Housing

OAKLAND — California Attorney General Rob Bonta today filed a notice of appeal to reverse a judgment by the Los Angeles County Superior Court that would prevent the California Department of Justice from enforcing Senate Bill 9 (SB 9) against five charter cities on the basis that it violates their state constitutional authority. Under SB 9, local agencies must provide a “ministerial," or streamlined, approval process for homeowners to build a duplex on, or subdivide into two lots, a lot zoned for single-family homes.

"We firmly believe that SB 9 is constitutional as to every city in the state," said Attorney General Bonta. "As the California Second District Court of Appeal recently held, ensuring housing availability and affordability in California is a matter of statewide importance. My office has vigorously defended the Legislature’s efforts to provide dignified housing to every Californian, and we will continue doing just that with SB 9."

The underlying lawsuit challenging SB 9 was filed on March 29, 2022 by four Southern California cities — Redondo Beach, Carson, Torrance, and Whittier. The City of Del Mar joined the lawsuit on February 7, 2023. A copy of the notice of appeal can be found here.

Reiterates the need for all landlords and property managers to comply with the Tenant Protection Act

OAKLAND — California Attorney General Rob Bonta today announced a settlement against two individual landlords and their property management company, Bosanek Enterpises (doing business as Heritage Property Management Services), to resolve allegations that they violated California’s Tenant Protection Act (TPA) by unlawfully evicting tenants in Marysville. Co-authored by Attorney General Bonta during his time as a state assemblymember, the TPA was signed into law by Governor Gavin Newsom in 2019. It created significant statewide protections for most tenants, including by limiting rent increases and prohibiting landlords from evicting tenants without just cause. Effective as of April 1, 2024, Senate Bill 567 (SB 567) strengthened the TPA’s protections, created new remedies for violations, and gave city attorneys and county counsel express authority to enforce the TPA directly. As part of today’s settlement, the defendants will pay a total of $40,500, including $36,500 in restitution to the three affected tenants, and be required to take specific actions to ensure compliance with the TPA. 

“Millions of Californians are struggling to keep a roof over their heads. Today’s settlement underscores my office’s ongoing commitment to protecting renters, and I want to thank California Rural Legal Assistance for providing assistance in this matter,” said Attorney General Bonta. “We will continue to investigate and pursue violations of the Tenant Protection Act when appropriate. I urge local enforcers, including city attorneys and county counsel throughout the state, to do the same.”  

After receiving a credible complaint from California Rural Legal Assistance about a potentially unlawful eviction, the California Department of Justice launched an investigation into the landlords and Heritage Property Management Services. The investigation revealed that one landlord issued a pretextual eviction notice, claiming just cause to evict because the landlord’s uncle intended to move into the unit. However, under the TPA, landlords cannot evict tenants to move in relatives other than those specified in the law (owner’s spouse, domestic partner, child, grandchild, parent, or grandparent), and an uncle is not a qualifying relative. Additionally, no relative ever moved in, and the unit was rented to a new tenant at a large increase from the original rental rate. 

The investigation also revealed that a second landlord, working with the same property management company, issued two eviction notices claiming just cause because the landlord was undertaking a “substantial remodel” of the units. To qualify as a substantial remodel that justifies eviction under the TPA, work must be the “replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency,” or the abatement of hazardous materials, that requires the tenant to vacate the unit for at least 30 consecutive days to be performed safely. However, the remodeling work performed did not rise to the level required under the TPA to evict a tenant. The landlord subsequently substantially raised rents in the two affected units.  

Under today’s settlement, which remains subject to court approval, the defendants will:

• Pay $36,500 in restitution to the three affected tenants.
• Pay $4,000 in penalties.
• Be subject to injunctive terms designed to ensure that no misconduct recurs, including by imposing reporting and documentation obligations on all defendants and additionally requiring the property management company to train its employees on state rental housing laws and to take steps to ensure the adequacy of future no-fault evictions.

Attorney General Bonta is committed to enforcing the TPA. On February 28, 2024, he secured a settlement with two Bakersfield landlords and their property management company to resolve allegations that they violated the TPA and the Fair Employment Housing Act by unlawfully evicting tenants, raising rents, and discriminating against tenants based on their receipt of housing assistance benefits. On January 8, 2024, he secured a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 homes. On June 14, 2023, he secured a settlement with Green Valley Corporation to resolve allegations that the company violated the TPA by issuing unlawful rent increases to several of its employee tenants and serving unlawful eviction notices to a subset of those tenants. On May 22, 2024, he issued an information bulletin to city attorneys and county counsel, notifying them of SB 567’s strengthened protections to the TPA and of their direct enforcement authority under the recently amended TPA. Earlier this year, he issued alerts advising California tenants, landlords, and property managers of their rights and obligations under state law. 

The Housing Justice Team at the California Department of Justice reminds Californians that they can send complaints or tips related to housing to housing@doj.ca.gov. Tenants who need legal help can find legal aid resources in their area at www.LawHelpCA.org. A copy of the complaints and proposed judgments for all three defendants are available here: 1a, 1b, 2a, 2b, 3a, 3b.

OAKLAND — California Attorney General Rob Bonta today submitted a comment letter in support of a proposed rule by the U.S. Department of Housing and Urban Development (HUD) that would reduce barriers to HUD-assisted housing for individuals with past involvement in the criminal-legal system (justice-involved individuals). According to HUD, nearly a third of adult Americans have a criminal record. In California alone, approximately eight million individuals have some form of criminal record. In today’s comment letter, Attorney General Bonta underscores that affordable housing is vital to the successful reentry of justice-involved individuals and reducing recidivism. He also urges HUD to make several changes to the proposed rule to strengthen its effectiveness.   

“Reducing barriers to affordable housing is critical, particularly for those in our communities who have experienced interactions with the criminal justice system. Current research shows that these justice-involved individuals — who are disproportionately Californians of color — struggle to find housing, and too often, end up homeless,” said Attorney General Bonta. “We cannot ignore this reality; we must face it head on. At its core, the Biden Administration’s proposed rule seeks to promote second chances, and I am proud to support it.”

HUD-assisted housing includes both HUD-subsidized housing (e.g., payments to Public Housing Agencies to develop and operate housing for low-income families) as well as housing choice vouchers (e.g., rental subsidies to low-income renters in the private market). There are over half-a-million HUD-subsidized housing units in California, housing nearly one million low-income individuals and families. Over 300,000 households use housing choice vouchers to rent their homes in California. 

In the comment letter, Attorney General Bonta explains that the proposed rule balances justice-involved individuals’ need for safe, affordable housing with housing providers’ interest in maintaining the safety of their tenants and staffs. Specifically, he writes that:

• The proposed rule would generally prohibit consideration of a criminal activity that occurred more than three years prior to an application — a so-called "lookback period" — which is consistent with research showing that recidivism rates and the risk of future criminal activity decrease over time and with age, especially in households receiving housing subsidies. This provision also gives housing providers the flexibility to craft longer lookback periods where empirical evidence demonstrates that this is necessary to ensure the health and safety of tenants or property employees.
• The proposed rule states that determinations of criminal activity must satisfy a preponderance of the evidence standard. This provides clear guidance to housing providers making admission, program termination, and eviction decisions. It also promotes fairness by requiring that housing providers meet the same evidentiary standard that is required in most civil housing matters.
• The proposed rule’s support for state and local innovation in reducing barriers to housing in the Public Housing and Section 8 Housing Choice Voucher Programs is critical. 

In the comment letter, Attorney General Bonta also recommends that HUD adopt the following changes: 

• Clarify the proposed rule’s preemption language to promote greater compliance with, and ensure the effectiveness of, California’s strong legal protections in this area. Advocates have raised concerns about housing providers’ reluctance to follow California laws that provide additional housing protections for justice-involved people. Although the proposed rule states that it generally does not preempt state and local laws that provide additional protections, further clarity will help both tenants and housing providers. 
• Expand the proposed rule to also exclude, in addition to arrest records, the use of non-conviction records; juvenile records; records of service calls to law enforcement; and conviction records where the person has obtained an expungement, pardon, or other post-conviction relief in housing decisions, as California law provides.
• Expand the proposed rule’s lookback, procedural protections, and individualized assessment provisions to include, in addition to public housing operated by Public Housing Authorities, owners in the Section 8 Housing Choice Voucher and Project-Based Voucher Programs.
• Clarify that individualized assessment is required in eviction and termination decisions, not only admissions decisions. Individualized assessments take into account relevant information beyond that contained in a criminal record.
• Require individualized assessment where automated decision-making tools such as artificial intelligence and algorithms are used to help make housing decisions.

Attorney General Bonta has been committed to ensuring equal access to housing. On April 13, 2023, he issued guidance to California cities and counties directing them to review and modify, or repeal, their crime-free housing policies to ensure compliance with federal and state civil rights laws. On February 7, 2024, he issued updated guidance outlining cities’ and counties’ obligations under the recently enacted Assembly Bill 1418 (AB 1418). Authored by Assemblymember Tina McKinnor (D-Inglewood), AB 1418 prohibits local governments from, among other things, enacting ordinances, regulations, and rules that impose penalties on tenants and landlords solely for contacts with law enforcement. It is the first law in the nation that regulates crime-free housing programs. 

A copy of the comment letter can be found here.

OAKLAND — California Attorney General Rob Bonta today issued an information bulletin to city attorneys and county counsel, reminding them of their new enforcement authority under California’s recently amended Tenant Protection Act (TPA). Co-authored by Attorney General Bonta during his time as a state assemblymember, the TPA was signed into law by Governor Gavin Newsom in 2019. It created significant statewide protections for most tenants, including by limiting rent increases and prohibiting landlords from evicting tenants without just cause. Effective as of April 1, 2024, Senate Bill 567 (SB 567) strengthens the TPA’s protections, creates new remedies for violations, and gives all city attorneys and county counsel express authority to enforce the TPA directly.   

“The Tenant Protection Act is a powerful tool that my office has used to protect renters from unscrupulous landlords. Thanks to SB 567, all city attorneys and county counsel now also have the express authority to enforce the Tenant Protection Act, and I encourage them to do so,” said Attorney General Bonta. “My office stands ready to offer assistance to any city attorney or county counsel that may need it — we all have a role to play in keeping Californians secure in their homes.” 

The TPA prohibits landlords from evicting tenants without just cause. SB 567 imposes requirements designed to prevent landlords from falsely claiming a just cause basis for eviction. The TPA also prohibits landlords from raising rent more than 10% total or 5% plus the percentage change in the cost of living, whichever is lower, over a 12-month period. Earlier this year, the California Attorney General’s Office published a consumer alert, available in 24 languages, with a chart outlining the maximum rent increase currently allowed under the TPA. Under SB 567, landlords who violate the TPA may be liable to tenants for damages, attorneys’ fees and costs, and other relief.

In today’s information bulletin, Attorney General Bonta underscores that:

• City attorneys and county counsel may, in the name of their city or county, seek injunctive relief based on violations of the TPA for rental units within their jurisdiction. This new authority is in addition to any other existing authority city attorneys and county counsel have to enforce violations of landlord-tenant laws, such as local ordinances or, if applicable, under Business and Professions Code section 17200.
• If they receive reports from tenants, legal aid organizations, tenant advocates, or other local officials about violations of the TPA, city attorneys and county counsel are encouraged to use their authority to investigate those reports and, if appropriate, file suit to seek an injunction on behalf of their city or county to stop misconduct they identify. 
• Injunctions are a powerful remedy. In addition to prohibiting unlawful conduct, courts have broad authority to impose affirmative injunctive terms on wrongdoers to ensure that their bad acts do not continue.

Attorney General Bonta is committed to protecting tenants. On February 28, 2024, he secured a settlement with two Bakersfield landlords and their property management company to resolve allegations that they violated the TPA and the Fair Employment Housing Act by unlawfully evicting tenants and raising rents. Furthermore, on January 8, 2024, he secured a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 homes, as well as a settlement with Green Valley Corporation on June 14, 2023 to resolve allegations that the company violated the TPA by issuing unlawful rent increases to several of its employee tenants and serving unlawful eviction notices to a subset of those tenants. Attorney General Bonta also issued letters to California housing authorities making clear that tenants who receive Section 8 Housing Choice Vouchers are protected by the TPA and urging the housing authorities to not approve proposed rent increases for Section 8 voucher recipients that exceed state and local rent caps. Moreover, he issued legal guidance about steps law-enforcement officers should take to prevent and respond to unlawful lockouts and other illegal evictions. 

A copy of the information bulletin is available here.

OAKLAND — California Attorney General Rob Bonta and Governor Gavin Newsom today secured an order from the San Diego Superior Court finding that the City of Huntington Beach violated California’s Housing Element Law. The Court ordered the city to come into compliance within 120 days. Joined by California Department of Housing and Community Development (HCD) Director Gustavo Velasquez, Attorney General Bonta and Governor Newsom filed suit against the city on March 9, 2023. 

"Huntington Beach is not above the law — that's the essence of today's ruling. Local governments up and down our state should take notice," said Attorney General Rob Bonta. "We are facing a housing crisis of epic proportions, and my office will continue to act with great urgency, working with cities and counties that genuinely want to be part of the solution and holding accountable those that do not." 

"From day one, my administration has been clear: local governments must be accountable for following state law and planning for their fair share of housing,” said Governor Gavin Newsom. “That's what this case has been about from the start, and we will continue to focus on accountability. We can't solve the decades-in-the-making crisis around housing without everyone doing their part, and this result makes clear the state is serious about enforcing the law."

Since taking office, Attorney General Bonta has been committed to defending and increasing access to affordable housing in California. On November 3, 2021, he announced the creation of a Housing Justice Team within the California Department of Justice aimed at advancing housing access across the state. More recently, he announced a settlement with the city of Malibu that will enable the city to reach compliance with the state’s Housing Element Law and visited an affordable housing development in the Fruitvale neighborhood of Oakland. He also announced his sponsorship of a bill authored by Assemblymember Buffy Wicks (D-Oakland) that would encourage local governments to update their housing plans and facilitate housing permit approvals in cities and counties that fail to do so, and of a bill authored by Senator Scott Wiener (D-San Francisco) that would enhance the Attorney General’s ability to seek civil penalties in court against local governments that violate certain state housing laws.

A copy of the court's order can be found here. 

 OAKLAND — California Attorney General Rob Bonta today joined a broad, bipartisan coalition of 39 attorneys general in submitting letters to U.S. House and Senate leaders urging them to fund the Legal Services Corporation (LSC) in full. LSC is funded by federal appropriation and is a critical compliment to state and other funding for legal aid. LSC provides civil legal services to low-income Americans across the United States.

“As the People’s Attorney, I share a commitment to the equal access of our justice system and understand the barriers that low-income families can face when trying to access legal services,” said Attorney General Bonta. “The Legal Services Corporation provides on-the-ground legal assistance to Americans experiencing seemingly insurmountable obstacles, including our country’s Native American communities, individuals with disabilities, domestic violence survivors, survivors of natural disasters, and undocumented folks. I sincerely urge Congress to support our neighbors and prioritize investment in The Legal Services Corporation.”

Since its establishment by Congress 50 years ago, LSC has provided civil legal services to low-income Americans across the United States who otherwise would not have access to such services. LSC is funded by federal appropriation and the amount of the investment will determine the number of Americans in need that LSC will be able to assist. Each year, LSC provides grants to local nonprofits who together provide legal services to low-income individuals throughout the United States from approximately 900 offices nationwide, stretching from urban centers to small towns. However, despite 94% of federal dollars going directly toward eligible nonprofits delivering civil legal aid, the need for legal assistance is outpacing LSC's funding.

In submitting the letters, Attorney General Bonta joins the attorneys general of the District of Columbia, Georgia, Oklahoma, Massachusetts, Alaska, Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Washington, Wisconsin, Wyoming, and American Samoa, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.

A copy of the letters can be found here, and here. 

Malibu to update housing plan by September 2024 for development of 79 additional housing units 

SACRAMENTO — California Attorney General Rob Bonta, California Governor Gavin Newsom, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez today announced a settlement with the city of Malibu that will enable the city to reach compliance with the state’s Housing Element Law. With dedicated technical support from the state, the city will adopt a housing plan by September 23, 2024, to allow for the development of 79 housing units, 47 of which must be affordable to low- and very low-income households. The agreement, which is in the form of a proposed stipulated judgment and must be approved by the court, is related to California’s sixth “housing element update cycle” for the 2021-2029 time period.  

Under the state’s Housing Element Law, every city and county in California must periodically update its housing plan to meet its Regional Housing Needs Allocation (RHNA), or share of the regional and statewide housing needs. Located in Los Angeles County, Malibu was required to update its housing plan by October 15, 2021 to accommodate its 79-unit RHNA target. The city submitted a Housing Element Update in 2022, but was not found to substantially comply. After receiving a notice of violation from the state, the city and state conferred in good faith to chart a course for the city to attain compliance.  

“Our housing laws are not optional; they apply to all cities and counties in California. Today’s settlement with the City of Malibu underscores that basic principle,” said Attorney General Rob Bonta. “We are facing a housing crisis of epic proportions. When local jurisdictions like Malibu do their part and allow more homes to be constructed, all Californians benefit. My office will continue working closely with HCD to make sure that every single city and county comes into compliance and plans for the future." 

“To communities large and small, affluent, or otherwise – everyone must build their fair share of housing," said Governor Gavin Newsom. "Rather than further delay action through litigation, Malibu has decided to work with the state to plan for the development of more housing.” 

“Malibu is a community that holds both tremendous need for affordable housing, and tremendous opportunity. This agreement provides an enforceable contract to ensure those housing needs are met,” said HCD Director Gustavo Velasquez. “We are very appreciative to the City of Malibu for working with us to create this path to compliance with state housing law, and my team will provide every resource to help them be successful in that effort.” 

“We understand the importance of adhering to the State’s housing element law and are dedicated to fulfilling our obligations,” said Steve Uhring, Mayor of Malibu. “Despite the challenges we’ve encountered, such as the devastation of the Woolsey Fire and the issues caused by the COVID-19 pandemic and staff turnover, our partnership with HCD has been pivotal in guiding us toward a resolution. This settlement reflects the shared goal of the City and State of California to address housing needs effectively in our community.”

Among other things, a compliant housing element must include an assessment of housing needs, an inventory of resources and constraints relevant to meeting those needs, and a program to implement the policies, goals, and objectives of the housing element. Once the housing element is adopted, it is implemented through zoning ordinances and other actions that put its objectives into effect and facilitate the construction of new homes for Californians at all income levels. 

The housing element is a crucial tool for building housing for moderate-, low-, and very low-income Californians and redressing historical redlining and disinvestment. State income limits for what constitutes moderate-, low-, and very low-income Californians vary by county and can be found here. In Los Angeles County, the median income for a one-person household is $68,750. A one-person household that earns less than $70,650 is defined as low-income, and a one-person household that earns less than $44,150 is defined as very-low income.  

Under the settlement:

• Malibu will take several required actions to adopt a compliant housing element by September 23, 2024. The housing element process is typically lengthy — for example, local governments must meet certain public participation requirements and HCD must review every local government’s housing element to determine whether it complies with state law and provides written findings back to each local government — but Malibu has agreed to an expedited timeline and ensuring the public’s participation.
• Malibu acknowledges that, until it has adopted a substantially compliant housing element, it may not deny certain low-, very low-, and moderate-income housing development projects based on the city’s current, outdated general plan and zoning code. This is known as the Builder's Remedy. 
• Malibu could be subject to monetary penalties if it remains noncompliant 12 months after the effective date of the stipulated judgment.

A copy of the petition and proposed judgment, which details the settlement terms and remains subject to court approval, can be found here and here, respectively.

SACRAMENTO — California Attorney General Rob Bonta today announced his sponsorship of a bill authored by Assemblymember Buffy Wicks (D-Oakland) that would facilitate the construction of housing in cities and counties that fail to adopt a compliant housing element on time. Under California’s Housing Accountability Act (HAA), failure to adopt a timely and compliant local housing plan triggers the so-called “builder’s remedy,” a provision in effect since 1990 that limits the ability of local governments to restrict the development of new affordable and mixed income housing development projects. If enacted, Assembly Bill 1893 (AB 1893) will modernize and improve the efficacy of the builder’s remedy.

“California is facing a housing crisis of epic proportions. That is why we have been acting with great urgency, and why I’m now proud to sponsor AB 1893,” said Attorney General Rob Bonta. “The builder’s remedy is meant to hold accountable jurisdictions that do not adopt a compliant housing element on time, because every Californian suffers when cities and counties fail to plan for the future. It has been over 30 years since the builder's remedy was enacted and it's remained in effect, largely unchanged, since then. With AB 1893, we are finally updating this important provision to be clearer for local governments, planners, developers, and courts, while ensuring that even cities without up-to-date housing plans continue to develop desperately needed housing that is affordable to middle-class and lower-income Californians.” 

“It’s going to take all of us to solve our housing crisis, and AB 1893 will require all cities and counties to be a part of the solution,” said Assemblymember Buffy Wicks. “The message to local jurisdictions is clear — the days of shirking your responsibility to your neighbors are over.”

"California Community Builders believes AB 1893 is essential, common sense legislation. Housing is a top concern for Californians throughout the state — and especially Californians of color who suffer disproportionately from high housing costs and a lack of homeownership options they can afford," said Adam Briones, CEO of California Community Builders. "AB 1893 will modernize the Housing Accountability Act for the 21st century and ensure clear, consistent, reasonable consequences when cities don’t follow the rules."

"Habitat for Humanity California and our 33 Habitat affiliates express our strong support for AB 1893," said Maureen Sedonaen, Board Chair of Habitat for Humanity California, and CEO of Habitat for Humanity Greater San Francisco. "We believe in using all the tools in our toolbox to build affordable housing, and this legislation calls on local governments to join us in these efforts. Let’s not spend time litigating, let’s spend our time building affordable housing together."

Under the HAA's builder's remedy provision, local governments subject to the builder’s remedy may not deny certain housing projects — in particular, those that include certain thresholds of low- or moderate-income units — for inconsistency with zoning or land use designation. This is a limitation placed on cities and counties to encourage them to act in good faith and follow the state's housing element law. Under the housing element law, every city and county must periodically update its housing plan to meet its Regional Housing Needs Allocation (RHNA), or share of the regional and statewide housing needs. The housing element process is a critical part of California’s housing strategy because it allows cities and counties to plan for their regional fair share while addressing specific local needs and conditions. When a jurisdiction fails to adopt a compliant housing element on time, it prejudices residents and neighboring jurisdictions and impairs statewide planning. While developers have submitted dozens of builder’s remedy applications in the past year alone, many noncompliant jurisdictions have not been processing those applications in a timely fashion.

If enacted, AB 1893 would provide more guidance and certainty as to the applicable standards, reducing the prospect of disputes and litigation that impede the development of additional housing. For example, AB 1893 would:

• Designate sites appropriate for residential development, including housing, retail, and office space. Sites that have an existing industrial use or are adjacent to an industrial use would be precluded from the builder’s remedy. Industrial uses can pose environmental threats to housing that is located nearby.
• Provide clear objective standards, such as upzoning by doubling, or in high resource areas tripling, the density allowed under current zoning. Upzoning is where the amount of development allowed on a parcel of land is increased.
• Make technical amendments to clarify how the builder’s remedy interacts with other state law.
• Incentivize housing construction by making more development projects feasible, and enabling smaller developers to compete. By exempting sites 10 units and fewer from affordability requirements and by reducing the affordability requirement for mixed-income projects from 20% to 10%, many more builder's remedy projects will be financially feasible, including small-scale “missing middle” projects. “Missing middle” projects are relatively small multifamily development projects, like duplexes and townhomes, that are more affordable than similarly located single-family homes, and serve the needs of more diverse households.
• Allow city planning staff to quickly process builder’s remedy applications, since they will be required to utilize the baseline development standards set forth in the bill. Existing law is less certain.  

A copy of the legislation can be found here.

SACRAMENTO – California Attorney General Rob Bonta today announced a settlement resolving allegations that Arnel Management Company (Arnel) illegally withheld security deposits from tenants in Southern California. Specifically, Arnel — a corporate landlord that operates 19 apartment complexes in Orange and Los Angeles counties — is alleged to have automatically deducted pre-set cleaning charges from security deposits in violation of California law and an existing injunction. Under the terms of today’s settlement, Arnel will pay over $1 million and be subject to more stringent injunctive terms to deter future misconduct.

“California tenants have rights, and my office is committed to protecting those rights,” said Attorney General Bonta. “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.”

In 2001, the California Attorney General’s Office reached a separate settlement with Arnel related to its security deposit withholding practices. Today’s settlement is the result of a new investigation into Arnel and will replace and refine the terms of the 2001 judgment. The new investigation revealed that in some buildings Arnel was deducting pre-set cleaning fees from tenants’ security deposits, irrespective of the condition of the unit. Tenants could only avoid the pre-set cleaning fees by having their unit professionally cleaned when they moved out. 

Under the settlement, Arnel will, among other things:  

• Pay $500,000 in additional civil penalties.
• Pay $650,000 that will go to tenant rights-related legal aid organizations in Orange and Los Angeles counties.
• Be prohibited from requiring a tenant to repair any damages or defective conditions that preexisted the tenancy or that resulted from ordinary wear and tear.
• Be prohibited from imposing any pre-set or predetermined deductions, or treating any portion of a security deposit as nonrefundable, including, without limitation, by charging a standard cleaning fee, a standard carpet cleaning fee, a standard painting fee, or any other standard fees or deductions not tied to the condition of the unit.
• Be required to provide clear notice to tenants of their rights.
• Be required to respond to tenant complaints in writing, and support security deposit deductions with pictures. 

Under state law, withholding cleaning fees from a security deposit is allowed only when the unit is not left in the same level of cleanliness as when the tenant moved in. Tenants may clean their unit themselves, and landlords may not deduct for repairing ordinary wear and tear. In addition, tenants may ask their landlord to inspect their unit before they move out and identify any issues, so that the tenant has the chance to fix or clean them in order to avoid security-deposit deductions. Earlier this year, Attorney General Bonta issued five consumer alerts advising California tenants of their rights and protections under state law, and alerting property managers and landlords of their obligations to tenants. The consumer alert on security deposits can be found here. It is also available in Spanish, Chinese, Korean, Tagalog, and Vietnamese. 

A copy of the stipulation and proposed amended judgment, which details the settlement terms and remains subject to court approval, can be found here and here.

SACRAMENTO – California Attorney General Rob Bonta today issued the following statement in response to the ruling by the California Second District Court of Appeal affirming a lower court opinion, which found that Senate Bill 10 (SB 10) was constitutional. SB 10 empowers local governments to allow for denser housing, irrespective of local restrictions, if the local government so chooses.

“All along, we have been arguing that SB 10 is constitutional. Today, the California Second District Court of Appeal ruled in our favor,” said Attorney General Rob Bonta. “Up and down our state, Californians are struggling to afford housing. Our legislature passed SB 10 to help address that problem by allowing for the construction of denser housing. I would like to thank Senator Wiener for authoring SB 10, and thank my team for successfully defending this important law.”

“This ruling is a big win for all Californians struggling under our housing affordability crisis,” said Senator Scott Wiener. “The court’s recognition that our housing crisis is best tackled at the state level is a historic step forward for pro-housing policy. The Department of Justice’s excellent work on this case has paved the way for much more progress to come.” 

Attorney General Bonta is committed to advancing housing access, affordability, and equity in California. Just last week, he announced his sponsorship of a bill authored by Senator Wiener that would enhance the Attorney General’s ability to seek civil penalties in court against local governments that violate state housing law. Earlier this month, Attorney General Bonta also secured a court order requiring La Cañada Flintridge to process the approval of a mixed-use affordable housing project under the Housing Accountability Act’s so-called “builder’s remedy” because the city did not have a compliant housing element in place when the project was proposed.

A copy of the appellate court’s decision can be found here.