Landlord to pay $19.25M to tenants over withheld deposits — one was charged for rug cleaning but had concrete floors
Two women moving out of Form 15, an apartment building on Market Street in downtown San Diego, found a $550 painting charge on their move-out bill.
Alexis Norman and Nicolette Cochran called the property owner, Essex, to ask about it, and the company couldn't find any paperwork showing the unit was painted, a lawsuit says. Additionally, Essex billed them for a carpet cleaning, even though their floors were concrete.
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Now the former landlord, Essex Property Trust (NYSE:ESS), is involved in a $19.25 million settlement for them and other former residents. The San Mateo, California-based company owns apartments in California and the Seattle area. The payout also cancels $8.7 million in move-out charges Essex says former tenants still owe it.
Essex denies the allegations. An attorney for the company told Times of San Diego it settled because dragging out the case would be risky and expensive. Essex has not responded to Moneywise's request for comment by publication time.
The deal isn't final yet. Norman and Cochran, who both lived at Essex complexes in San Diego County, sued the company in September 2022. Their lawyers will ask a judge for preliminary approval on Nov. 13.
Jimmie Davis Parker, a San Diego attorney who co-represented the tenants, told Times of San Diego the deal would reach more than 200,000 former Essex tenants.
"Challenging an improper deduction individually can cost more than the amount at stake, giving powerful landlords an unfair advantage," he said.
What Essex is accused of charging tenants for
In California, repair and cleaning charges over $125 generally must be supported by documentation, like a contractor's bill.
Instead, many Essex tenants received purchase orders the company prepared itself, the complaint alleges. The lawsuit also claims Essex sometimes billed tenants more than its contractors charged.
One former tenant was charged close to $2,000 for new carpet. When he tracked down what the contractor actually billed, it was $907.
The tenants' lawyers also say they learned during the case that some vendors gave Essex discounts that weren't reflected in tenants' bills. Hogue and Belong, a San Diego tenant and employment law firm, is leading the lawsuit. Co-founder Jeffrey Hogue says he believes Essex has stopped doing that since his team uncovered it.
