Corporate Landlord That Illegally Withheld Deposits Must Repay Tenants

Corporate Landlord That Illegally Withheld Deposits Must Repay Tenants

South Pointe Apartments on Baker Street in Costa Mesa, Calif., run by Arnel Management, in March 2023. (Google Maps/Screenshot via California Insider)

Rudy Blalock
Rudy Blalock


Updated: 4/8/2024


A corporate landlord in Southern California was ordered to pay tenants back for security deposits it was accused of illegally withholding, thanks to a settlement agreement, according to the California Attorney General’s Office in a March 29 press release.
Arnel Management Company, which owns 19 apartment complexes in Los Angeles and Orange counties, is accused of automatically deducting pre-set cleaning charges from security deposits, in violation of California law and an existing injunction against the company.
“For many renters, especially those from lower-income backgrounds, affording a security deposit entails a great deal of sacrifice. We are holding Arnel accountable because, in some cases, the company failed to return to tenants the entire security deposit that they were legally entitled to and worked hard to save up for,” said Attorney General Rob Bonta in the press release.
The company reached a separate settlement in 2001 with the attorney general’s office for security deposit withholding practices, according to the press release. The new settlement will replace and refine the terms of the earlier judgement.
In the investigation, it was revealed that in some buildings the company was deducting pre-set cleaning fees without considering the condition of the unit, and would waive the fees only for units that were cleaned by professionals at the tenant’s expense, the press release reads.
Under the settlement, Arnel is required to pay $500,000 in additional civil penalties and $650,000 to tenant rights-related legal aid organizations in the two counties.
Arnel is also prohibited from asking tenants to repair any pre-existing damages when they move out or anything considered ordinary wear and tear. The company also cannot charge pre-set fees for services like cleaning or painting that are not tied to the condition of the unit.
Arnel must provide tenants with a clear notice of their rights, respond to complaints in writing, and provide pictures to support any security deposit deductions.

Rudy Blalock is a Southern California-based daily news reporter for The Epoch Times. Originally from Michigan, he moved to California in 2017, and the sunshine and ocean have kept him here since. In his free time, he may be found underwater scuba diving, on top of a mountain hiking or snowboarding—or at home meditating, which helps fuel his active lifestyle.

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