Southern California Landlord Faces Allegations of Unlawful Security Deposit Retention

Southern California Landlord Faces Allegations of Unlawful Security Deposit Retention

A corporate landlord that owns apartment complexes in Southern California was accused of illegally withholding security deposits from tenants and ordered to pay back funds in a settlement.

The case involved Arnel Management Company which owns 19 apartment complexes throughout Los Angeles and Orange counties, according to the California Attorney General’s Office.

The company is accused of automatically deducting preset cleaning charges from renters’ security deposits which violates California law, officials said.

An investigation revealed that the fees were being deducted regardless of the apartment’s condition. Tenants could only avoid the preset cleaning fees by having their units professionally cleaned when they moved out.

In accordance with the settlement deal made public on Friday, Arnel will reimburse renters for more than $1 million in addition to:

  • An extra $500,000 in civil fines
  • $650,000 that will be donated to legal assistance organizations in Orange and Los Angeles counties that support tenants’ rights
  • Be forbidden from asking a tenant to make repairs for any damage or flaws that existed before the tenancy or came from normal wear and tear.
  • Be forbidden from deducting any amount from a security deposit or treating any portion of it as nonrefundable. Examples of such deductions and fees include standard cleaning, painting, and carpet cleaning costs, as well as any other standard fees or deductions unrelated to the state of the unit.
  • Be obliged to give tenants explicit notice of their rights
  • Be forced to provide written responses to tenant complaints and provide evidence of security deposit reductions in the form of photos.
  • Concerning its practices of withholding security deposits, Arnel had already settled similar claims in 2001.

The A.G.’s office claims that withholding cleaning costs from a security deposit is only permitted by state law in situations when the apartment is not returned to the same degree of cleanliness as when the renter moved in.

Landlords are not allowed to withhold costs for fixing typical wear and tear from renters who clean the apartment on their own.

In order to uncover any problems and give them an opportunity to address them and prevent losing their security deposit, tenants can also request that their landlord inspect their apartment before they vacate.