APARTMENT LIFE : ‘Last Month’s Rent’ Deposit Can Be Confusing
QUESTION: I am an apartment owner in Hermosa Beach, and I disagree with you on your answer to the question about how a deposit designated as “last month’s rent” is interpreted in a rental agreement.
What it means is that the portion of the security deposit designated as “last month’s rent” can only be applied toward the amount of rent not collected during the last month of tenancy. It does not mean that the amount stated in the agreement is what the last month’s rent will be.
If you designate $500 of a $1,000 security deposit as last month’s rent, then that $500 can only be used for any amount of rent not collected in that last month. If the current rent is $600 when the tenant gives a 30-day notice, then the tenant must still pay the $100 difference that the deposit has not covered.
This is a confusing point between landlords and tenants. Please clear this up with your readers, and tell the landlords to identify the entire deposit as one “security deposit,” not broken into specific deposits. (Please cite the “Landlord’s Law Book,” Nolo Press, Page 72.)
ANSWER: You’re right when you say this is a very confusing point and that landlords should identify all deposits as “security deposits.”
There is an example on Page 72 of the book you refer to, with a beginning rent of $400, which has risen to $500 at move-out time. Here’s how it reads:
“Some tenants take the position that the landlord, by accepting $400 as ‘last month’s rent,’ implicitly agrees to accept the $400 as full payment for that month, even though the current rent is $500. There is no definitive legal answer, but the tenant has a pretty good argument that last month’s rent means last month’s rent. The potential disagreement can easily be avoided by labeling all up-front payments as a ‘security deposit.’ ”
According to Trevor Grimm, general counsel to the Apartment Assn. of Greater Los Angeles, tenants suing landlords on this issue in Small Claims Court have a “very good argument” and generally will win it because of the “ambiguity” in the contract, particularly since it is you, as the lessor, who has created the ambiguity.
Grimm suggests that you call the “last month’s rent” portion of the security deposit a “deposit against last month’s rent” to clarify your intention.
(Note: Remember, too, that if the money is a last month’s rent, rather than a deposit, it is taxable in the year received.)
Renter Can Pay Pet ‘Fee’ in Rent Curb
Q: In the city of Los Angeles, may a tenant and an owner agree in writing under the “extra service” part of the rent control law that a tenant may get a new pet for an extra sum of rent when the original written agreement said there would be no pets allowed?
A: According to Barbara Zeidman, director of Los Angeles’ Rent Stabilization Division, the answer is yes. However, both the owner and renter will need a lot of “good faith” and a little preventive precaution to make it work.
Here are the problems and solutions to them. First, from your point of view, the owner may raise the “fee” (as an additional service the money you pay for the pet is not rent) as much and as often as he likes. Solution: Write something into the agreement that limits increase.
From the owner’s point of view, the problem is that since the “fee” is not rent, he cannot evict you for not paying the fee. He would have to sue you in court under contract law to collect. Solution: Write into the agreement that all attorney’s fees and related costs resulting from any such suit filed will be the responsibility of the renter.
Tenant Received Large Rent Increase
Q: I am a tenant in Norwalk. I have been living here for three years and the owners hadn’t raised the rent in that time, until now. Now, suddenly, I have received a letter asking for an $85 a month rent increase.
Isn’t there a rule somewhere that says they can’t raise the rent this much at one time? If I give them a 30-day notice, do I get my security deposit back? If they don’t give it to me, where can I go to get it back?
A: There is no rule about how much your landlord can raise the rent in Norwalk, as the city is not under a rent control ordinance. However, if you average out the increase over three years, it might not seem so steep.
It is not a good idea for apartment owners to forgo rent increases for long periods, as your owner has done, and then increase rents by significant amounts all at once. The reaction you are having to the increase is a common one.
If you decide to give the owner a 30-day notice, the owner is required to refund your security deposit, or an accounting of how it was spent, or a combination of the two, within 14 days after the day you move out.
He can deduct money from the deposit for the following purposes--cleaning costs (assuming the apartment was clean when you moved in and isn’t clean when you move out), damages, except where they occur due to “normal wear and tear” and unpaid rent.
If you move out and your owner does not refund your security deposit, or account for it, or if you feel the accounting is unfair, you may sue him in your local Small Claims Court, for amounts up to $2,000. For more than that, you’ll have to sue in Municipal Court.
Kitchen Faucets Only Supply Hot Water
Q: I am a renter in Los Angeles, and I have two hot-water faucets in my kitchen. My complaints haven’t helped. Whom can I contact to order the management to see that I get cold water?
A: Your problem is a little unusual. While tenants sometimes complain about not having hot water, few complain about too much of it. If building management won’t help, you can contact the Los Angeles Health Department.
