized statements for security deposit deductions align with the actual costs incurred for repairs, cleaning, or unpaid rent.
Positive Rental Payment Reporting: A New Mandate for Landlords
Starting in 2025, landlords in Merced must offer tenants the option to have positive rental payment information reported to a nationwide consumer reporting agency. This change aims to assist tenants in building credit history through timely rent payments.
While participation is optional for tenants, property owners must notify them of this option in writing. The landlord's established screening criteria must also reflect whether rent reporting is a factor in evaluating prospective tenants.
For property management companies and real estate brokers, incorporating positive rental payment reporting into your tenant communication processes will be vital for compliance.
Rent Control Expansions & Local Ordinances in Merced
Though California’s Tenant Protection Act already imposes statewide rent caps, 2025 is seeing a surge in local rent control laws tailored to individual cities—including Merced. These ordinances may impose stricter rent increase limits than state laws, especially for multifamily dwelling units and older residential rental buildings.
Merced landlords should stay updated on local measures affecting rent control, including annual adjustments tied to the Consumer Price Index (CPI). It's critical to understand whether your property qualifies as an exempt single-family home or falls under broader rental housing industry regulations.
Eviction Process Updates: Additional Rental Protections for Tenants
The eviction process in California is undergoing further changes in 2025, providing additional rental protections for tenants facing unlawful detainer complaints. Landlords are now required to offer tenants a chance to rectify lease violations before filing for eviction, except in cases involving threats to health and safety.
Moreover, courts will require more comprehensive documentation for tenant disputes—meaning property owners must maintain thorough records of all lease violations, payment history, and communication attempts before initiating eviction proceedings.
If a landlord fails to adhere to these procedures, courts may dismiss the eviction case, causing delays and potential financial loss.
Lock Change Protections for Vulnerable Tenants
California’s new lock change protections now extend to household members and immediate family of tenants who are victims of domestic violence, stalking, or sexual assault. Upon written request and appropriate documentation, property owners must provide a lock change within 24 to 48 hours.
This applies to most residential rental units, including single-family homes and multifamily properties. For Merced landlords, updating lease agreement terms to reflect this legal obligation is essential.
Balcony Inspections & Structural Safety for Multifamily Properties
The Exterior Elevated Elements (EEE) law continues to impact California landlords in 2025, especially those owning multifamily dwelling units. Regular inspections of balconies, decks, and other exterior elevated elements are now mandatory for buildings with three or more units. Inspections must be performed by a qualified professional, with findings submitted to local authorities.
This law aims to prevent structural failures and enforce compliance through fines if property owners neglect inspection requirements. For Merced landlords, it’s crucial to schedule inspections promptly and document all maintenance and repair efforts.
Fair Housing Laws: Stronger Anti-Discrimination Measures
2025 also brings expanded fair housing laws to ensure landlords do not discriminate against tenants based on immigration status or service member affiliation. Rental applications and screening processes must avoid questions that could result in discriminatory practices.
Additionally, landlords must provide rental agreements in multiple languages upon request to accommodate non-English-speaking tenants, ensuring transparency and fairness in lease terms.
Lease Agreement Transparency & Security Deposit Deductions
Transparency is a key theme in the 2025 updates, with stricter rules on disclosing security deposit deductions and lease agreement terms. Landlords are now required to provide detailed, itemized statements outlining deductions for cleaning, damages, and unpaid rent. Charges for professional cleaning services must be reasonable and reflect the actual cost incurred.
For property management teams in Merced, reviewing lease templates and adjusting move-out procedures will help avoid disputes and ensure compliance with these new transparency standards.
How Chosen Property Management Helps Merced Landlords Stay Compliant
Navigating California’s rental laws can feel overwhelming, especially with new legislation rolling out each year. That’s where Chosen Property Management steps in. We assist property owners across Merced with:
Updating lease agreements and screening criteria to meet 2025 legal standards.
Managing rent control compliance and annual rent increase limits.
Ensuring timely balcony inspections and maintenance scheduling.
Offering tenants positive rental payment reporting options.
Handling eviction processes with full documentation and legal precision.
Advising on lock change protections and safety obligations.
Our expertise in real estate, property management, and local rental laws ensures your investment stays protected while providing a positive experience for your tenants.
Stay Ahead of 2025 California Rental Laws With Chosen Property Management
As a Merced property owner, adapting to these 2025 California rental laws isn’t just about compliance—it’s about securing long-term success in a competitive rental market. With Chosen Property Management by your side, you’ll gain a trusted partner who keeps you informed, compliant, and profitable.
Visit Chosen Property Management today to learn how we can help you navigate the evolving landscape of California rental laws and streamline your property management needs.
