[Stupidscript]

We live in Burbank, California. Our lease agreement for the past 4 years includes language stating that if we break the lease by giving 30-day notice of our intent to vacate prior to the lease's expiration, we (1) forfeit our entire security deposit, (2) are required to pay one extra month's rent, and (3) are then responsible for one additional rent payment if they fail to rent the house to someone else within 30 days of our moving out.

Is the clause (1) to forfeit our entire security deposit enforceable in California?

Our research seems to indicate that the other two penalty clauses (2)(3) would be enforceable, but that the security deposit is treated differently by the State, perhaps regardless of the terms of the signed lease agreement.

Thank you in advance.

[ballengerb1]

It is my understanding of CA renters laws that the statement about your security deposit would violate CA law. However, in most states, if you break the lease, you must pay the rent and keep paying the rent unril a new renter is found. Many states do not require the owner to make an effort to find the new renter either, so maybe what you have isn't so bad. Best to consult a CA attorney who specializes in leases.

[smoothy]

You actually can be held to the full amount of the rent due for the remaining period of the lease IF they actively try to rent it out and don't find someone. Something rare but in a bad economy... possible. They can also hit you for repainting and cleaning fees, something they have to bite if the lease runs its course for normal wear and tear.

Don't know California Statute... but the forfieting of a security deposit does appear wrong on its face value.

[ScottGem]

I would say its enforceable because a standard buyout clause is 2 months. So, by including the security deposit, it effectively becomes 2 months with an additional month if they can't rent.

Since this would be adjudicated in small claims court if the landlord decides to enforce it, I think the court would go with the intent.

You also run the risk of the court throwing out the entire clause and then requiring you to pay the balance of the lease.

[Stupidscript]

Thank you for your response. The security deposit is 2x one month's rent and the lease stipulates that it is *never* to be used for rent. CA tenant law seems to agree that it can't be used for rent, except for overdue rent which = "damages".

[ScottGem]

But its not for rent, it's a penalty for early termination.

[Stupidscript]

Exactly! My question is whether such a penalty is allowed in California, regardless of its inclusion in a signed contract, such as a lease.

[Stupidscript]

Thank you. The 2 other penalties limit how much "penalty rent" they can collect, fortunately. CA Civil Code §950.5(m): No lease or rental agreement may contain any provision characterizing any security as "nonrefundable."

[ballengerb1]

I agree and understand there is no such thing as nonrefundable security but that does not mean they can't keep it. Landlords where being creative a few years back and charged nonrefundable fees for move in, keyes whatever they wanted. The CA law was written to stop that but a regular security deposit can be kept, not refunded, by the LL under certain situation

[ScottGem]

First, please don't use the Comments feature for follow-up. Use the Answer options instead.

There is one more issue here. You signed the lease. Unless a lease provision is in express violation of CA law its likely to be upheld.

[Stupidscript]

Thanks, ScottGem. Sorry.

I agree that a signed contract is a signed contract. And, ballengerb1, I also agree with your position.

It's a matter of degree, I would think: Perhaps if a landlord presented a lease with onerous terms, like that they could drop by every weekend unannounced for a quick inspection, everyone would agree that even if such a thing were included in a signed, notarized document it would be severable and unenforceable, especially in California, which is relatively tenant-friendly.

But does this particular thing meet the same legal criteria? Does California's code and legal precedent demand that the "security deposit" be used only for the four purposes noted in CA Civil Code §950.5(b), and never as a punitive instrument?

Does CA Civil Code §950.5(m): 'No lease or rental agreement may contain any provision characterizing any security as 'nonrefundable.' " describe the language claiming "forfeiture of the entire security deposit" that's in our lease?

I'd like to see if I can find an answer to those questions, as I cannot discern the answers from my reading the letter of the law.

Thanks again, folks. ;)

[ScottGem]

1950.5(b) states that the security is "to be used to reimburse the landlord for costs associated with processing a new tenant...". It seems to me that an early, unplanned termination can be interpreted to cause such costs.

From your quote of 1950.5(m), I don't see the lease clause as stating that the deposit is non-refundable. This lease is simply stating that the deposit can be used as reimbursement for the damages that result from an early lease termination.

I think you are stretching by trying to apply these laws and I don't see the lease terms as in direct violation of CA law.

[Stupidscript]

You may be right. But interpreting the law can sometimes be counter-intuitive. If I could find any case law, that would help.

[smoothy]

What YOU or I might interpret isn't necessarily what the Court would interpret... and its what the court interprets that is going to rule the day.

An Amateur attorney trying to tell a Judge what the law really says is a sure fire way to lose a case really fast. This could easily be a case where you end up digging yourself into a bigger whole than you started with. People that work in law (or other fields) every day can spot a poser in a few words... and take sport in shooting them down.

Tread carefully if you try to take it to court... trying to win something on principle may cost more in the long run then simply letting it go right or wrong.

[Stupidscript]

I fully agree with you, smoothy. I want to reassure you and everyone else that I asked these questions of this help desk to see if I can more fully understand whether what my landlord included in our lease was within the scope of legally allowable demands. Just looking for a legal answer from someone who knows.

My wife is of the opinion that if our landlord wrote it, it must be God's will. I'm not sure I agree with that, and I am simply attempting to figure out what California law actually says about it.

If it's standard operating procedure to include such a clause in a residential lease in California (and I have never seen any clause like it in any lease I have ever signed... all 9 of them), then I have no problem abiding by the terms of the lease.

However if this clause is patently illegal to include in a lease, I'd like to know. Fair enough?

I'm not taking anybody to court by myself... ever! LOL!

[smoothy]

I'm in agreement... nice to know that the screwing you are getting is legal vs illegal when you get it Knowledge is never a bad thing.

Can save it from happening again. Not everyone is honest or follows the letter of the law even when they know what it is. Why you should ALWAYS read everything before you sign it. Stress that to your wife if you haven't yet.

[Stupidscript]

Very sound advice, smoothy.

Now, if only we could guarantee that we had the answers to questions like these before signing. That would be awesome!

Landlords hold a very special place, because, in most situations, the tenants are under extreme pressure to find a place to live, and do not usually have the time, expertise or resources to vet each clause in what is often a long, detailed and legalese-filled document. The consequences for a tenant to argue about a clause include flat out denial of the opportunity to live in the property. And if the clauses are discovered to be illegal after moving in, it is easy for a landlord to cause extremely stressful problems for the tenant throughout the course of their tenancy, and the threat of giving bad reviews to future potential landlords is a very strong one. Both of those potential harms are powerful incentives NOT to rock the boat.

It is only now that we are leaving the residence that we feel we can address this potential issue, which is why I am now seeking advice about that clause's inclusion in the lease.

In my opinion, if a landlord DOES include illegal clauses in a lease, there should be a penalty for THEM to pay, as a result. The burden of providing compliant legal documents for others to sign should be on the entity presenting the document, especially in a time-sensitive situation like the one posed by a family trying to get into a house before they get kicked out of the house their previous landlord just sold.

It's not taking a business advantage when they include illegal clauses... it's rapacious, and there should be consequences beyond simply ignoring such a clause, in my opinion. And we LIKE our landlord, if you can believe it! :)

[smoothy]

I wouldn't be so quick to put everything on the Landlords. THey are already saddled with many regulations... including having to rent to people they have a bad gut feeling about, etc... then you have tennents from hell, that whine about everything... or tear the place up... cuase roach infestations the landlord has to pay through the nose to treat because someone is filthy... and the list goes on and on. Some places are so bad I find it amazing anyone WANTS to rent out their property, like NYC and DC as two examples. There actually are legal remedies when wronged for good reason. And My family has rented out a House for a period of years and the Hell we went through and the egregious expenses a couple bad tennents caused us makes me not want to ever do it again.

So yeah... there are plenty of bad apples on both sides... but bad tennants far outnumber the bad landlords, and it's the landlords that have the most to lose. And contracts try their best to level that field a bit.