Renter Alleges Top Landlord Systematically Cheats Clients

Attorneys have filed a class-action lawsuit against one of Orange County’s largest apartment building owners, charging that the company unfairly retained security deposits for unnecessary cleanups and repairs.

The Orange County district attorney’s office has been investigating the claims against Arnel Management Co. for several months and has concluded that potentially thousands of tenants could be due refunds.

Prosecutors filed a consumer-protection lawsuit against Arnel with the hope of obtaining refunds for wronged tenants. But Dist. Atty. Tony Rackauckas ordered that the lawsuit be withdrawn so officials could seek an out-of-court settlement with the company.

Former tenant Terry Wiesner said he filed the class-action complaint Tuesday out of frustration at the lack of resolution in the case.

Wiesner also said he was concerned about the relationship between Rackauckas and the wealthy developer who owns the company. Arnel is run by George Argyros, one of the district attorney’s political allies. His company donated $1,000 to Rackauckas’ campaign in 1998.

Tori Richards, a Rackauckas spokeswoman, declined to comment on what impact, if any, the civil lawsuit would have on the office’s consumer protection case against Arnel.

“I can’t say anything because we’re in the middle of negotiating this,” Richards said.

Rackauckas has said that he wants to settle the case rather than pursue the lawsuit to avoid what he said would be an expensive trial that could take years to resolve. By settling the case out of court, he said, tenants would receive their refunds at the earliest possible time.

Neither Arnel officials nor the company’s lawyer could be reached.

Wiesner’s lawsuit seeks the return of his $500 deposit and another $460 Arnel later tacked on in cleaning fees and penalties through a collection agency.

Wiesner said he carefully cleaned up before moving out of his $1,325-per-month unit at the Cape Apartments near South Coast Plaza in 1998.

Later, Wiesner said, Arnel served notice it was keeping the deposit and billing him an additional fee to cover the cost of new carpeting, paint and cleanup. When he refused to pay, Arnel sent the case to a collection agency, which in turn put a negative reference on his credit report, Wiesner said.

By law, normal wear and tear costs cannot be withheld from renters’ deposits. Wiesner said the company has repeatedly refused to return his deposit.

The class-action lawsuit seeks the recovery of security deposits for Wiesner and any other residents of apartments managed by Arnel.

The lawsuit seeks additional penalties for senior citizens or disabled tenants. It does not seek punitive damages, said one of Wiesner’s attorneys, Christine Cupino.