In California, can landlords take money out of a security deposit for a "cleaning fee"

Question

After doing some cursory research I've read that landlords cannot deduct damages for "normal wear and tear" from their tenants'. Does a "cleaning fee" that was stated in the rental agreement violate this law?

Answer 1

Short Answer

Does a "cleaning fee" that was stated in the rental agreement violate this law?

This question does not clearly enough describe the term in the rental agreement to provide an accurate answer.

A cleaning fee that is taken out of a security deposit in all circumstances, without regard to how clean it is at the termination of the tenancy (if actually enforced), is probably prohibited, although this isn't absolutely clear beyond all question.

But, if the rental agreement provides that it is only due when needed because the premises need to be cleaned (or is enforced in that manner even if the lease says otherwise), then the rental agreement would most likely be construed as a reasonable contractual agreement to establish what constitutes "reasonable wear and tear" in advance of an actual dispute over that issue, and to establish in advance what a reasonable cost was for very specific items in advance to provide greater predictability and lower litigation costs to both parties.

Also, an upfront cleaning fee collection in all cases that does not come out of a security deposit appears to be permitted.

Analysis

Several cases address the issue.

One holds that the "statutory definition of security does not include legitimate rent and in determining characterization of payment as security or legitimate rent trier of fact must look to various factors including facts and circumstances of each particular case." Granberry v. Islay Investments, 207 Cal. Rptr. 652 (Cal. App. 1984) (note that this is not the same case as the California Supreme Court case involving the same parties cited below by one of the cases quoted).

Another recent case holds that an upfront cleaning fee imposed in every case is permitted.

Defendants contend that the TIER fee is not an unrefundable security fee prohibited by Civil Code section 1950.5. Civil Code section 1950.5 now provides in relevant part:

“(a) This section applies to security for a rental agreement for residential property that is used as the dwelling of the tenant.

“(b) As used in this section, ‘security’ means any payment, fee, deposit or charge, including, but not limited to, an advance payment of rent, used or to be used for any purpose, including, but not limited to, any of the following:

“(1) The compensation of a landlord for a tenant's default in the payment of rent.

“(2) The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant.

“(3) The cleaning of the premises upon termination of the tenancy.

“(4) To remedy future defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement.”

Subdivision (e) provides that “[t]he landlord may claim of the security only those amounts as reasonably necessary for the purposes specified in subdivision (b). The landlord may not assert a claim against the tenant or the security for damages to the premises or any defective conditions that preexisted the tenancy, for ordinary wear and tear or the effects thereof, whether the wear and tear preexisted the tenancy or occurred during the tenancy, or for the cumulative effects of ordinary wear and tear occurring during any one or more tenancies.”

When Civil Code section 1950.5 was enacted in 1977, and until a 1986 amendment (Stats.1986, ch. 564, § 1, p.1991), subdivision (e) limited use of a security fee to “such amounts as are reasonably necessary to remedy tenant defaults in the payment of rent, to repair damages to the premises caused by the tenant, exclusive of ordinary wear and tear, or to clean such premises, if necessary, upon termination of the tenancy.”

The $100 TIER fee was collected from every new tenant by Trinity Management Services, Inc. The fee is usually collected when the tenant signs a standard form lease. The lease imposes an obligation to pay the fee before occupying the premises. Upon payment the tenant receives a “Receipt and Agreement for Tenancy Initiation Expense Reimbursement” from the landlord. Unlike the Court of Appeal here and in Parkmerced, we do not find subdivision (e) of Civil Code section 1950.5, which specifies the uses to which a security may be put by a landlord, useful in determining whether the TIER fee is a security. Subdivision (b) (set out, ante ) defines the term and, while it provides that its examples of securities are not exclusive, it supports a conclusion that a security fee paid by a tenant to a landlord is an amount intended to offset expenses incurred by the landlord as a result of tenant conduct during the tenancy. It does not encompass the TIER fee that the trial court included in the restitution order made here.

We begin, as we must, with the term “security.” “We interpret statutory language according to its usual and ordinary import, keeping in mind the apparent purpose of the statute. When no ambiguity appears, we give statutory terms their plain meaning.

Excluding meanings for the noun “security” that are irrelevant in this context, the term means “something given, deposited, or pledged to make certain the fulfillment of an obligation.” (Webster's 9th New Collegiate Dict. (1989) p. 1062.) Every example of a security given in subdivision (b) of Civil Code section 1950.5 is consistent with this ordinary meaning of the word.

The parties and the Parkmerced court assume that because the TIER charge is a fee it must be a “security” within the definition of security given in subdivision (b) of Civil Code section 1950.5. It is apparent, however, that the Legislature included the terms “payment, fee, deposit or charge” in the definition to ensure that a landlord would not be able to use those or similar terms rather than “security” for a charge and thereby avoid the prohibition of nonrefundable securities and the limits placed on the use of a security by that statute. Application of the principle of ejusdem generis and consideration of the remainder of the statute compels that conclusion. “Ejusdem generis applies whether specific words follow general words in a statute or vice versa. In either event, the general term or category is ‘restricted to those things that are similar to those which are enumerated specifically.’” The canon presumes that if the Legislature intends a general word to be used in its unrestricted sense, it does not also offer as examples peculiar things or classes of things since those descriptions then would be surplusage.

All of the examples of a security set forth in subdivision (b) of Civil Code section 1950.5 are charges intended to secure the landlord against future tenant defaults. Subdivision (e) specifies the only uses to which such fees may be put by the landlord, again confirming that the “fee, deposit, or charge” which may be a security within the subdivision (b) definition is one held by the landlord to ensure reimbursement for future tenant defaults. This is confirmed by section 1950.5, subdivision (d), which provides that the landlord holds a security for the tenant, by subdivision (f), which imposes a duty on the landlord to notify a tenant who has vacated the premises of the amount and disposition of the security and to return any remaining portion, and by subdivision (l ), which prohibits a nonrefundable security. Reading the statute as a whole thus confirms that even though a security is not limited to the examples set out in subdivision (b) of Civil Code section 1950.5, a security is limited to charges imposed to secure the landlord against future tenant defaults. A fee imposed at the outset of the tenancy to reimburse the landlord for expenses incurred for such purposes as providing application forms, listing, interviewing, screening the applicant, for checking credit references, and for similar purposes is not a security governed by the provisions of that section.

Kraus v. Trinity Mgt. Services, Inc., 999 P.2d 718, 733–35 (Cal. 2000) (some holdings of this case that are not applicable to this issue subsequently superseded by statute) (some citations omitted).

This case also notes that from 1977 to 1986, cleaning fees could only be deducted from a security deposit if cleaning was "needed" at the termination of a tenancy. It isn't entirely clear of the "as needed" qualification survived the 1986 amendment and there are fair readings of the statute that go either way. On one hand, the "as needed" language was replaced with more general language that could be taken to mean the same thing as the old language. On the other hand, the removal of the "as needed" language from the statute could be interpreted as changing prior law as to cleaning fees even though the prior law was not changed as to other kinds of damage charges.

There is also a relevant unpublished case that that does not establish binding precedent on the issue that strongly implies that automatic deductions from security deposits for cleaning fees at the termination of a lease are prohibited if that lease provision is actually enforced.

Jason Reynolds, Brittany Lundquist, and David Pherrin (collectively plaintiffs) filed a class action lawsuit against Shea Properties Management Company, Inc. (Shea). Plaintiffs allege that Shea improperly deducts fees for cleaning and painting from tenants' security deposits after tenants vacate their apartments. Plaintiffs allege that the fees are improper because they are governed by policies requiring that the tenant be charged for (1) all cleaning costs and (2) some or all painting costs depending solely on the duration of the tenancy rather than on an assessment of the actual condition of the paint. Plaintiffs appeal from the denial of their motion for class certification.

Plaintiffs contend that common issues predominate with respect to their claims because Shea's policies render the deductions from tenants' security deposits unlawful. But Shea introduced evidence showing, among other things, that Shea did conduct individualized assessments of each unit with respect to both cleaning and painting, that Shea did not charge for all cleaning costs, and that Shea did not charge for painting solely on the basis of the duration of the tenancy. We conclude that plaintiffs have shown no abuse of discretion, and we therefore affirm the order denying class certification.

Reynolds v. Shea Properties Mgt. Co., Inc., B268949, 2017 WL 4769384, at *1 (Cal. App. Oct. 23, 2017) (not published, not citable).

This recent case didn't reach this issue on the merits and merely denied class certification of the issue. But, it strongly implied that automatically deducting a cleaning fee from a security deposit was not allowed if it is actually enforced, stating (in this non-precedent creating case) that:

To establish liability based on a violation of section 1950.5, plaintiffs must prove that the amount deducted from the tenant's security deposit exceeded the amount reasonably necessary for the specified purposes. (See Granberry v. Islay Investments (1995) 9 Cal.4th 738, 744–745.) Whether a deduction for cleaning or painting was excessive under the statute depends on the condition of the unit at the beginning of the tenancy, its condition at the end of the tenancy, the extent of ordinary wear and tear, and the amount of the cleaning or painting fee charged. The condition of the unit at the beginning and end of the tenancy may differ for each unit. The extent of ordinary wear and tear may differ depending on the length of the tenancy.

Plaintiffs argue that common questions predominate because Shea's written policies were unlawful and applied to all of Shea's tenants. As regards painting, plaintiffs argue that “Shea's policy applicable to all class members was to charge ‘based on length of residency,’ and to strictly impose its rate schedule based on length of residency whenever an outside vendor was used to paint.... No consideration whatsoever was given to wear and tear by Shea's policies when charging for painting. Shea's tenants are charged out of their security deposit for painting whenever a third party is used, ‘regardless of what that damage is.’ ”

Although Shea's written policies provide some support for some of plaintiffs' assertions, the record contains substantial evidence that contradicts all of them. Shea introduced evidence that it did not “strictly impose its rate schedule based on length of residency whenever an outside vendor was used to paint.” Rather, Shea individually assessed the condition of the paint in each unit and, when possible, used its in-house personnel to do touch-up painting, which was usually sufficient to deal with ordinary wear and tear in any tenancy of two years or less (and the schedule itself called for no painting charge after two years); tenants were not charged for painting done by Shea's in-house personnel. When Shea did use an outside vendor, it did not always charge the tenant the full percentage specified in the written policy and sometimes waived the charge altogether. In addition, when Shea did use an outside vendor, it would sometimes contract for a “full paint” but sometimes only for a “partial paint,” depending on the condition of the unit. In sum, the record contains substantial evidence that Shea did not rigidly adhere to a percentage schedule for painting charges based on length of tenancy alone. Because the record contains substantial evidence supporting the negation of all of the factual premises on which plaintiffs' argument is based, we cannot conclude that the trial court abused its discretion by rejecting plaintiffs' position. Consequently, the court did not abuse its discretion by determining that Shea's written policies concerning painting charges do not present a common question as to liability. Insofar as the written policies suggest an unlawful type of uniformity in charging tenants for painting (“strictly ... based on length of residency whenever an outside vendor was used”), the evidence shows that Shea's actual practices did not conform to the policies, were based on individual assessments of each unit, and do not present a common question of liability.

Plaintiffs raise a parallel argument concerning cleaning charges: “Shea's policy is to ‘always' charge from the security deposit any time an outside vendor is used.... The schedule charged is a flat rate based solely on size of the unit, i.e., how many bedrooms.... No consideration was given of the condition of the property when the tenant moved, the tenant['s] efforts to clean, how dirty it is, or how long it takes to clean.” The argument is meritless for parallel reasons: Section 1950.5 allows the tenant to be charged for the reasonable cost of restoring the unit to the level of cleanliness it was in at the start of the tenancy. The record contains substantial evidence (and common sense confirms) that tenants rarely leave a unit as clean as they found it. Thus, in the overwhelming majority of cases, section 1950.5 would allow Shea to hire a vendor to restore the unit to its pre-tenancy state of cleanliness, and Shea could lawfully charge the tenant the reasonable cost of doing so. The record contains substantial evidence that in numerous respects Shea's actual practices were not as described by plaintiffs and were more favorable to tenants than section 1950.5 requires. The record contains substantial evidence that Shea individually assessed each unit, did not charge for cleaning by in-house personnel, did not always charge for cleaning by outside vendors, and in particular did not charge as long as the tenant made a reasonable effort to clean. Again, insofar as the written policies suggest an unlawful type of uniformity in charging tenants for cleaning (“ ‘always' charge ... any time an outside vendor is used,” and give “[n]o consideration” to “the tenant['s] efforts to clean”), the evidence shows that Shea's actual practices did not conform to the policies, were based on individual assessments of each unit, and do not present a common question of liability.

Reynolds v. Shea Properties Mgt. Co., Inc., B268949, 2017 WL 4769384, at *5–6 (Cal. App. Oct. 23, 2017) (not published, not citable) (some citations omitted).

I could imagine a case addressing this issue in a published decision departing from Reynolds in one of two different ways.

On one hand, another court issuing a published decision could rule that a lease with a facially impermissible automatic deduction for cleaning fees from a security deposit language had to be reformed in every case to legally permissible language, even if the lease was not actually enforced as written.

On the other hand, another court issuing a published decision could rule that an amount due from every single tenant at the close of a lease, even if it might be called a "cleaning fee", is, in substance, not a cleaning fee after all, and instead is simply additional rent. Moreover, even if calling it a "cleaning fee" was not allowed, the law wouldn't necessarily prohibit the landlord from increasing the rent for a final month by $100 or something like that, if the charge was called rent and was due as part of the final month's rent payment rather than deducted from the security deposit.

Answer 2

No, a "cleaning fee" in the rental agreement does not violate the law.

Wear and tear covers the damage done to object due to normal use of them over time. Carpet naturally wears out as it's walked on normally, and refrigerator compressors naturally wear out as the appliance is used normally. Your landlord cannot charge you for items like a clean, but old and worn out, carpet, or for a burned out compressor (assuming you didn't cause the damage by leaving the fridge door open.)

Stains on carpet are not caused by normal use, nor is a refrigerator made dirty through normal use. These are cause by someone being careless and making a mess, and can be covered by a cleaning fee.