Ask Me Help Desk - Security Deposit with Early Lease Termination

We were renting a house for $2500 per month through July of 2009 in Maryland. Our security deposit was $2500. The owner then received a purchase offer for the house. The owner agreed to the following in order to have us move out early so he could sell the house. The email agreement for us to leave the rent property 10 months early is listed below:
$10,000 payment
$4000 moving expense
$3600 for the owner to cover the rent difference between his place and the new place we found

I did not mention the security deposit in our email agreement because I assumed I could not demand he pay that until he walk through the house before or after we moved out to assess any damages. We are now out of his place and it sold on 8/29/08 with absolutely no damages from us. He is now saying that the $10,000 payment included the $2500 security deposit and that he is not giving us our security deposit back.

I am thinking of taking him to small claims court. Do you think I have a case?

Tricky. He technically did not have to let you out of the lease at all. And, quite honestly, if you were to take this to court, I think that the judge might consider that paying you 17K is quite adequate compensation. You negotiated a new contract when you agreed to the move out terms, so to come back asking for the security deposit is likely to be seen as something outside the terms of that new agreement, and it's likely that you won't be awarded the money. And, even if you are awarded it, what are you going to do to make him pay it? You can't put a lien on his house... do you know where he banks and works?

We left early for him so that he could sell it. He did not let us out of the lease, we let him out of the lease. Yes, I know where he banks and works. The security deposit was already given to him. Why would I assume that he would give that back to me without inspecting the house. I expected him to inspect the house and then return the security deposit.

I will give more details. We signed a 2.5 year lease starting on 1/1/07. In mid July 2008, the home owner asked if we would move out because he had a purchase offer for a close on 8/29/08. My wife and I plus our four kids all agreed to move out 10 months early for him. My company moved us to MD for a project and after our lease, is going to move us back to TX. So, us moving from his house 10 months early cost us the $4000 he gave us for moving. We would not have had this expense had we not moved for him. The $3600 is because in the couple of days we had to find a new rental place new our current house so the kids schools wouldn't change, we were only able to find something more expensive. It was only acceptable for him to pay the difference. The $10,000 was money he gave us to get out early so that he could sell the house. He tried to sell for almost a year before we rented but was unable to. So, in reality, he only gave us $10,000 to move out 10 months early, uproot my family again and go through all the trouble of moving. We did not have to move out. I always expected him to inspect the house in order to determine if we did any damage. Therefore, I expected the security deposit to follow the normal landlord / tenant process.

Well... you can try going to court. You can argue that the security deposit wasn't included in that amount. He will argue that he gave you 10K to move, and that included the security deposit.

You claim that you are relying on the normal landlord/tenant process, but the buy-out is clearly outside that process. Having sat down together and said that you would leave for the 10K, moving expenses, and the difference in rents, it's unlikely (in my opinion) that the judge would say that you are owed more money. That settlement is a new contract between you and the landlord, and replaces the lease agreement.

Quote:

Originally Posted by factsonly

I will give more details. We signed a 2.5 year lease starting on 1/1/07. In mid July 2008, the home owner asked if we would move out because he had a purchase offer for a close on 8/29/08. My wife and I plus our four kids all agreed to move out 10 months early for him. My company moved us to MD for a project and after our lease, is going to move us back to TX. So, us moving from his house 10 months early cost us the $4000 he gave us for moving. We would not have had this expense had we not moved for him. The $3600 is because in the couple of days we had to find a new rental place new our current house so the kids schools wouldn't change, we were only able to find something more expensive. It was only acceptable for him to pay the difference. The $10,000 was money he gave us to get out early so that he could sell the house. He tried to sell for almost a year before we rented but was unable to. So, in reality, he only gave us $10,000 to move out 10 months early, uproot my family again and go through all the trouble of moving. We did not have to move out. I always expected him to inspect the house in order to determine if we did any damage. Therefore, I expected the security deposit to follow the normal landlord / tenant process.

Your proof of whether the return of the security deposit is going to be returned is contained in your agreement with him. Your agreement is a contract between you and the landlord and will "probably" be considered all inclusive. I think if the security deposit is not addressed it will be considered to be part of the cash settlement - but you never know what a Court will decide.

I can definitely see your side of this. But from cases I've heard in court and 15 years in the rental business I tend to agree with froggy and Judy... I think a judge would probably not award you the additional $2500.

But you never know... if the two of you show up in court and the judge is really rubbed the wrong way by the landlord for some reason, or some detail catches his attention... anything could happen.