I am in California and my wife and I recently applied for a local apartment. Within a couple days the manager said that she would approve us and took a $200 holding deposit. We received that approval on July 20. We had agreed on a move-in date of August 7. On August 4, we visited the manager, looked at the apartment we would be renting, and finalized how much was due on the 7th to get keys. I received a phone call on August 6 from the apartment manager saying that they rejected our application and cannot rent to us.

The agreement to rent was verbal and the lease was to be signed on the 7th when we paid the balance due. We gave the 30 day notice to our current landlord on July 23, two business days after receiving the verbal approval. So now we are stuck with no place to live in 2 weeks. My wife called the landlord (rather upset) and the landlord stated that someone else applied for the apartment this week with a better credit score. We were told to pick our deposit up on the following Monday.

Can a landlord do this? My understanding is that when they accept a holding deposit, they may not accept other applications. Even without that fact, we had a verbal approval from the landlord dating two weeks prior to the call on August 6th. Do I have any recourse in small claims court to either force the landlord to honor the verbal agreement or compensate us for losses as we scramble to find storage and another place?

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Originally Posted by corvettekenny

I am in California and my wife and I recently applied for a local apartment. Within a couple days the manager said that she would approve us and took a $200 holding deposit. We received that approval on July 20. We had agreed on a move-in date of August 7. On August 4, we visited the manager, looked at the apartment we would be renting, and finalized how much was due on the 7th to get keys. I received a phone call on August 6 from the apartment manager saying that they rejected our application and cannot rent to us.

The agreement to rent was verbal and the lease was to be signed on the 7th when we paid the balance due. We gave the 30 day notice to our current landlord on July 23, two business days after receiving the verbal approval. So now we are stuck with no place to live in 2 weeks. My wife called the landlord (rather upset) and the landlord stated that someone else applied for the apartment this week with a better credit score. We were told to pick our deposit up on the following Monday.

Can a landlord do this? My understanding is that when they accept a holding deposit, they may not accept other applications. Even without that fact, we had a verbal approval from the landlord dating two weeks prior to the call on August 6th. Do I have any recourse in small claims court to either force the landlord to honor the verbal agreement or compensate us for losses as we scramble to find storage and another place?

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You can always sue and see how it plays out -

Without a signed lease it's her word against yours.

Was the rental contingent upon a favorable credit rating or were you given a 100% guarantee that you could rent the apartment? It would make a difference. If you were subject to a credit check and it came back unfavorable then the landlord should definitely have phrased things in a different way but she has every right to deny you the apartment.

I personally do not promise a unit or enter into a lease until the credit check is back.

There was no question in our minds that we were approved on the 20th. My proof to submit to court is a little thin. The manager could make the argument that we misunderstood her and started making decisions based on that misunderstanding.

Cut your losses and limit your frustration over this.

Be happy if you get your deposit back without further problems.

Why would you want to "force" yourself into living in this landlords property after having
To fight to get there?

How could you ever expect to have peace and happiness under these circumstances?

Hello:

Prog is right. I'd never live there. However, I certainly WOULD file a small claims lawsuit to reclaim your losses. I think you have a good case given the deposit situation...

However, one doesn't know how a court might rule in a situation like this. So, if it was me, I'd file and let a judge decide. It only costs about $100 to file a small claims suit and get it served. Who knows? You might win.

excon

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Originally Posted by corvettekenny

There was no question in our minds that we were approved on the 20th. My proof to submit to court is a little thin. The manager could make the arguement that we misunderstood her and started making decisions based on that misunderstanding.

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Was it contingent on a favorable credit report and was the credit report less than favorable? If it WAS - and I don't know - contingent and the report WAS less than favorable and you knew it (or should have known it, which is always the kicker) then I don't see you have a case.

Otherwise - I'd give it a try. Your word against the landlord's.

Shame on me for not getting a written approval before making plans.. The landlord said that she would approve us and that she had the final say (versus the owner). We were upfront about having a poor credit score and the landlord asked for a little extra deposit to cover that. If the approval was dependent upon our background check coming back, that was not made clear to us. But then again, we can't really prove that in court.

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Originally Posted by corvettekenny

Shame on me for not getting a written approval before making plans.. The landlord said that she would approve us and that she had the final say (versus the owner). We were upfront about having a poor credit score and the landlord asked for a little extra deposit to cover that. If the approval was dependent upon our background check coming back, that was not made clear to us. But then again, we can't really prove that in court.

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So it'll be your word against hers - you were upfront. She said the apartment was yours. You relied on that "guarantee" and gave notice.

Her side will be that she never said that.

The dates are going to come into play - when you saw the place, when you gave the deposit, when you found out someone else was moving in.

I'd take a chance - I'm a landlord and I NEVER say, "sure, it's yours," unless it's really theirs.

I agree with what Judy has told you so far.

One additional thing you might try to strengthen your case (yea, I'd probably try a lawsuit, too)... I assume you filled out a written rental application? When you go to pick up your deposit you should have a right to see any and all information they used to decline your application. I would just be super friendly, tell them that you'd like a copy of the application you filled out an any credit reports they pulled, etc. (Make sure they really pulled it, for one thing.) Don't let on that you're leading up to a law suit. Even apologize that your wife was angry. Get her to give you what you want. What I'm building up to (in a long winded way - sorry:p ) is that there should be some wording somewhere on the application regarding how they collect and apply deposits, and something about their selection criteria. I'm almost 99% sure that in most states it's required by law to give applicants written rental criteria. Get the other stuff from her first. Then ask for a copy of their criteria (if it's not with the other stuff.)

If you can prove that they didn't give you the rental criteria, or that they did, you met it, and they then rented it out from under you, I think you just strengthened your case in a huge way. (I just took a seminar on this stuff.)

Thank you guys all for the advice. I think I made my case a little bit easier.. We applied for the apartment on 7/19. On 7/22 the manager told us that we were approved and we put down the deposit. Tonight I found the deposit receipt that we had thrown away a couple days before this fiasco. It shows the date (7/22), the deposit amount, shows "hold" as the description, and shows the unit number reserved for us. That at least establishes the date that we were approved. And I have the certified mail receipt from 7/23 where we sent our current landlord the 30 day notice.

I just pulled my credit report as well, and the apartment manager waited until two days before we were supposed to move in to pull our credit. That's a full 17 days after we submitted our application! Would that at least show carelessness or apathy on the part of the manager?

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Originally Posted by corvettekenny

I just pulled my credit report as well, and the apartment manager waited until two days before we were supposed to move in to pull our credit. That's a full 17 days after we submitted our application! Would that at least show carelessness or apathy on the part of the manager?

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You won't know how the Court will look at that until you get into Court. Some will depend on what the manager "usually" does.

Again - your word against hers and the question will be whether your renting depended on your credit score and whether you began planning the move before you were actually approved.

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Originally Posted by corvettekenny

I just pulled my credit report as well, and the apartment manager waited until two days before we were supposed to move in to pull our credit. That's a full 17 days after we submitted our application! Would that at least show carelessness or apathy on the part of the manager?

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Well, this would at least show that she told you you could have the place (according to you - she will probably deny it) prior to pulling your credit.

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Originally Posted by rockinmommy

Well, this would at least show that she told you you could have the place (according to you - she will probably deny it) prior to pulling your credit.

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Right - she'll argue the moving in was contingent on the credit rating; OP argues it was not.

The lengthy wait to pull the credit rating makes me wonder if the apartment continued to be advertised, if she was stringing OP along in the event no one "better" came down the pike. But I don't know how to prove it. You said, she said.

I'd still take it to Court - if OP has the time and inclination - and see how it plays out. No telling.

Hello again, Ladies:

I don't know. It seems to me, that when the landlord took the deposit, she was guaranteeing the apartment... Unless, on the deposit receipt itself, it says the deposit is contingent on certain issues.

No? Or should I go back to answering sex questions?

excon

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Originally Posted by excon

Hello again, Ladies:

I dunno. It seems to me, that when the landlord took the deposit, she was guaranteeing the apartment.... Unless, on the deposit receipt itself, it says the deposit is contingent on certain issues.

No? Or should I go back to answering sex questions?

excon

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But that's the question - did the deposit hold the apartment pending a favorable credit rating or did the deposit hold the apartment, period, no matter what the credit rating. For whatever reason the deposit was given without the lease. I believe OP said he was to come back and sign the lease at a later date (maybe when he moved in - ?) and I also find that odd. I don't know anyone who doesn't have a signed lease before giving notice at the previous residence.

I take the deposit pending the credit report but I don't take more than 2 or 3 days to get that report and it's spelled out in writing.

No, stay here and hang out for a while.