California Landlord Faces $19.25 Million Settlement Over Tenants’ Security Deposits
A $19.25 million settlement has just been announced (October 20th) and awaits court approval in a class action lawsuit between Essex Property Trust and former tenants who claimed that the company withheld security deposits in violation of state laws. According to the Times of San Diego, the former tenants also claimed that they were charged for work performed by third-party contractors without receiving invoices.
One man said that he was charged almost $2,000 by Essex, but when he received an invoice directly from the contractor, he found that the actual fee was just $907. Other tenants said that they had been charged for work that was never performed.
The cash payout is only part of the story, though. According to one of the attorneys who worked on the case, Essex will also forgive $8.7 million in turnover debt for tenants.
“To its credit, Essex has also committed to lasting, court-enforceable improvements across its roughly 49,600 California apartment homes: vendor invoices in every move-out package, vendor discounts passed through to tenants, and regular training on Civil Code section 1950.5,” Jeffrey Hogue and Tyler Belong’s office said in a statement to the outlet.
Tenants Accused One of California’s Largest Property Management Companies of Violations
The lawsuit was filed in San Diego County on Sept. 27, 2022, according to court records. Notably, San Diego County is where the Times of San Diego estimates Essex owns 5,311 apartment units. The lawsuit alleges that the company was in violation of California Civil Code Section 1950.5 and Business and Professions Code Section 17200 et seq.
Some of the complaints included in the lawsuit involve inflated work orders and charges for services that were never warranted. One tenant in the Form 15 apartment complex said she was charged for a carpet cleaning service after moving out of her home, even though the floor consisted of nothing more than a concrete slab.
One of the attorneys involved in the class-action lawsuit called the settlement a major win. “This agreement would return money and provide debt relief to more than 200,000 former Essex Property Trust tenants,” Jimmie Davis Parker said in a statement to the outlet. “Those renters represent only a small fraction of the Californians vulnerable to having their security deposits improperly withheld. Challenging an improper deduction individually can cost more than the amount at stake, giving powerful landlords an unfair advantage.”
Attorneys Say This May Have Long-Lasting Benefits for Californians
In another part of the statement, Parker’s co-counsel explained why the settlement was a win for the state as a whole, saying the settlement terms could bring “$40 million to $83 million in turnover charges into compliance over the next decade and protect some 400,000 future departing tenants.”
As for the representatives for Essex, they also sent a statement to the outlet, saying that the company denies any wrongdoing, “but recognizes the risks, expense, and uncertainty of continued litigation.”
Tenants who are worried about their rights as renters should reach out to one of the state’s many legal aid and advocacy centers, including the Housing Rights Center or Tenants Together.
