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  1. #1

    Default Deposit Money Withheld at the End of a Commercial Lease

    My question involves landlord-tenant law in the State of: California

    Hello,

    I am writing on behalf of my mother who is in a dispute with her landlord over deposit money not returned to her at the end of her lease.

    My mother was a tenant at a commercial property up until 4 years ago when she moved out. Her landlord delayed giving my mother her deposit money back. Eventually when the landlord was pressured for the money, the landlord contended that she had a right to keep the money due to the damage to the floors at the time my mother vacated. My mother disputed the extent of the "damage" but ultimately asked for receipts from the landlord to show the cost to repair it. My mother was never provided any receipts. The two of them went back and forth on this issue and nothing definitive was agreed on.

    My mother delayed in addressing the issue and during the first year or two afterwards she did manage to get an attorney to write a letter to her demanding the deposit money. My mother received a response back from an attorney that now stated that the deposit money was taken because my mother had failed to inform her of when she was going to terminate the lease. There was no mention of the damage to the floor. This is a lie. My mother had actually informed the landlord according to the lease agreement in writing by registered mail and they shared numerous phone conversations. My mother's last day on the property coincided with the end of her lease and she dropped off the keys at the landlord's personal property. However, my mother failed to retain the copy of the certified letter mailed to the landlord so she can not prove that she mailed this letter.

    For the past couple years my mother has sporadically attempted to address this issue with the landlord but the landlord ignores her. My mother wants to have her deposit money returned to her and she is considering legal action. I am trying to help her in this matter.

    My mother's office is in Los Angeles, CA and she had heard somewhere that there might be a 4 year statue of limitations to address this matter? What is the burden of proof in this matter that would allow my mother to successfully resolve this matter? Does she have a case here?

  2. #2
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    Default Re: Deposit Money Withheld at the End of a Commercial Lease

    For a contract action, there is a statute of limitations. To recover money, your mother would need to prove that money was improperly withheld from her deposit.

    As your mother has already discussed her case with a lawyer, the best way for her to determine her chances in court is for her to reconnect with her lawyer and ask him what he thinks of her chances in court.
    Quote Quoting California Civil Code, Sec. 1950.7
    (a) Any payment or deposit of money the primary function of which is to secure the performance of a rental agreement for other than residential property or any part of the agreement, other than a payment or deposit, including an advance payment of rent, made to secure the execution of a rental agreement, shall be governed by the provisions of this section. With respect to residential property, the provisions of Section 1950.5 shall prevail.

    (b) The payment or deposit of money shall be held by the landlord for the tenant who is party to the agreement. The claim of a tenant to the payment or deposit shall be prior to the claim of any creditor of the landlord, except a trustee in bankruptcy.

    (c) The landlord may claim of the payment or deposit only those amounts as are reasonably necessary to remedy tenant defaults in the payment of rent, to repair damages to the premises caused by the tenant, or to clean the premises upon termination of the tenancy, if the payment or deposit is made for any or all of those specific purposes.

    (1) If the claim of the landlord upon the payment or deposit is only for defaults in the payment of rent and the security deposit equals no more than one month's rent plus a deposit amount clearly described as the payment of the last month's rent, then any remaining portion of the payment or deposit shall be returned to the tenant at a time as may be mutually agreed upon by landlord and tenant, but in no event later than 30 days from the date the landlord receives possession of the premises.

    (2) If the claim of the landlord upon the payment or deposit is only for defaults in the payment of rent and the security deposit exceeds the amount of one month's rent plus a deposit amount clearly described as the payment of the last month's rent, then any remaining portion of the payment or deposit in excess of an amount equal to one month's rent shall be returned to the tenant no later than two weeks after the date the landlord receives possession of the premises, with the remainder to be returned or accounted for within 30 days from the date the landlord receives possession of the premises.

    (3) If the claim of the landlord upon the payment or deposit includes amounts reasonably necessary to repair damages to the premises caused by the tenant or to clean the premises, then any remaining portion of the payment or deposit shall be returned to the tenant at a time as may be mutually agreed upon by landlord and tenant, but in no event later than 30 days from the date the landlord receives possession of the premises.

    (d) Upon termination of the landlord's interest in the unit in question, whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or the landlord's agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the payment or deposit:

    (1) Transfer the portion of the payment or deposit remaining after any lawful deductions made under subdivision (c) to the landlord's successor in interest, and thereafter notify the tenant by personal delivery or certified mail of the transfer, of any claims made against the payment or deposit, and of the transferee's name and address. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign his or her name on the landlord's copy of the notice.

    (2) Return the portion of the payment or deposit remaining after any lawful deductions made under subdivision (c) to the tenant.

    (e) Upon receipt of any portion of the payment or deposit under paragraph (1) of subdivision (d), the transferee shall have all of the rights and obligations of a landlord holding the payment or deposit with respect to the payment or deposit.

    (f) The bad faith retention by a landlord or transferee of a payment or deposit or any portion thereof, in violation of this section, may subject the landlord or the transferee to damages not to exceed two hundred dollars ($200), in addition to any actual damages.

    (g) This section is declarative of existing law and therefore operative as to all tenancies, leases, or rental agreements for other than residential property created or renewed on or after January 1, 1971.

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