My wife and I came very close to renting an apartment, but did not sign the lease after experiencing some hostility and evasiveness from the (first time) landlords. When we handed in our application, one of the landlords asked for a deposit (though no stipulations were made), and she let my wife decide on the amount. My wife gave her a check for $500. Later, after a lot of hassle getting an answer (on our credit approval, etc) and deciding on a date for the lease to start, we felt extremely uncomfortable and backed out. At one point, the landlord even said on the phone, "If you want, you can just keep your money and forget it." The deposit check was never cashed/deposited. After I told them in person that we were not going to sign the lease, we canceled the check. She is now sueing us for two months rent and the deposit (which she called a "bad check" in the suit). Does she have any legal grounds on getting any of this money? Does she have a right to get the deposit money, even though she never deposited the check? :confused:

Hello under:

If you came close to renting it, then they came close too. That means that it was OFF the market during that time. They took it off because of what YOU did. The deposit is a reimbursement for the losses they incurred because of your promise that you did not fulfill.

Therefore, they're entitled to a months rent, even if you didn't sign a lease. If $500 doesn't cover the rent, you'll owe the difference. If it does, they owe YOU the difference.

You'll also owe for bank charges due to your stop payment. Not depositing the check has nothing to do with anything. Writing the check, on the other hand, DOES.

excon

Did you actually sign a lease? You do have a verbal statement from the would-be landlord to just "keep your money and forget it." Based on your post it sounds like she really doesn't have a case against you. You'll have to go to court to answer the complaint or risk having a default judgement entered against you. Just deny that you have any liability and tell the judge all the details.

Wow, are you a landlord? That sounds pretty draconian that because someone came CLOSE to renting, never signed a lease or even got anything in writing that says anything is owed, that they somehow owe a whole months rent? We live in California, and a months rent is 3/4 of my paycheck. The check my wife wrote has nothing on it to prove it was even a deposit. If no services were rendered and no contract was signed and no stipulations were laid out, what legal precedence is there for someone to owe back money after a check is canceled under these conditions? What about the fact that these people were hostile and evasive from the time we filled out the application? What about the comment she made, "...you can keep your money and forget it?"

Of course we're going to court. I've already arranged to take the day off work. I think the landlord is using this as a scare tactic. Her son is a lawyer, though California small claims courts forbid legal representation in the courtroom. No, we did not sign a lease. I'm not sure how things work in small claims court (burden of proof, evidence, etc) but my wife and the landlord were the only ones privy to the conversation where the landlord made the abrupt remark about keeping the money and forgetting it. When its one persons word against another, how can she win this? As far as liability, I'm just wondering what legal precedence or civil laws there are about a check being given and then canceled when no services are rendered, and no contract has been signed.:o

I know you don't want to hear this but I have to (mostly) agree with excon. You filled out an application and provided a deposit. The purpose of a deposit is so that the landlord will hold the apartment for you and not rent it to someone else.

Did the application say anything about the deposit being non-refundable? If so then you are definitely out of luck. If the application did not mention the deposit, and if there was nothing that said it was non-refundable, then you may have a chance at winning in court but I wouldn't count on it. I think you will be held liable for the amount of the deposit. I don't think you'll be responsible for any rent since you never signed a lease. But the deposit is intended to compensate the landlord for the time that the apartment was off the market.

Hello again:

I'm not the issue - the law is.

I tried to explain to you how the landlord was damaged by you. You're not buying it. Fine.

In the real estate world, what's written is what counts. The only thing written in your case is your wife's check which is stamped with a big "stop payment" across it. They don't need to prove it was a deposit, because it clearly WAS a deposit. You weren't buying ice cream from them. Your wife clearly wouldn't have written it, if she didn't want the apartment held for you. When it's taken off the market and held, that's an agreement to rent.

In the absence of a written agreement, you are a month to month tenant. The landlord is entitled to a 30 day notice. You gave that notice when you refused to move in. The landlord IS entitled to his months rent.

Hostile and evasive doesn't change the contract you had with them. Maybe you should have investigated them further.

What about her comment?? I'll bet when she get's to court, she's going to deny she said that. Then it will be a he said, she said, and you can't win. I know you don't think you had a contract with them, but your wife having written her check confirms that you DID.

All the above is so. A judge is going to know it's so. It's fine with me that you don't.

excon

A few things:
1. The word "deposit" was never actually used (in writing or in verbal agreement). She said she wanted a check, and lket us decide on the amount. We felt it was our way to show we were serious. No where (including on the application) did it say that a deposit was required and whether it is refundable or nonrefundable. It did say a fee (max of $30 in California) was required for the credit check. She never asked for it and we didn't give it to her (yet). She never verbalized what the money was for and whether we would get it back. Perhaps you can assume it was a deposit and what it was for, but doesn't the burden of proof fall on her? Nothing was in writing, and she never cashed the check!
2. She said (hearsay, I realize) at one point when my wife tried to pin her down on a time we could sign the lease, "I dont want to start with you... if you want, you can just keep your money and forget it..."
3. I hate to throw in too many nonlegal details, but she never called us back on the days she said she would and she delayed the application and day we were supposed to sign the lease... we backed out because of our discomfort with the way she was treating us. We had given 30 days notice to our present landlord and already packed up all of our belongings in boxes. We interpretted the hostility we perceived from them as a sign that they DID NOT want to rent to us (We belong to different religious/ethnic groups, I don't want to get into it:( )... rather than sign a lease with people who don't like us, we backed out.

How can I be considered a tenant if we haven't moved in? If she decides to take it off the market that's her decision. Is there legal precedence or code to support this one months rent business you're talking about? I mean, in real estate there are things like "cooling off" periods so why would renting be such a hostile environment compared to buying a house? I'm not trying to get personal, I'm just trying to get answers and I don't know what your legal credentials are.:confused:

It doesn't matter that the word "deposit" was never specifically used. A court will say that it was a deposit. The landlord was offering a place to rent, you applied to rent that place and you provided a check. A judge will not decide that you were giving the landlord a gift. A judge will decide that it was either a deposit to hold the apartment, a security deposit, or a partial payment of the rent for the first month. If the judge determines that it was a security deposit or a payment towards rent then you may have a chance at winning. But as I said earlier, I wouldn't count on it.

Yes, it is hearsay. But it is allowable hearsay. A statement made by a party in interest, offered to prove the truth of the matter asserted, is an exception to the hearsay rule. It will help you. But if the landlord denies making the statement then it becomes "he said, she said".

This may help you, if (1) the judge allows you to say all of this, and (2) if the judge is having a good day.

Hello again:

I'm an exconvict. I have no credentials. On the other hand, I've answered thousands of questions right here on the real estate board. If I was so bad, they'd have thrown me out of here by now.

But, LisaB IS a real estate attorney.

She and I don't agree exactly on this issue either. We DO agree, however, that your deposit is forfeit.

My legal stance is that when you agree to rent, as you did when your wife proffered the check, you agreed to a month to month rental since you DIDN'T sign a lease for a longer rental.

Lisa doesn't think you rented it for the month. I'll acquiesce to her legal expertise.

excon

PS> Uhhhh, no there ain't no cooling off period. Maybe you should read the landlord tenant law for the state you're talking about. We have a copy right here at the top of the real estate page on a "sticky note".

Just to clarify my reason for disagreeing with your normally superb advice, I don't think the OP became a month-to-month tenant because the landlord never delivered possession of the apartment. This would be in the form of a greenie but I have to spread it around some more. :)

OK, now this is info I can use. Thanks. In legal terms, is a deposit check a contract? I mean, of course, any reasonable person would conclude it was a deposit check. But is person legaly BOUND to fork over that money? I've been reading a lot about contract law and leases, etc. Everybody says you are SOL if you sign a lease and back out, but no one seems to address the situation where you never signed anything. A check given without stipulations, conditions or guarantees that never went through... is it breach of contract or bad luck? In the eyes of the law? Or is it not that clear cut?:o

Good point. I though the excon thing was kind of a joke, but whatever. I'm just very frustrated and my wife is in tears. Real estate and tenant/landlord relationships were never this difficult before we moved to Calif. This place is crazy. I have every intention of going to court because, if no other reason, these people demonstrated a hostility and evasiveness that would make anyone pause before entering into a legal contract. Its obvious they're first time landlords... it took days to get an application, and extra days to get a credit check despite promises to the contrary. Unanswered phone calls and broken promises were the rule. I know there is no statute on rescission relating to leases, I was comparing my situation to someone buying a house.

Basically, by giving the landlord a check you created an implied contract that you would sign a lease and accept the keys if your application was approved. The application was the offer, the check was consideration, and the landlord's implied promise to remove the apartment from the market and review your application was the performance that was contemplated.

If you had been offered a lease that was not acceptable to you, you could back out at that time but IMO you would not be entitled to the return of the deposit. That deposit was the consideration for the landlord removing the apartment from the market. That is something that is definitely recognized by the courts.

It doesn't appear that you were required to provide a deposit when you submitted the application. But if you hadn't, and if the landlord had rented the apartment to someone else while they were still reviewing your application, you wouldn't be entitled to sue the landlord for damages. Since you gave a deposit, if the landlord had rented the apartment to someone else while you were waiting for them to give you a lease you could have sued the landlord for your damages.

You keep saying that your check was given without stipulations, conditions or guarantees. But that's not true. The check was not a gift. It had a purpose. Its purpose was to induce the landlord to remove the apartment from the market and consider your application to rent. They did so. The fact that you stopped payment on the check constituted a breach of the implied contract I described above. It makes no difference that the landlord had not deposited the check yet.

Now it is possible that the judge will consider the check as an advance towards the security deposit or rent for the first month. If that happens then the judge will probably decide that you were entitled to the return of that money (if the check hadn't been stopped). If that happens then you should consider yourself lucky.

Hey... just be glad that you don't have those people as your landlords. Can you imagine how they would have acted if you moved in and then something broke?

Well, as long as we have a glimmer of a chance, I'm going to court. :o

You should DEFINITELY go to court. You can never tell what a judge will do.

Good luck!

There are two rental agencies here in the town I live in that require you to submit the deposit with your application. When and if your application is approved, then you sign the lease and they deposit the check. However, the judge here(this isn't California tho) says that just because you submitted deposit with the application, you did not agree to rent it. You agree to consider the offer if your application was approved. Just as the landlord did not agree to rent it to your just by accepting your deposit check. Most landlords who require an application to be filled out by the potential tenant and be approved, do not only accept one and wait to see if they are going to approve it or not. Most accept applications until a certain date, or until they approve someone, etc. Some require background checks, and depending on how they do those, it could take a few days. I couldn't imagine them taking one application and wasting a week of not taking applications waitting for that to come back.

Questions to consider(or I think anyhow) would be Did the landlord continue to accept applications? Did the landlord stop advertising the property? When did you back out? When was the lease due to start? Was it close enough to the end of your present lease that you had to move elsewhere because she had not ever given you a yes or no regarding your application approval? I mean you can't wait until December 31st to look for a place to live when your current lease is expiring at midnite that night. If she never got back to you within a reasonable period, I'd say you had every right to find another place.

However, when the landlord said "you decide on the amount of check you give me", that is where I would have walked away. What did the "would be" lease say the deposit amount was? Did you get a copy of the "would be" lease and know the terms/conditions before filing out an application? Or did they expect you to submit an application/deposit and then sign whatever lease they put in front of you?
Was the deposit a damage/cleaning deposit? Was it a security deposit? What kind of deposit were you making?

You said "after a lot of hassle getting an answer (on our credit approval, etc) and deciding on a date for the lease to start, we felt extremely uncomfortable and backed out..............After I told them in person that we were not going to sign the lease, we canceled the check. "

Did you ever get approval, start date, etc? Or did you just decide against it? What did they say when you told them in person you were not going to sign the lease? Did you ask for your check back since you told them in person? If so, did they tell you they were keeping it and cashing it?

excon knows his stuff no doubt about that. However, if a start date was never settled upon and you are considered a month to month tenant based on giving the check. Then only one rental period is the required notice to give that you are vacating. So, one could argue that by saying they are not signing the lease, that was the notice and since a definite begin date was not agreed upon, you could argue the start date was supposed to be Feb 1st, so by notifying the landlord a month prior you wouldn't be signing the lease, you gave the required notice.

Again, it would really depend on how the judge viewed the situation.

It is really hard for anyone to say what WILL happen. Everyone can only tell you what they BELIEVE will happen based on their knowledge, experience, etc. I know how the judge found in the case here because it involved a good friend.

In small claims it seems the outcome weighs more on the judge, the kind of day he is having, how each party strike him, etc than law. Now, I am NOT saying they do not have to follow law or that they ignore law. However, it seems that a lot of small claims are disagreements between two people who can't come to an agreement and there is really no law outlining the particular case and the judge is a 3rd party, non-bias, "Decision maker".

These are just my views on the situation, which don't count.

Good luck. Keep us posted.

Well, we had our court date and just received the ruling in the mail. We prevailed. :)
The plaintiff didn't get a dime. Basically, the would-be landlord was a complete blow-hard and I'm sure she was bluffing about her son being a lawyer... she was completely unprepared for the case. A lot of hand-waving and inconsistencies. We presented a concise and unbiased timeline of what occurred. Our argument was that: yes, we had intended to sign the lease but the behavior of the would-be landlords was so inconsiderate and erratic that we were not comfortable entering into a contract with them. The fact that we canceled the "security deposit" check after I told them we were not going to sign the lease did not seem to phase the commissioner (we didn't have a judge, but she reminded me of Judge Judy). The plaintiff violated all the rules of coolness during a court case: she made loud sighs and spoke out of turn, sneering and grumbling the whole time. We also provided evidence (a registered mail receipt) that despite our efforts to contact the plaintiff and settle out of court for the cost of the background check, she did not respond to us.
What I learned in all of this is that I believe the judge/commisssioner in a small claims case will quickly decide who is being the most honest and sincere, and give them the benefit of the doubt. Becoming emotional and failing to provide a logical case will have a major hurt on your outcome. Don't paint the other guy as being bad. I think the judge will appreciate brevity and clarity... they have to sit through lots of cases and get annoyed (I'm sure) by stuff that is more emotional than logical. Showing that you are a level-headed individual who was trying to do the right thing will help you tremendously. The fact that we tried to settle peacefully and not waste the court's time was worth the $5 registered mail letter. We knew she would ignore the letter, and that it would provide us with more proof of character (ours and hers).
I really pity the plaintiff: it doesn't pay to be mean and rude. One thing I've learned as a doctor is that after a complication occurs, patients are 250% more likely to sue a doctor with whom they did not have a friendly relationship with. Even when you screw up, if you take the time to be a forthcoming and polite individual, people will often give you the benefit of the doubt. Hope this helps someone else.