SACRAMENTO – California Attorney General Rob Bonta today announced a settlement resolving allegations that Arnell Management Company (Arnell) illegally withheld security deposits from tenants in Southern California. Specifically, Arnel, a corporate landlord operating 19 apartment complexes in Orange and Los Angeles counties, automatically deducted pre-set cleaning fees from security deposits, in violation of California law and existing injunctions. I have doubts. Under the terms of today’s settlement, Arnel will pay more than $1 million and be subject to stricter injunctions to deter future illegal activity.
“California tenants have rights, and my office is committed to protecting those rights,” said Attorney General Bonta. “For many renters, especially low-income renters, paying a security deposit comes at a high cost. We are holding Arnel accountable for not repaying the tenant.”
In 2001, the California Attorney General’s Office reached a separate settlement with Arnell regarding bond withholding practices. Today’s settlement is the result of a new investigation into Arnell and replaces and improves on the terms of the 2001 judgment. A new investigation reveals that Arnel deducted pre-set cleaning fees from tenants’ security deposits in some buildings, regardless of the condition of the rooms. Tenants can avoid pre-set cleaning fees only by having their unit professionally cleaned upon move-out.
Under this settlement, Arnel will, among other things:
Pay an additional $500,000 in civil penalties. The $650,000 payment will be donated to tenant rights legal aid organizations in Orange and Los Angeles counties. Tenants may not be required to repair any damage or defective condition that existed prior to the tenancy or resulted from normal wear and tear. Imposing pre-set or predetermined deductions or treating any portion of the security deposit as non-refundable, including but not limited to charging standard cleaning fees, standard carpet cleaning fees, standard painting fees, or other standard fees; prohibited. Fees and deductions that are not related to the condition of the unit. Tenants must be clearly informed of their rights. Tenant complaints must be addressed in writing and security deposit deductions must be supported with photographs.
State law allows cleaning fees to be withheld from security deposits only if the unit is not left at the same level of cleanliness as when the tenant moved in. Tenants can clean the unit themselves, but landlords cannot deduct the cost of normal wear and tear and repairs. tear. In addition, tenants can also ask the landlord to inspect the unit to identify any problems before moving out to avoid security deposit deductions. This gives the tenant the opportunity to repair or clean the room. Earlier this year, Attorney General Bonta issued five Consumer Alerts advising California tenants of their rights and protections under state law and warning property managers and landlords of their obligations to tenants. A consumer warning regarding security deposits can be found here. Also available in Spanish, Chinese, Korean, Tagalog, and Vietnamese.
Details of the terms of the settlement and the terms requiring court approval and copies of the proposed amended judgment can be found here and here.
