Penalized For Being a Little Late With the Rent--48 Times

Question: I have just vacated a house that I rented in Los Angeles for eight years. The landlord has refused to refund any of my $2,000 security deposit because of late charges accrued during my tenancy.

The signed lease agreement stipulates a 5% penalty for payments more than 10 days late. My rent was $2,000 a month. The owner claims that I was more than 10 days late 48 times, so the 5% late fees total $4,800 (48 times $100 equals $4,800). The landlord has generously agreed to forgive the extra $2,800 in late fees.

Is this legal? I admit that when I was paying late he would occasionally call me to inquire about the rent, but he never once mentioned a late charge until now.

Answer: As you say in your letter, “The signed lease agreement stipulates a 5% penalty for payments over 10 days late.” I assume that you signed the lease, and that’s the bottom line, the written agreement. The owner is not required to verbally remind you of the penalty when he calls you on the phone.

Because you don’t seem to dispute that the rent was late by 10 or more days 48 times, technically you owe the $4,800 in late fees. Although the landlord probably would have to sue you in Small Claims Court to collect the balance of them, you should actually thank him for forgiving you the obligation to pay them.

Though something like a 25% late fee would doubtless be considered usurious, and illegal, 5% would not. It is a legal fee that you agreed, in writing, to pay.

Maximum Charge for a Deposit

Q: I recently inquired on a house in Orange. The owner requested a deposit of $2,000, and first and last months’ rent (rent per month is $1,750) for a grand total of $5,000. Is this a bit excessive?

A: Assuming that the house is unfurnished, the maximum the owner can collect is $5,250, the first month’s rent plus two additional months’ rent (three times $1,750). The two added months of rent can be called last month’s rent or security deposit, but the state of California defines it all as “security deposit,” regardless of how the owner labels it.

Your letter says that the owner is collecting $5,000--a $2,000 deposit, plus the first and last month’s rent (2 times $1,750 equals $3,500) for a total of $5,000. As you know if you did the math, $2,000 and $3,500 is $5,500, not $5,000, so somebody’s math is flawed. You may want to look into that.

In any event, if the total being charged is $5,000, and the rent is $1,750, the owner is $250 less than the legal maximum.

Finding an Apartment After an Eviction

Q: I live in Long Beach and I have some questions. How is a person affected when he applies for an apartment if an eviction shows up on his credit report? I have heard that if one has an eviction on one’s record, one has to wait a few years for the eviction to clear to get an apartment. Is it necessary to have to wait that long or is there a way to qualify for an apartment now?

A: Evictions stay on your credit report for seven years, but there is no law or regulation that places any limits on your ability to get an apartment after them.

Obviously, an eviction record does not look good on your credit report. And while I can’t think of an eviction situation that is positive, the circumstances of some evictions are far more negative than others.

Many landlords won’t consider renting you an apartment regardless of any explanation you may have about the circumstances of an eviction. Others are not so rigid. I would recommend that you tell prospective landlords about the eviction before ever filling out their rental applications.

Some may appreciate your honesty enough to listen to your explanation of the situation. If your explanation is reasonable, they may even rent you an apartment. Almost no one, except maybe someone who is less than virtuous, or desperate, will rent you an apartment if you are dishonest upfront.

You also may consider, if it’s possible, getting a close friend or relative to co-sign as a guarantor of your rent. Sometimes that will work; however, it can be difficult because the co-signer puts himself at risk for your defaults.

Under Rent Control, a 3% Increase Is Legal

Q: I live in the Fairfax district of Los Angeles, a rent-controlled area. Despite the fact that I have been a model renter, last year I received a rent increase of $7, according to the law. This year’s rent increase is from $557 to $602, a whopping $45 increase.

On the rent increase form the following words were printed: “This increase is necessary due to the increased cost of tax, mortgage, insurance and utilities.” Is this legal? Can they get away with this?

A: The allowable rent increase for renters occupying rent-controlled units in the city of Los Angeles is 3% this year, as it was last year, not $7. Assuming your unit is rent controlled and your rent was $550 last year, the owner could have raised it by 3% or $16.50.

In your letter, you don’t say whether the unit you occupy is under rent control. Units, and entire buildings, can be exempted from rent control. That’s the first thing you need to find out--whether your apartment is covered by rent control law. To do so you may call the registration division of the Housing Department of the city of Los Angeles at (213) 367-9136.

If your unit is rent-controlled, a $45 annual rent increase is illegal. If not, it is legal.

Seminar: Owning Rental Property

A seminar on rental property ownership and management will be held May 17 from 10 a.m. to 1 p.m. at Apartment Association of Greater Los Angeles headquarters, 621 S. Westmoreland Ave., Los Angeles.

Learn how properties are valued and what makes them a good buy. The seminar costs only $79 for AAGLA members and $99 for nonmembers. Call (213) 384-4131 for reservations.

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Mail your questions on any aspect of apartment living to AAGLA, 12012 Wilshire Blvd., Los Angeles, CA 90025.