Aljabban v. Fontana Indoor Swap Meet, Inc.
Facts: A tenant rents a stall in a swap meet under an occupancy agreement. The agreement authorizes the landlord to use the security deposit to cover unpaid rents. At the end of the term of the occupancy, the tenant vacates the space and removes trade fixtures they installed on the property to conduct their business. The landlord incurs expenses repairing the damage caused by the removal and deducts the costs from the security deposit.
Claim: The tenant seeks the return of the full security deposit, claiming their security deposit was improperly withheld since deducting the cost of repairs as an expense from the security deposit is not authorized by the occupancy agreement.
Counterclaim: The landlord claims they properly deducted the costs of repairs from the security deposit since they incurred the costs as an expense due to the tenant’s removal of their trade fixtures on vacating the space.
Holding: A California appeals court holds the tenant is entitled to a full refund of their security deposit as it was improperly withheld since the occupancy agreement did not authorize any withholding of the security deposit for the purpose of repairs. [Aljabban v. Fontana Indoor Swap Meet, Inc. (August 18, 2020) _CA6th_]
