A question as to the legality of “move in-move out” fees is commonly asked of me. These fees are different than a security deposit commonly required of a tenant in a landlord-tenant situation. But they are commonly confused.

A “move in-move out” fee would be nonrefundable. A security deposit is held during the term of tenancy and at the end, is returned, or partial amounts are returned, if charges for cleaning, damages or the like are deducted.  A landlord must show receipts for deductions when they exceed a specific amount. The statutes for these landlord-tenant laws start at Civil Code Section 1940 (which can be located at the California State Government website).

Condos and HOAs in California are subject to the following statute that is part of the “Davis Stirling Act”:

Cal Civ Code 1366.1: “An association shall not impose or collect an assessment or fee that exceeds the amount necessary to defray the costs for which it is levied.”

Some attorneys believe that this statute precludes a “move in-move out fee” in a homeowners association unless the charge can be tied to a cost. Others conclude that if the provision is in the governing documents, it is legal. Governing documents include CC&Rs and rules of the association. There is a difference in these two documents. The CC&Rs are the recorded covenants and require owner approval to amend or change, and the rules are a document adopted by the board (not recorded) which are based on authority in the governing documents.

I believe that such fees could be found legal if challenged, if an association can demonstrate that there commonly are costs involved in “move in-move out” situations. Some HOAs and condo associations have to hire extra security, issue extra door or gate passes for movers, make special arrangements for parking, pad elevators and the like. Some claim that there commonly is damage to repair, such as nicked doors, sheet rock damage, cleanup related to the move. I think if an association were challenged on a move in-move out fee and could make a reasonable showing of common costs related to the moving process, the fee would be found to be justified. A judge could also look at it as a contractual agreement – the CC&Rs are a contract, rules are not.

For several reasons, I believe that if an HOA or Condo association charges a “move in-move out” fee, it should make sure that the charge is incorporated into its CC&Rs or other recorded regulatory agreement as these documents tend to qualify as contracts. I believe an HOA or Condo Association that added these kinds of fees to rules, without specific mention in the CC&Rs – could run into trouble justifying them. However, many bylaws do allow HOAs and Condo associations to charge fees for use of the common area, and moving certainly involves use of the common area, often involving extra wear and tear on the roads, streets, sidewalks, hallways and elevators. So a judge could conceivably uphold them if the bylaws allowed for the imposition of fees.  

Then the question arises as to whether boards can charge these fees only in the case of a tenant move in, or whether they would have to act consistently as between owner moves and tenant moves. Again, I think it comes down to a matter of what the HOA or Condo association can offer in the way of justification to a hearing officer.

A reader has asked this followup query:

“Now I’m trying to figure out whether this prohibits that move-in fee and alternately, whether a renter can invoke section 1950.5 against an HOA trying to impose the equivalent of a non-refundable move-in deposit.”

I would say no. Why? Because a tenant has no direct legal relationship with an Association unless there is some “tie-in” clause in the CC&Rs or recorded document, or possibly the other governing documents (depending specifically on what the clause says). And one might suggest that the landlord could recite 1950.5 as a bar to an HOA or Condo “move in-move out” fee, however, the statute (recited below) applies as between landlords and tenants, not landlords-HOAs or tenants-HOAs.

I believe that an owner would have a more luck trying to make a  viable claim based on a theory of inconsistent treatment for non-resident owners if owners are not charged a move-in move-out fee also. But even then, it is fairly commonly understood that tenants, since they do not have the same “investment” interest in the real property which houses them, tend to be more careless in their behavior. And an HOA or Condo board might be able to document or support this theory with historical data.

Here is the Civil Code relating to the landlord-tenant law on security deposits (note distinguishable from “move in-move out” fees.

"1950.5.  (a) This section applies to security for a rental agreement
for residential property that is used as the dwelling of the tenant.
   (b) As used in this section, "security" means any payment, fee,
deposit or charge, including, but not limited to, any payment, fee,
deposit, or charge, except as provided in Section 1950.6, that is
imposed at the beginning of the tenancy to be used to reimburse the
landlord for costs associated with processing a new tenant or that is
imposed as an advance payment of rent, used or to be used for any
purpose, including, but not limited to, any of the following:
   (1) The compensation of a landlord for a tenant's default in the
payment of rent.
   (2) The repair of damages to the premises, exclusive of ordinary
wear and tear, caused by the tenant or by a guest or licensee of the
   (3) The cleaning of the premises upon termination of the tenancy
necessary to return the unit to the same level of cleanliness it was
in at the inception of the tenancy. The amendments to this paragraph
enacted by the act adding this sentence shall apply only to tenancies
for which the tenant's right to occupy begins after January 1, 2003.
   (4) To remedy future defaults by the tenant in any obligation
under the rental agreement to restore, replace, or return personal
property or appurtenances, exclusive of ordinary wear and tear, if
the security deposit is authorized to be applied thereto by the
rental agreement."
Your comments are welcome. I do not have a case to offer you on this
topic to provide definitive authority.
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