One of San Diego County's largest apartment landlords, Essex Property Trust, has agreed to pay $19.25 million to settle a class-action lawsuit accusing the company of wrongfully withholding tenant security deposits. The deal covers former renters who say the company charged them for repairs that were inflated, never performed, or billed using internal paperwork instead of real contractor invoices.
Essex owns 47,874 apartment units across California, including 5,311 units in San Diego County, according to internal company documents cited by Times of San Diego. Former tenants filed the class-action lawsuit in San Diego County, alleging the company violated state law by refusing to properly return security deposits. The outlet reported the settlement and found that the case centered on how Essex documented — or failed to document — the deductions it took out of tenants' deposits before sending back whatever was left.
According to the complaint, Essex used internal purchase orders to charge tenants for repairs, deep cleaning, painting and other services rather than relying on outside vendors. California law requires landlords to provide tenants with actual invoices from third parties to justify those deductions, and the complaint also accused Essex of inflating the costs listed on the third-party invoices it did produce.
Carpet Bills and Painting That Never Happened
The gap between what Essex billed and what work actually cost shows up starkly in one case cited in the lawsuit: the company charged a San Fernando tenant nearly $2,000 to replace carpet, even though a contractor invoice for the same job listed just $907. The complaint also alleges Essex charged tenants for work that was never performed at all.
In another instance detailed in the suit, Essex sent a Form 15 tenant in downtown San Diego a move-out statement charging $550 for painting. When the tenant called to ask about it, the company told her it had no record of the painting work ever being done, per the complaint. The same tenant was also billed for carpet cleaning despite her apartment having concrete floors, according to the lawsuit.
A Law Firm With a Track Record Against California Landlords
Tenants in the case were represented by attorney Jimmie Davis Parker of the firm Robinson & Parker, which specializes in security deposit class actions and has recovered more than $27 million for tenants in separate lawsuits. The firm has previously brought cases against Los Angeles billionaire developer Geoffrey Palmer, MG Properties and San Diego-based Willmark Communities — among them a $12.5 million settlement with Palmer's GHP Management negotiated in 2022, a $9.8 million settlement with MG Properties covering 80,000 California renters, and a $4.75 million settlement with Willmark Communities, according to RMP Litigation.
Parker said the Essex settlement would return money and provide debt relief to more than 200,000 former Essex Property Trust tenants. He added that former Essex renters represent only a small fraction of Californians vulnerable to improper security-deposit withholding, and that challenging an improper deduction individually can cost more than the amount at stake — giving powerful landlords an unfair advantage. “Class actions give tenants the ability to stand together and obtain relief they could not secure alone. Powerful landlords have to follow the law, and when they don’t, they have to pay,” Parker said, according to the same report.
State Law Sets Strict Limits on Deductions
Under California Civil Code Section 1950.5, landlords must return a security deposit balance or provide an itemized accounting within 21 calendar days of a tenant moving out. For cleaning or repairs performed by a landlord or an employee, they may provide a description of the work, time spent and hourly rate instead of third-party receipts or invoices, according to FindLaw. Landlords found to have withheld deposits in bad faith can also face statutory damages up to double the deposit amount on top of actual damages, per the Santa Clara County Superior Court.
The Essex case is the latest in a string of California class actions targeting how major landlords handle move-out charges. Earlier lawsuits against GHP Management, MG Properties and Willmark Communities also resulted in settlements.
California lawmakers have also moved to tighten deposit rules more broadly. Assembly Bill 12, enacted in October 2023 and effective July 1, 2024, capped residential security deposits at a maximum of one month's rent for most California landlords, eliminating the previous cap of two months for unfurnished units and three months for furnished ones, according to the California Apartment Association.
Essex Property Trust, founded in 1971 and headquartered in San Mateo, is an S&P 500 real estate investment trust that owned or held equity interests in 259 apartment communities totaling more than 63,000 units at year-end 2025, generating $1.89 billion in annual revenue, per SEC filings. Times of San Diego reported that Essex's attorney provided a statement denying wrongdoing and explaining the decision to settle.
