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Understanding your rights in regards to your security deposit
Q: Can an apartment owner cash a security deposit BEFORE approving you for the apartment? This has happened to me. I gave them my deposit and the management cashed the check 2 weeks later and I still was not approved. I then withdrew my application. It has been over 3 weeks since I backed out of that contract and I STILL have not received my deposit from this company. Do I have a case against them?
Amy
Q: Can a landlord keep your money if both parties named on the lease have not signed the lease agreement? Instead, both parties backed out of the rental four weeks prior to when the lease was to start without having signed the lease agreement? Basically, I looked at an apartment with my boyfriend and they called to tell us we had been accepted. My boyfriend went to sign the lease agreement, and then he brought the lease home for me to sign. It had a no pet clause, but I have a pet. So I would not sign the lease. I told the manager 4 weeks in advance. I had already sent them my deposit and first month's rent. They sent the first month's rent of $575 back. However, they kept the deposit. Is this legal without all parties having signed the lease?
Wendy
Q: My husband and I were shown a two bedroom, two bath apartment. We didn't find out until two days prior to our move that the actual apartment the manager gave us was a two bedroom, one bath apartment. It was filthy. Wires were hanging from the walls and the carpets were black. The tile near the front door was curled up. I asked the management if they were finished with the apartment. They said yes. We refused to move in and requested our security deposit back. They refused to give it back and said it was a good faith payment. I told them that since they didn't provide a service they should give us our money back. They still refused to give the deposit back.
Aisha
A: Hey, gimme my deposit back! From the questions I've received lately, you'd think the conniving Survivor Rich had formed a new alliance with rental managers. So, here are some guidelines for making sure you don't get caught like these people did.
First, remember what your deposit is buying. Typically, the deposit is a "holding" deposit. Once the owner or manager has your deposit, they probably will not show the rental unit to anyone else. They expect you to move in shortly and they're holding the unit for you. They're passing up any opportunities they may have to rent it to someone else prior to the time you actually sign a lease.
Ideally, the management will only charge a small application fee between $25 and 50 while they check your credit and your references. Once they approve you as a tenant, then you and the manager can sign a lease and you can put down a deposit. Often, this deposit becomes your security deposit when you move in.
However, depending on the rental market where you're looking, the manager may require you to put down a deposit at the time you submit a rental application. So, you may not even know whether the manager will approve you as a tenant yet. (If you have a spotty rental history or a troubled credit record, you might want to think twice about putting down any deposit you can't afford to lose before the manager approves you.) In this case, you don't have a written lease agreement to protect you yet.
If you simply pay the manager a deposit, at most, you have a verbal agreement with the manager about the deposit. And, if you don't discuss when and if you will get your deposit back, you don't have a very good verbal agreement. Even if you do, it's just your word against theirs in a courtroom.
So, if you put down a deposit before the landlord and you sign a written lease, you should get something in writing that states the terms of the deposit. A simple receipt and deposit agreement will do. This agreement should state:
1) the amount of the deposit,
2) the amount of time the landlord will hold the rental unit with the deposit,
3) what the deposit will apply to once you sign a lease, and
4) what circumstances will entitle you to get all or part of your deposit back.
In some cases, the landlord may want to charge a reasonable daily rent for each day the unit is held for you. You will simply have to negotiate this with the landlord. The receipt and deposit agreement should spell this out. When will you get your deposit back? Will you get it back only if the landlord doesn't approve you as a tenant? Or, will you get it back even if you just decide you don't like the place. If the unit needs significant repairs, you may want to spell out the landlord's duty to make them in the receipt and deposit agreement.
Before you put down a sizable deposit, you should make sure you really want the unit and read the landlord's standard lease. Does it meet your needs? Does it allow your pets? Does it have adequate parking? Is the unit or complex in good repair?
Finally, if the landlord refuses to refund your deposit, don't be afraid to stand up for your rights! Write a clear letter to the landlord explaining why you should receive a refund of your deposit. If the landlord still refuses, file a claim in small claims court if you feel you've been wronged. Some states, like California, require the landlord to pay a small additional penalty of a few hundred dollars if your deposit is wrongfully withheld. So, small claims court may be worth your while. |
