Legal Question in Real Estate Law in California
question about starting a business
I am thinking about starting a
business where I would take over
the burden of renters trying to
reclaim their apartment deposits.
Could I legally act as their
representative in dealing with
apartment managers in an effort to
reclaim their deposit? What
problems could I run into and is this
a viable business idea?
2 Answers from Attorneys
Re: question about starting a business
You can not give legal advice as the State Bar Association might eventually go after you. But how will tenants know of your service unless you do give the legal advice on getting back security deposits; I do not know if that would be considered practice law [you can call the State bar up in S.F.] since you are merely telling they what a particular code section states.
The big problem is whether it is worth it. You can not represent the tenant in court, so all you are offering is to meet and talk with the client [30 minutes], look at the place to see if there is abnormal damage [hour including travel time], negotiate with the landlord on how much he/she will give back [90 minutes with all the calls and not getting through at first]. So you might spend 3 hours per case. If the rent deposit was $1,000 and you charge a 20% recovery fee, you are getting about $65 per hour. If your overhead is 33% [no employees] you would make $42 an hour. For that return it would be worth while, but the above are guesses. Why don't you try it out with a few tenants and see how long each one takes? If you are successful, eventually you will have competition.
Re: question about starting a business
I would agree with Mr. Shers.What leverage would you have or what value could you provide if you cannot argue the legal merits of your clients case. Why would the Landlord pay you without a legal justification for payment.