Legal Question in Real Estate Law in California
We live in Burbank, California. Our lease agreement for the past 4 years includes language stating that if we break the lease by giving 30-day notice of our intent to vacate prior to the lease's expiration, we (1) forfeit our entire security deposit, (2) are required to pay one extra month's rent, and (3) are then responsible for one additional rent payment if they fail to rent the house to someone else within 30 days of our moving out.
Is the clause (1) to forfeit our entire security deposit enforceable in California?
Our research seems to indicate that the other two penalty clauses (2)(3) would be enforceable, but that the security deposit is treated differently by the State, perhaps regardless of the terms of the signed lease agreement.
Thank you in advance.
2 Answers from Attorneys
You are correct. Breaking the lease is not valid grounds for keeping the security deposit. Civil Code section 1950.5 sets forth the law regarding security deposits. You can read that statute here:
http://law.onecle.com/california/civil/1950.5.html
Not only is (1) not enforceable, (2) is questionable. Your forfeiture is limited to the landlord's actual loss after diligent effort to re-rent - which is lost rent and out-of-pocket re-renting costs such as advertising. If the landlord re-rents in four or five days to someone who was on a waiting list, his losses would be much less than one month's rent.
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