Arnel Management Co. has agreed to settle allegations that it illegally withheld security deposits, California's attorney general announced Friday.
The move came nearly eight years after The Times published detailed reports from tenants who alleged that a major landlord in Orange County charged hundreds of dollars for unnecessary cleaning and repairs even when residents left their units clean.
“For many renters, especially those from low-income backgrounds, saving a security deposit involves a great deal of sacrifice,” Atty said. Gen. Rob Bonta said in a statement. “We hold Arnel responsible.”
Arnel has 19 apartment complexes in Southern California, all but one of which are in Orange County. The other is in Los Angeles County.
In 2016, the company — then owned by billionaire political power broker George Argyros — was the fifth-largest landlord in Orange County.
It is not clear what Argyros' current role with Arnel is. The company and its attorney did not respond to messages seeking comment.
Under California law, landlords cannot hold a deposit to clean an apartment left in the same condition it was in when the tenant moved in, or to pay for repairs for normal wear and tear.
According to the prosecutor, Arnel charged for unnecessary cleaning and repairs and treated a portion of the tenant's security deposit as non-refundable regardless of the condition of the apartment.
Friday's announcement was not the first time Arnell has faced similar allegations. In addition to the tenants The Times spoke with in 2016, Arnell settled allegations that it illegally withheld security deposits in 2001.
The state's office took over the case after Orange County. Atty. Tony Rackauckas — who accepted campaign money from Arnell — was widely criticized for taking a personal role in his office's investigation.
This settlement paved the way for Argyros to become ambassador to Spain, an appointment that foundered amid controversy.
As part of the new settlement, Arnell must pay $1.15 million, with $650,000 going to legal aid organizations in Orange and Los Angeles counties. The district attorney's office also said Arnell “will be subject to more stringent restraining conditions to deter future misconduct.”
