People Ex Rel. Smith v. Parkmerced Co., 198 Cal. App. 3d 683 (1988)

Citation: People Ex Rel. Smith v. Parkmerced Co., 198 Cal. App. 3d 683 (1988) (1)
Parent Document: People Ex Rel. Smith v. Parkmerced Co., 198 Cal. App. 3d 683 (1988)
Jurisdiction: California (state)
Effective Date: 1988-02-17
Original Source: https://www.courtlistener.com/opinion/2135742/people-ex-rel-smith-v-parkmerced-co/ ↗

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(1) Appellants conceded that the $50 transfer fee was never considered to be rent, but rather a fee to cover administrative costs. As to the $65 increment, there is substantial evidence that neither appellants nor tenants considered it rent, despite its being included with the first month's rental payment. Tenants and former tenants variously testified that they were told the $65 fee was a cleaning fee, an administrative fee, a processing fee, or a move-in fee, or they were not given an adequate explanation of its purpose. Appellants testified the fee was to recover some of the "front-end" costs of moving in a new tenant; that it was not considered when calculating rent increases pursuant to the local rent control ordinance; that they charged the increment rather than raising the security deposit or creating a cleaning fee deposit because that would have required them to account to the tenants; that the $65 fee was constant regardless of the size of the apartment; that advertising brochures describing rental fees did not disclose the $65 first month's increment; and that the $65 fee was differentiated from rent in internal accounting records. Appellants analogized it to the $50 transfer fee: *Page 690
its purpose was to recover certain front-end costs, such as cleaning, advertising and showing the apartment, checking credit references, and the like. Thus, we have substantial evidence to support the trial court's finding that the deposits herein were not for rent or any other purpose permitted by section 1950.5
(2a) Section 1950.5 defines "security" "as any payment, fee, deposit or charge . . . used or to be used for any
purpose" in a rental agreement. That "security" is intended to have a broad definition can be seen in a comparison of the present section 1950.5 to the one it replaced. (3) When the Legislature enacts a new law on the same subject as a prior law or makes a material amendment or change to an existing statute, we presume a legislative purpose to change existing law. (SeeClements v. T.R. Bechtel Co. (1954) 43 Cal.2d 227, 231 [273 P.2d 5]; Union League Club v. Johnson (1941) 18 Cal.2d 275, 278 [115 P.2d 425].) (2b) The original section 1950.5 applied to "[a]ny payment or deposit of money the primary function of which is to secure the performance of a rental agreement . . . other than a payment or deposit . . . made to secure the execution of a rental agreement. . . ." The legislative history of the current section 1950.5 indicates that the reason for changing the language to "any payment . . . for any purpose" was to eliminate any distinctions between payments or deposits based upon their primary function. The change was also to expand the security deposit law to apply not only to payments made to secure performance, but also to secure execution of the lease.2
(4) In short, section 1950.5 permits collection of limited security deposits, but restricts the use thereof to specifically defined purposes. Any portion of such deposits not "reasonably necessary for the purposes specified in subdivision (b) [of section 1950.5]" must be refunded to the tenant. (§ 1950.5, subd. (e).) *Page 691

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