Verbal Agreement Dispute

[sirenia]

My husband and I discussed renting an apartment with the landlord over the phone. After some discussion we agreed to rent it and the landlord asked us to send in an application with a $400 deposit to hold the apartment. Nothing was said about the deposit being non-refundable and no lease was signed. This took place on a Wednesday and they received the check that Friday. Friday night, we decided to get another aparment which was initially unavailable.

At that point, since it had only been two days, we e-mailed the landlord and informed them of our decision to withdraw our request to hold the apartment and to return our deposit. We then received an e-mail from them stating that they would not return the money, they would consider returning a partial amount if they could rent the place out for the time we had agreed upon at their discretion, and that it had inconvenienced them greatly because they now would have to post another add for the vacancy. All of this was stated in non-negotiable terms. So my husband and I processed a stop-check for the payment.

Next we hear that they are incredibly upset and want to take us to court. We are willing to defray their costs for reposting the vacancy and any charges that may have occurred due to the stop-check; however, we do not feel that they should be able to keep $400 of a deposit for which no agreement was signed and it was not made clear to us that it was non-refundable.

Any thoughts, suggestions about this issue? We understand that a verbal agreement is binding, but to what extent? Are they entitled to the entire amount?

 

[Duranie]

You broke the agreement, even though it was verbal. Most deposits are non-ref, that is assumed since it would make it pointless to take a deposit, hold the apt for you, then let you cancel with no penalty?

Since you stopped payment on the check, that is not going to look good on you in court. You might be stuck paying the whole amount and any court costs.

Nobody knows what a judge will do, but if I were you, I would not have stopped payment on the check, you did break the agreement afterall. You could always sue them for any amount you feel was overpaid.

 

[sirenia]

While I agree that we broke the verbal agreement, I do not assume that most deposits are non-refundable. Often security deposits are returned at the end of a lease period or applied to rent. It was not made clear in either case.

As for the stop payment, I guess we will just have to wait and see how a judge sees it should this go to court. At the time it seemed like the right thing to do since the landlord was not even willing to negotiate a possible refund, even a reduced one.

Thanks for your take on the situation though.

You broke the agreement, even though it was verbal. Most deposits are non-ref, that is assumed since it would make it pointless to take a deposit, hold the apt for you, then let you cancel with no penalty?

Since you stopped payment on the check, that is not going to look good on you in court. You might be stuck paying the whole amount and any court costs.

Nobody knows what a judge will do, but if I were you, I would not have stopped payment on the check, you did break the agreement afterall. You could always sue them for any amount you feel was overpaid.

 

[Duranie]

The security deposit though in this case was to hold the apt for you, not like if you were moving out.