How New Rules On Deposits, Fees, and Evictions Are Rebalancing U.S. Rentals

Why deposits and fees are under scrutiny now

Security deposits and rental fees have always been part of the cost of housing, but they’ve become flash points as rent burdens climb and more renters struggle with move-in costs. A Newsweek story about a Houston landlord returning a full deposit after a clean move-out highlights a common frustration: she says that in five years as a renter she never once received any portion of her own deposits back, despite not damaging her units.

Her experience sits against a backdrop of rising rent burdens. Harvard’s Joint Center for Housing Studies reports a record number of cost-burdened renters, with more than 22 million households spending over 30% of their income on housing and utilities, and over 12 million spending more than half. [jchs.harvard.edu] In that environment, large lump-sum deposits, nonrefundable fees, and surprise charges can make the difference between securing a home and staying sidelined.

At the same time, add-on costs beyond advertised rent — like application fees, “amenity” charges, or broker commissions — make it harder to compare listings and budget accurately. NerdWallet notes that even as national rent growth has cooled from pandemic peaks, asking rents have continued to outpace overall inflation in recent data, leaving renters sensitive to any extra dollars layered on top. [nerdwallet.com]

Security deposit reforms: spreading payments and tightening refund rules

One response is to tackle security deposits directly. In Philadelphia, city lawmakers have advanced a measure that would allow renters to pay deposits in installments rather than as a single lump sum before move-in. The proposal also gives renters more flexibility to choose alternative forms of security, such as deposit insurance or surety products, subject to disclosure and consumer protection standards. [whyy.org]

The basic idea is straightforward: if a tenant doesn’t have to come up with one or two months’ rent upfront, they’re more likely to qualify for safe, stable housing, especially in higher-rent markets. Spreading payments over several months can also reduce the temptation for landlords to rely on hefty deposits as a substitute for careful screening or clear move-out expectations.

In Oregon, a brief from the Oregon Capital Chronicle describes a proposal aimed at a different weak spot in the system: defective units. Under the bill, if a rental applicant pays a deposit and then discovers that the home has serious defects — for example, health or safety issues that weren’t apparent at first viewing — the owner would have to refund the deposit or pay a set fee to the applicant. [oregoncapitalchronicle.com] That shifts some of the risk of poor unit conditions away from renters, who today may lose deposits or application money even when they walk away from unsafe housing.

These changes sit alongside a quieter but important cultural shift. The Houston investor highlighted by Newsweek views routine cleaning, repainting, and minor wear-and-tear as the landlord’s responsibility and not a reason to keep a deposit. As more jurisdictions clarify definitions of “normal wear and tear” and require itemized statements for any deductions, it becomes harder for owners to treat deposits as an automatic extra month of income.

For landlords, the takeaway is to tighten documentation and communication: detailed move-in checklists, timestamped photos, written standards for deductions, and fast timelines for accounting back deposits. For renters, it underscores the value of documenting conditions and understanding local timelines for when deposits must be returned.

Crackdowns on rental junk fees and shifting broker costs

Beyond deposits, regulators are increasingly focused on so‑called “junk fees” — recurring or one‑time charges tacked onto base rent. A KPBS report describes how officials in San Diego are considering rules that would limit what kinds of fees landlords can charge in addition to rent and require that any remaining fees be clearly disclosed in advertising and lease documents. [kpbs.org] Examples include monthly pet fees, “payment portal” charges, and line items for amenities that may not be optional in practice.

The goal is more transparent pricing: if renters can compare all‑in monthly costs up front, they’re less likely to be surprised once they’ve moved in. For property owners, the likely adjustment is to shift more revenue into base rent rather than separate fees, which could change how listings look on major rental sites even if total monthly revenue doesn’t move much.

New York City is taking a more targeted approach to a big one‑time cost: broker commissions. A new law there generally requires that the party who hires the broker — typically the landlord in open-market rentals — pays the brokerage fee, rather than automatically passing it to the tenant. Realtor.com reports that this change could save renters thousands of dollars at move‑in but has also sparked debate about whether higher advertised rents will eventually offset that savings. [realtor.com]

For landlords and investors with units in broker‑heavy markets, the policy effectively converts an upfront tenant cost into an owner operating expense. That may encourage longer leases, modestly higher rents, or more direct‑from‑owner leasing to avoid commissions altogether. Small owners who rely on brokers for tenant placement will need to run the numbers on whether the service still pencils out or whether they should invest in their own leasing systems.

Eviction timelines, rental assistance, and tenant leverage

Another front for reform is the eviction process itself, particularly in cases of nonpayment of rent. A CalMatters report explains that in California, landlords can currently proceed with nonpayment evictions even when tenants are able and willing to pay all overdue rent or have rental assistance lined up. Legal aid attorneys argue that this undercuts public rental assistance programs designed to keep people housed.

The pending proposal would require courts to dismiss a nonpayment eviction if, at any point before the physical lockout, the tenant pays all rent owed or can prove approval for rental assistance in that amount. Supporters say this would align California with more than 20 states that already allow renters to “redeem” their tenancy by curing the default right up to the eve of eviction.

From a housing‑market perspective, the change would strengthen the link between emergency rental aid and actual eviction outcomes. If aid reliably prevents displacement, local governments may see better returns on those subsidies in the form of reduced shelter and homelessness costs. But it also lengthens the cash‑flow uncertainty for owners, who may wait months while assistance applications are processed and court timelines play out.

Landlord groups warn that if it becomes significantly harder to enforce timely payment, some owners may respond by tightening screening standards, requiring higher incomes or stronger credit scores, or by exiting the long‑term rental market entirely. Tenant advocates counter that many landlords already work out payment plans informally and that codifying a right to cure merely standardizes those practices.

What this means for renters, landlords, and investors

For renters, these trends point to several practical steps:

• Ask whether security deposits can be paid in installments or replaced with lower‑cost alternatives where local rules allow it.
• Request a written fee schedule that shows total monthly housing costs, including pet, parking, amenity, and portal fees.
• Before submitting a deposit, inspect the unit thoroughly, document any issues with photos or video, and confirm in writing what happens if serious defects are discovered later.
• If you fall behind on rent, research local assistance programs quickly and understand whether paying all arrears can halt an eviction under your state’s rules.

For landlords and property managers, the policy shifts are a prompt to stress‑test business models:

• Review lease templates to ensure compliance with evolving local laws on deposits, fees, and broker payments.
• Rebalance revenue between base rent and ancillary fees in a way that is transparent and defensible.
• Invest in property condition, documentation, and communication so that deposit disputes are the exception, not the norm.
• Consider offering installment deposits voluntarily, even where not required, to widen the pool of qualified applicants.

For small investors, the main lesson is that “soft” policy changes around deposits, fees, and eviction timelines can materially affect returns, even if headline rent numbers look strong. Harvard’s data on record renter cost burdens and NerdWallet’s findings on rent growth outpacing inflation suggest continuing pressure on affordability. [jchs.harvard.edu][nerdwallet.com] Investors who ignore these trends may face higher vacancy, more disputes, and greater regulatory risk than peers who adapt quickly.

Ultimately, deposit and fee reforms aren’t just paperwork tweaks. They are rebalancing who carries which risks and when money changes hands in the rental relationship. Understanding that shift is now part of doing business — and of finding, and keeping, a stable place to live.