1090 – Depreciation and Wear Analysis – California Carpet Lifespan Rule & Legal Deductions

Lowes pricing example for Believer Shadow Gray 88¢ per sq ft carpet material used in fraud analysis

This exhibit applies California Civil Code §1950.5(e) and Department of Consumer Affairs guidelines to the Ly Construction invoice (Exhibit 1087) and move-out clearance form (Exhibit 1084). The $7,835 “carpet replacement” charge claimed by Phat Tran and Berkshire Hathaway violates statutory depreciation limits and established wear-and-tear law.

Applicable California Standards

Carpet lifespan: 5–10 years under normal residential use (CA DCA, “California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities,” pg. 43).
Wear and tear: Landlords cannot charge for ordinary deterioration over time (Granberry v. Islay Investments, 9 Cal. 4th 738 (1995)).
Damage vs. depreciation: A deduction is only permitted for extraordinary damage caused by negligence, not normal use (Cal. Civ. Code §1950.5(b)(2)).
Replacement deduction formula: (Age ÷ Useful Life) × Replacement Cost = Allowable Deduction.

Depreciation Calculation Example

Carpet Age vs. Allowable Deduction
Category	Value
Original Carpet Installed	May 2022
Vacate Date	May 2024 (24 months later)
Useful Life (Residential Carpet)	5 years
Replacement Cost Claimed	$7,835.00
Depreciation (24 / 60 months = 40%)	40% used lifespan, 60% value remaining
Allowable Deduction (if valid damage proven)	$3,141.00

Even if actual carpet replacement were justified—which photos (Exhibit 1089) prove it was not—the maximum lawful deduction would be approximately $3,141, not $7,835. This excessive billing represents a 150% overcharge beyond statutory limits.

Fraudulent Billing Indicators

No inspection report or photographic proof of damage per Cal. Civ. Code §1950.5(f).
Owner’s invoice lists new vinyl flooring, not carpet replacement (Exhibit 1087).
Charges disguised as “repair” when actually capital renovation for Airbnb conversion (Exhibit 1088).
No receipts or third-party bids to substantiate replacement cost, violating Cal. Civ. Code §1950.5(g)(1).

Legal Summary

The invoice and clearance report constitute deliberate overbilling and false documentation. Under Granberry v. Islay Investments, landlords may not retain deposits or assess damages for normal use or depreciation. The inflated billing amount and replacement type (vinyl vs. carpet) demonstrate a calculated attempt to convert tenant funds and defraud the court.

Corroborating Exhibits

1084 – Move-Out Clearance Report: Shows rent and false carpet charge.
1087 – Ly Construction Invoice: Labor and materials for remodel, not restoration.
1089 – Market Price Comparison: Establishes $0.88/sq.ft. market rate.
1088 – Airbnb Listing: Confirms capital improvement for short-term rental profit.

Conclusion

The carpet charge violates California depreciation law and reflects a pattern of overbilling and concealment of commercial remodeling. Even if wear occurred, allowable deductions would be minimal—proving that the $7,835 claim was an act of fraud, not lawful restitution.