The Coast News Group
A photo taken by renter Lance Klug documenting the condition of his rental home in Oceanside. The property is managed by California Realty Group. Courtesy photo
A photo taken by renter Lance Klug documenting the condition of his rental home in Oceanside. The property is managed by California Realty Group. Courtesy photo
Cities Community News Oceanside San Marcos San Marcos Featured

Renter claims he was scammed by local property management group

SAN MARCOS — A San Marcos resident is taking a property management group to small claims court after he claims the company unfairly withheld his security deposit, deferred maintenance requests and broke California tenant laws.

Lance Klug and his family moved from the state’s Central Valley to San Diego in Sept. 2020 and decided to rent a house in Oceanside while preparing to buy a new home.

The house, which Klug found listed on Trulia, is managed by California Realty Group (CRG), a property management group based in Temecula that manages homes throughout Southern California.

Klug and his husband had to put down a $5,100 security deposit to secure the home, and, because it was during the peak of the COVID-19 crisis, they couldn’t physically tour the house beforehand.

“The pictures that we saw of the property were a little older, but they said that the renter was going to be moving out and they were going to be cleaning the place and repainting the place… they also said [they] can replace the carpet, so we were all set to move in on Sept. 11th, 2020,” Klug said.

Once moved in, Klug’s family found that the property was not clean and was run down with years of deferred maintenance. The home was in need of numerous repairs, and the move-in report failed to mention any of it, according to Klug.

Renter Lance Klug took a photo of a window sill upon moving into an Oceanside rental home managed by California Realty Group. Courtesy photo

In an email correspondence with the CRG, Klug wrote:” I’m just going through the move-in report now and I’m a bit confused by all of the stuff that was missed. Lights that don’t (work) we’re marked good. Broken vanity lights in two of the three bathrooms are obviously broken and hanging — marked good. The fridge — which includes a side bun that was glued and taped and fell off once we put condiments on it — was marked good. Screens that had half-inch gaps on the side because they’re too small for the window we’re marked good. Blinds falling off and caked with dirt — marked good. The list goes on, and nothing is marked as “needs repair” — even when your inspector noted there were holes in the screen.”

Klug documented and took photos of the broken appliances and items in the house and immediately contacted CRG, but the group continued to postpone maintenance for 6 or 7 months, said Klug.

“My primary concern was about how this was going to be handled in the move out because by this time, I kind of figured… that they were going to try to have us pay for updating this house, which is eventually what happened,” Klug said.

In September 2021, Klug and his husband moved into their newly-purchased home in San Marcos.

“We talked to our neighbors around the rental property… and they all said this homeowner and this company is notorious for nickel and diming people on the move-out,” Klug said. “We spent days and hours cleaning the property and we took pictures of every single inch of the property after we cleaned.”

“They had like 21 days from move out to give our security deposit back… and about 20 days after move out, they sent us an invoice saying that they were going to be keeping roughly half, $2,500, of the security deposit,” Klug continued.

This amount included $2,000 to replace a more than a 20-year-old stove that was already run-down and damaged before they moved in, which Klug had documented with photos that he sent to CRG early on.

According to California’s tenant law, “the landlord can withhold from the security deposit those amounts that are necessary and reasonable… And the landlord cannot use the tenant’s security deposit to repair problems that existed in the unit before the tenant moved in.”

Klug also provided email correspondence to The Coast News, in which he reached out to B&B Appliance to confirm the invoice that CRG provided regarding the stove, but B&B said the invoice did not come from them.

“I contacted CRG and sent them this email confirmation that they provided me with a fraudulent invoice,” Klug said. “Their deal is they just don’t get back or don’t respond to questions about anything and just kind of ignore any proof or evidence… they finally emailed a week or so later, and said ‘it turns out that the stove repairs are only going to cost $550,’ never addressing the fraudulent invoice that they provided to keep two grand instead of $550.”

Yelp reviews about CRG show dozens of similar stories of people throughout Southern California who were previous tenants of the company.

“They will keep your money and refuse to negotiate, and they break California tenant laws, happened to us on more than one occasion,” said Kasie from Murrieta in a Yelp review.

“Proceed with caution if your desired rental property is managed by this company. They will price gouge you and try to keep as much of your security deposit as possible,” said Adam B. in a Yelp review. “They have poor communication, slow repair times, but worst of all they will steal your deposit.”

Klug has since been reaching out to city leaders, the Better Business Bureau and local news outlets to try to spread the word about CRG’s practices, including State Sen. Brian Jones (R-Santee), whose district office has offered resources to Klug.

“Each year our office helps thousands of individuals, families and businesses in East and North County cut through red tape, resolve disputes and solve problems,” Jones told The Coast News in an email. “Since the COVID-19 pandemic began, probably over 90% of those cases involve unemployment benefits, EDD or government loans, but some, such as Mr. Klug’s case, are often just finding the right agency that has jurisdiction over an issue and helping our constituent break through the voicemail to reach a human on the other end of the phone.

“I appreciate media outlets like the Coast News Group for highlighting Mr. Klug’s story as I am sure it is not the first and not the last of this type that we will hear. California has the first of many unwanted titles including being dubbed unaffordable because of the Democrat politicians’ bad policies that tend to burden our middle-class families. Hard-working individuals like Mr. Klug deserve to know that government is working for them, which is why my staff and I will continue to monitor his case to ensure that it is resolved. I proudly represent Senate District 38 and the most rewarding part of my job is being able to help my constituents resolve these issues so they can get back to focusing on their lives, family, job or business.”

Klug eventually decided to take the matter to a small claims court.

“We don’t necessarily need the money to survive, I’m just thinking of all the people who do, and I’m a little outraged that this company kind of keeps getting away with it,” Klug said.

California Realty Group could not be reached for comment after multiple attempts by The Coast News.

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