People Ex Rel. Smith v. Parkmerced Co.

Defendants/appellants Parkmerced Company and Parkmerced Management Corporation appeal a judgment in favor of plaintiff/respondent People of the State of California in respondent’s action for violation of Civil Code section 1950.5 governing rental and lease deposits. Respondent brought its action in response to appellants’ imposition of fees additional to the monthly rental charged each tenant of appellants’ apartment complex. Appellants contend section 1950.5 does not prohibit landlords from receiving nonrefundable security deposits, that section 1950.5 is unconstitutional on its face, that the trial court abused its discretion in assessing civil penalties, and that it erred in ordering a refund of securities to a tenant organization rather than to the state. We affirm.

The Parkmerced Company owns, and Parkmerced Management Corporation operates, an apartment complex consisting of 3,484 rental units. Tenants have one-year leases for which they pay an annual rental in 12 monthly installments, due in advance on the first day of each month. Each lease provides for a security deposit equal to the second month’s rent. In addition, appellants charge a $65 increment to each new…

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 685 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 686 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 687 OPINION Defendants/appellants Parkmerced Company and Parkmerced Management Corporation appeal a judgment in favor of plaintiff/respondent People of the State of California in respondent's action for violation of Civil Code section 1950.5 1 governing rental and lease deposits. Respondent brought its action in response to appellants' imposition of fees additional to the monthly rental charged each tenant of appellants' apartment complex. Appellants contend section 1950.5 does not prohibit landlords from receiving nonrefundable security deposits, that section 1950.5 is unconstitutional on its face, that the trial court abused its discretion in assessing civil penalties, and that it erred in ordering a refund of securities to a tenant organization rather than to…

I concur, but cannot do so without recommending to the Legislature that it redraft Civil Code section 1950.5 The majority's observation that this statute is "no model of clarity" is a gross understatement. As Justice Gilbert said in Granberry v. Islay Investments (1984) 161 Cal.App.3d 382 [ 207 Cal.Rptr. 652 ], this statute "teeter[s] on the brink of unintelligibility." The only reason it still teeters is because of judicial efforts to keep it alive, and these efforts have been considerable. When Justice Gilbert must begin an opinion by saying "here we attempt to make sense out of Civil Code section 1950.5 ," the Legislature should realize there is a problem. When our colleague uses such language as "to further confound anyone trying to make sense out of the statute" and states that a literal reading of the statute would lead to "an absurd result," it becomes clear the Legislature has a mandate to redraft the statute. This is not a statute that is infrequently utilized. With the possible exceptions of relationships between husbands and wives and employees and employers, *Page 694 no relationship occurs more frequently in California than that of landlords and tenants. For this…