Essex Property Trust Unlawfully Withholds Security Deposits from California Tenants, Class Action Claims

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A proposed class action alleges real estate investment trust Essex Property Trust and affiliates systematically bill former tenants in California for fraudulent, excessive or unsubstantiated move-out charges.

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The 80-page case claims Essex Property Trust, Inc., Essex Portfolio, L.P., Essex Management Corporation and Essex SPE, LLC, the owners of 193 residential complexes with approximately 50,000 units in California, unlawfully withhold consumers’ security deposits by charging them for “unsubstantiated work, work not necessary, work not performed and/or not the obligation of the departing tenant under California law,” such as normal wear and tear.

Related Reading: Norman et al. v. Essex Property Trust, Inc. et al.

The filing relays that landlords are required under California law to provide tenants with an itemized statement “indicating the basis for, and the amount of, any security received and the disposition of the security” within 21 days after tenants have vacated the premises. Landlords must also send tenants a copy of the bill, invoice or receipt from the person or entity that cleaned or repaired the premises describing the work performed, how long it took and the hourly rate charged, the suit says.

However, the case claims Essex fails to send tenants bills, receipts or invoices from the third-party vendors that purportedly clean and repair the vacated premises. Instead, Essex purposefully gives tenants “unlawfully vague” descriptions of what type of work was performed, who performed it, how much it cost and how many hours it took to complete in an attempt to maximize security deposit retentions, the suit claims.

According to the lawsuit, Essex often bills former tenants for “unreasonable, excessive, unlawful, unenforceable and/or unsubstantiated” labor and service fees exceeding the deposit amount. In some instances, the company will send consumers collection notices, damaging their credit and impairing their ability to rent other apartments, the complaint says.

The plaintiffs, California residents who leased an apartment owned by Essex from April 2021 to March 2022, say they have yet to receive any substantiated itemized statement detailing how their $300 security deposit was spent. Rather, Essex sent them a “Preliminary Move Out Statement” reflecting the following charges: $280.00 for “Carpet Cleaning;” $385.75 for “Apartment Paint & Supplies;” and $312.93 for “Blind Replacement,” the filing says. Essex provided the plaintiffs with a vendor receipt for the blind replacement, but they did not receive a receipt for the carpet cleaning and painting charges, the case states.

After the plaintiffs complained to Essex about the unsubstantiated charges, the company provided them with a revised statement in June 2022 that removed the blind replacement fee but still deducted the carpet cleaning and painting charges from their security deposit, the filing alleges.

“To date, Defendants have never produced to Plaintiffs any vendor receipts for the alleged carpet cleaning and painting,” the complaint reads. “Nor have they produced any statement of the work performed, the hours of work, and the hourly rate for the work performed allegedly cleaning the carpet and painting.”

The lawsuit looks to cover any former residents of Essex Property Trust’s properties whose leaseholds terminated between September 27, 2018 and the present, and who had at least $125 of their security deposit retained for cleaning, repairs and/or replacements combined.

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