I submitted an application and deposit+first month's rent for a small office space in Virginia. After submitting the application, I decided against renting it. However, the landlord's agent deposited the check anyway and is now claiming I'm bound by the application since they accepted it. Am I bound? Help?

At the top the application says, "This Rental Application is an offer to rent. The Deed of Lease is a legally binding contract."

The "offer to rent" part is as follows:

"OFFER TO RENT
(Applicant 1) and (Applicant 2) offer to lease the property known as __, Virginia (“Premises”), for ___years/months beginning , for the monthly rent of $___ payable in advance on the first day of each month.

CONDITIONS
A NON-REFUNDABLE PROCESSING FEE OF $ per Applicant is included with this application. Processing may take up to 5 business days to complete. AN EARNEST MONEY DEPOSIT OF $ (“Deposit”) is included and will be held by. If this Application is accepted, the Deposit will be credited to amounts owed to the Landlord. If this Application is not accepted, the Deposit will be refunded to the applicant(s) less any additional documented processing charges.

Occupancy is subject to possession being delivered by the present occupant. The property is accepted “As Is” unless otherwise noted below or by attachment." "

Here are the "terms" in the application:

"APPLICANTS AGREE AND UNDERSTAND THAT:
1. This Application, each occupant and each pet are subject to acceptance and approval by the Landlord.
2. The Listing Company is obligated to present all Applications to the Landlord until the Lease is signed.
3. Landlord and Landlord’s Agent may rescind acceptance and resume marketing the Premises at any time until
the Lease is signed.
4. Proof of current income is required. For example:
􀂃 Latest Pay Statements/Stubs
􀂃 Last 2 years’ Form W-2 for hourly or weekly pay persons
􀂃 Last 2 years’ Form 1040 and Schedule C (if applicable) of self-employed or persons with tip income
􀂃 Copy of LES and orders for military
5. This Application consists of four pages which must be completed in full. Incomplete or missing information
will result in delay of a decision. Willful misrepresentation may be grounds for invalidating a Lease.
6. A draft of the proposed Lease may be reviewed through the Listing Broker. If Landlord and Applicant cannot
agree on terms, the deposit will be refunded.
7. Applicant must present valid photo identification or 2 forms of ID before signing the Lease.
8. The Applicant is responsible for obtaining property and liability insurance (Renter’s Insurance) and assuming
utility accounts where required before occupying the Premises.
9. Any move-in fees and utility deposits are the responsibility of the Applicant.
10. Only those persons listed in the Application are to live in the premises.
11. The Premises are not to be used for business except with full knowledge and consent of the Landlord and in
conformity with all applicable laws and regulations.
12. Applicant has no Leasehold interest until the Lease is signed."

You signed it, submitted it, paid deposit and rent... it's yours.

You signed it, submitted it, paid deposit and rent....it's yours.

Why? Seems like it's not final.

E.g. "6. A draft of the proposed Lease may be reviewed through the Listing Broker. If Landlord and Applicant cannot agree on terms, the deposit will be refunded."

Couldn't I start disputing terms of the lease, telling them I want this and that, and then say we can't agree?

You agreed to the terms by signing the application and putting down money. All that's left is for them to agree, which they have. You can't sign your end and then claim it's still open to negotiation unless they claim it is.

Someone that knows all the ins and outs of real estate law will be here to answer this better for you some time but the way I see it... you signed it... you made your deposit AND you paid a month in advance. That right there shows your intention to rent the property. Disputes and mind changing are supposed to be done before you go through all this.

And I do believe that disputing this and that isn't going to get you anywhere legally at this point.

-EDIT- I see Joy beat me to it.

Just seems strange that the landlord has an easy way out ("3. Landlord and Landlord's Agent may rescind acceptance and resume marketing the Premises at any time until
the Lease is signed."), but I don't. The last line, specifically, says I don't have a leasehold interest until the lease is signed. I haven't signed a lease yet.

I would say that because of number 12 in the Terms of the Application, you are a month-to-month tenant until the lease is signed. If you do not agree with the terms of the lease then I believe you can give them 30 days notice that the lease is unacceptable and no longer be obligated to them for rent after those 30 days.

Keep in mind that if you rely on this to get out of the deal there is a chance that they will sue you for the balance of the lease. But I feel that you would have a very good case in court since their Terms state that you do not have a leasehold until there is a signed lease. The language is somewhat ambiguous and contradictory to the other terms of the Offer to Rent and since they drafted that language, it would be construed against them.

Someone that knows all the ins and outs of real estate law will be here to answer this better for you some time but ...

Actually, it's more a matter of basic contract law. OP made an offer. If OP communicated revocation of the offer before landlord communicated acceptance, the contract was never formed. The deposit is not refundable, however.

On the other hand, if LL communicated acceptance before OP indicated that he (Names Phil; I assume he's a guy.) no longer wanted to lease, it's a binding contract.

You signed four pages of application, we are not seeing all of them.

If the terms of the lease have nothing additional, you can not object since you agreed to everything in the four pages of the application, Most applications will contain all the terms.

Also you can not object to any term that is standard law for the state.

You may try it, but you also may lose in court if they sue you, that is the risk you take

UPDATE:

Confession time: it was my wife who signed the application, etc. I just said it was me to simplify things, but I found out a key new fact.

Here's the timeline: She signed/faxed the application to them on 1/11. They e-mailed and said it was accepted on 1/17. My wife e-mailed them on 1/18 to say "I'm serious about this, but I need to look over the lease this weekend and I'll get back to you." She also said in the 1/18 e-mail that she would mail a check for February rent and a deposit, which she sent that day. (not good, I know). She e-mailed the landlord's agent again on 1/23 to say she changed her mind and wouldn't sign the lease.

[HERE'S THE NEW FACT] The landlord's agent then e-mailed her back the same day (1/23) and said "No problem." (actual quote)

Unless I'm mistaken, this is a repudiation or rescission by one party and an acceptance of that repudiation/rescission by the other. So even if there is an agreement to agree or some kind of month-to-month tenancy, they let her back out. Am I missing something?

One more question: they said they took the property off the market, could my wife be liable for any damages? If so, I'd think they'd be quite small since the property was maybe off the market for a week or two and has been vacant since last June.

I'd guess that the 'no problem' means they are keeping all the money you sent but aren't holding you to the lease terms. (I won't offer an opinion on the implications of that.)

Your new fact makes a big difference. There are two parts to this now--the Processing Fee and the security deposit.

The landlord is entitled to the Processing Fee since the Application stated that it was non-refundable.

The security deposit was refundable if the Application was not accepted by the landlord. If the landlord accepted the Application then the security deposit would be credited to amounts owed by tenant to landlord. Since the tenant has rescinded the Offer to Rent and the landlord has accepted by email, the tenant does not owe anything to the landlord and the whole amount should be refunded.

This is the legal aspect. As for the practical aspect, the landlord is not going to get anything more out of you without filing a lawsuit. You will probably not get the security deposit without filing a lawsuit. If the landlord files, you can file for the security deposit as a counterclaim. If the landlord doesn't file, do you want to file your own lawsuit for the security? If you do you run the risk of having the landlord file a counterclaim for the balance of the lease.