No Matter What It’s Called, Deposit Is Considered Security

QUESTION: On Nov. 1, 1978, I entered into a one-year lease for a small rental house in Los Angeles. Now, I’m thinking about moving out. I read your July 7 column about last month’s rents (“Tenant Should Pay the Rent, Then Await Refund”) and it prompted a question about my last month’s rent.

Is it paid or do I owe more? I’ve enclosed copies of the original 1978 house lease and the 1980 month-to-month rental agreement that superseded it.

ANSWER: First, before answering your question, let me congratulate you on having your paperwork together. Both the original 1978 lease and 1980 agreement that you sent provide for the last month’s rent.

As we said in the July 7 column, on Jan. 1, 1978, a new law concerning security deposits was enacted providing that all money received in addition to the first month’s rent, no matter what it is called, is security deposit and subject to refund except for deductions allowed to compensate owners for unpaid rent, cleaning and damages.

Before 1978, owners who collected fees for “providing a clean apartment” or “credit checking fees” besides first month’s rents and security deposits were able to keep them. Now, all deposits are refundable unless used for lawful deductions.

Legally, especially in your case where the rent was pegged to a certain amount of money for a specific period (Nov. 1, 1980-Nov. 1, 1981) it is hard to believe that the amount deposited really was intended to cover the rent charged years later, especially since the amount of the last month’s rent already was raised from $485 in 1978 to $535 in 1980.

It is always hard to know what a small claims court judge will do at a trial, especially when an agreement says that the last month’s rent is paid in full.

Either way, under the law it appears that an advance deposit of rent, no matter what the parties call it, is security and subject to application and/or refund as provided for in the code.

Tenant Should Try to Find a New Renter

Q: I seem to recall reading in Apartment Life that if a tenant on a one-year lease wants to vacate an apartment before the lease expires, the lessor has an obligation to try to re-rent the apartment after being given notice by the renter.

I signed a one-year lease at the end of September 1995 but would like to vacate the apartment sometime in August rather than September.

What can I do to release myself from being liable for the full 12 months of the lease? Would a 30-day written notice to quit, with a return receipt requested, do it?

A: You are correct about the law requiring the owner to make reasonable efforts to re-rent the premises and the damages to you.

A 30-day notice to move, however, will not relieve you of your liability to pay rent for the entire lease term. Re-renting the apartment would do that.

According to Trevor Grimm, general counsel to the Apartment Assn. of Greater Los Angeles, you might try to sublet the apartment, with the owner’s consent, and have someone offer to re-rent it at the same rate you are now paying.

If the owner refuses to re-rent the apartment to the new tenant at the old rate, he or she may be held to have violated the duty to mitigate the damages, letting you off the hook.

Landlord Must Return Deposit in 21 Days

Q: I rent an apartment in Los Angeles and I would appreciate answers to the following questions. Since July 1994, I have had a $2,000 security deposit with the owner. I am planning to move in October.

Should I wait until I move to ask for a refund of the security deposit or can I ask for it now? Does the landlord voluntarily give the deposit back or must he be asked for it?

Also, how do I collect the interest that has accumulated on the deposit? Finally, do I have to ask him separately for this?

A: Under the law, owners must refund security deposits within 21 days after you vacate. They rarely refund them before tenants move out of rentals.

You are not required to ask for the security deposit refund or for the 5% annual simple interest due on the deposit if you are subject to rent control in Los Angeles. Under the city law, tenants under rent control with a minimum of 12-month occupancy are entitled to interest on their deposits.

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85 Most Common Questions Do you have a question about apartment living? Then you need “The Best of Apartment Life: How to Survive Apartment Living and Ownership,” a 154-page compilation of columns printed in The Times over the last few years. It provides answers to 85 of the most frequently asked questions about apartment living, managing and ownership.

The book sells for $12.75, which includes tax, postage and packaging. Checks, payable to the Apartment Assn. of Greater Los Angeles, should be sent to AAGLA, c/o Kevin Postema, 621 S. Westmoreland Ave., Los Angeles, CA 90005. Allow two weeks for delivery.

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