Tenants Charge Downtown Developer Took Them to Cleaners

By Oliver Lukacs
Staff Writer

April 20 -- One of dozens of disgruntled tenants driven out of Downtown’s new residential community by noise and disappointment, Sharon Barnes thought her one-year ordeal was over when she closed the door to her empty, clean $2,200 apartment and handed in the keys.

All Barnes needed to move on with her life was the $1,500 deposit check Craig Jones, the City’s biggest residential developer, was due to send her within 21 days. It never came.

After wrangling with management for three months and waiting for the check that she was repeatedly told was “in the mail,” Barnes threatened to file a small claims suit. But instead of her deposit, she finally received a mysterious cleaning bill for $1,000 and a $500 check.

“I just want my money back,” said Barnes, who lived in one of the 378 units Jones has developed Downtown. “It’s hard for me to believe they’re allowed to go on operating like this.”

Barnes is not alone. Eight tenants of the nine new Downtown apartment buildings developed by Jones have filed cases in small claims court to recoup their deposits, which range from $1,500 to $2,300.

And some 40 more have threatened to take their cases to court or to the City Attorney’s office to recoup the money Jones’ company, JSM Management, has allegedly withheld and reduced.

Jones did not return repeated requests for comment.

Andrew Zanger, a local tenants’ rights attorney, said he has met with roughly 20 tenants and talked to another 30 who complained about Jones withholding and reducing their deposits. It is the repetitive nature of the complaints, Zanger said, that is surprising.

“For an owner that large who has that many units it’s not that unusual” to get so many complaints, Zanger said. “What’s unusual is that you hear the repetitive same complaints over and over, where for other landlords they’re different kinds of complaints.”

More than a dozen tenants interviewed by The Lookout accuse Jones of delaying repayment months past the 21-day legal deadline and then deducting anywhere from 15 to 80 percent of their deposits for “cleaning fees” his company allegedly fabricated.

Those interviewed were contacted from a list of 50 tenants whose refunds were allegedly denied or reduced by Jones’ company. The list was provided by two of JSM’s former managers.

Most of the tenants interviewed said at least half of their deposits were withheld.
Based on the interviews, the total amount allegedly withheld from the 50 tenants on the list likely ranged from $40,000 to $75,000.

Pushed past their wits end, it was only after months of unreturned phone calls, unfulfilled promises, physical confrontation and threats of litigation that JSM Management finally refunded even the severely reduced deposits, the tenants told The Lookout.

“These buildings are filled with lawyers, engineers, and professional people who pay a lot of money and don’t like to get shafted,” said Michael Haugh, a former tenant of the Amalfy, who after 76 days of phone-tagging and delays got his deposit with $600 deducted. “We’re not just going to sit there and get screwed.”

Haugh said he is taking the matter to small claims court.

Of the eight cases filed against Jones and JSM since the company took over management of the buildings three months ago, the tenants prevailed in four, while Jones won one case. One case was settled out of court and two are still pending. Jones has been forced to pay roughly $5,000 total for the cases he lost.

In addition, two complaints have been filed against Jones with the Santa Monica Consumer Protection Unit, according to Adam Radinsky, the deputy City Attorney.

“As far as exact content or who made them, I can’t say,” Radinsky said.

Radinsky said his office has not litigated any claims of deposit mismanagement against Jones in the past, but added that the City did file a tenant harassment suit against him in 2001, which was settled out of court for $11,000.

For many tenants, who are working professionals, squabbling over $500 or a $1,000 after they’ve moved is not worth the time and potential expense, residents agree.

“I don’t have time for this,” is the prevailing attitude, said Julia Roberson, a tenant of the San Remo, who has a small claims case pending for damages after being made to fight and wait four months before getting her $1,500 deposit back.

“Somebody has to stand up,” said Robeson, who was pleasantly surprised to find the City’s litigation process is cheap and relatively quick. “I can’t believe these guys are getting away with this. But my guess is there’s a lot of people for whom $400 or $1,000 doesn’t mean a lot.

“If your company is moving to another state, and you’re moving on with your life, what do you care? You don’t have the time.”

Under state law, if a property owner fails to return a deposit or give an itemized list of deductions within 21 days of a tenant moving out, the tenant can sue for twice the amount of the deposit and damages through a “bad faith claim.”

In Jones’ buildings, tenants said, the same process seems to recur like clockwork: the tenant cleans the one-to-three-year-old unit before moving, gets a refund guarantee from the walkthrough inspector (if one shows up), months pass by, a bill shows up for cleaning fees, the tenant contests the fee and JSM returns roughly half, if any, of the deposit.

Many tenants claim the cleaning fees, for dirtied walls and carpets, seem arbitrary, as if they are indiscriminately sent out to anyone who moves, irregardless of the unit’s condition.

“It looks like some one just made up this bill and tacked my name on to it,” said Haugh. “It doesn’t seem straight. It just seems extremely excessive.”

This was the case with Barnes’ unit, said Nick Speropolous, a former employee of JSM Management who conducted the walkthrough inspection for her apartment. His findings confirmed Barnes’ claim.

“She had it professionally cleaned,” said Speropolous, who has sued Jones for back wages. “She left a spotless apartment, the walls didn’t have any scuff, nothing, and she didn’t get her deposit back.”

Speropolous, who at one time oversaw seven of Jones’ nine buildings, alleges the deposit mismanagement he witnessed was a pattern that was part of the company “culture.”

“Two dozen people moved out, and nobody got their money back the whole time I was there, and six people were owed their deposits when I got there,” he said. “What they got, if anything, after two or three months, was a bill.”

The cleaning Jones charges for seems to amount to a complete refurbishing, or “freshening up” of apartments that landlords, not tenants, are legally responsible to pay, said local landlord attorney Rosario Perry.

By charging the tenants for that capital investment, Jones is illegally passing the buck to maximize his profits, according to Perry.

“They can use the deposit for repair, not cleaning above reasonable wear and tear,” he said. “The tenant is allowed to have reasonable wear and tear without deduction.

“Wear and tear is not an exact definition, it’s a term of art,” Perry said. “It depends on how long they’ve been there, six months or ten years.

“Owners, especially for high end apartments, are going to want to freshen the units up for a new tenant, but he cannot charge a tenant for that freshening up,” Perry added.

It’s all a part of the profit motive, Zanger said. Like other landlords, Jones’ “direction is to get the maximum amount of profit, and he’s not really concerned about who he has to hurt,” Zanger said.

Tonia Jones, a former tenant of the 48-unit Sorrento, also was guaranteed a full deposit refund after a walkthrough inspection. Frustrated by over a month of silence, she confronted then JSM Management president Scott Collier.

“I physically had to go up there and argue with them to get my money back, and I only got part of it back,” said Jones, after being told $250 was deducted from her deposit. “They’re wrong for doing this.”

Collier told her the money was being deducted for painting the apartment, which she said was spotless when she moved out.