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legalgems
legalgems, attorney
Category: Landlord-Tenant
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I filled out an application apartment and paid an

Customer Question

Hello,
I filled out an application for an apartment and paid an application fee. I have since changed my mind regarding moving to this particular development. I understand that I have lost the application fee of $250. However, I was told that I needed to pay $1,800 to hold an apartment, but I never signed a lease. The application only refers to the application fee and not to a deposit. I want the $1,800 back, but the property manager is telling me because I completed the application I agreed to pay the $1,800, please advise.
Submitted: 10 months ago.
Category: Landlord-Tenant
Expert:  legalgems replied 10 months ago.

Was the application approved or is it still pending? Was the 1800 paid voluntarily and what was it labeled as (first month's rent, or a deposit)?

Customer: replied 10 months ago.
I was told that it was a deposit, but a lease was never signed.
Expert:  legalgems replied 10 months ago.

Thank you; a holding deposit is generally not refundable; however, a security deposit, which can not be more than 2 month's rent (Section 250.511a. No landlord may require a sum in excess of two months’ rent to be deposited in escrow for the payment of damages to the leasehold premises and/or default in rent thereof during the first year of any lease.) would be refundable because there would be nothing to hold the deposit for (as the security deposit is to help protect the landlord against property damage during the lease).

A lease can be oral, or written but in order for there to be an effective lease, there needs to be an offer, acceptance, meeting of the mind (agreement) and consideration (a promise).

Generally in landlord/tenant situations, any ambiguities will be construed against the landlord, particularly if it is a corporate landlord, since the court will expect them to be aware of issues that arise due to oral leases. Also, the party alleging there was in fact a lease (the landlord) has the burden of proof to establish there was in fact a contract (lease); so if it is ambiguous, it will be decided against the landlord.

The plaintiff/ consumer can bring a recovery action in small claims court: https://www.pabar.org/clips/bringingsuitBeforeDJ.pdf

One can review the application fee- if that states that a holding deposit is required and non-refundable, then that would prevail; but absent that, the landlord would have the burden of proving the existence of a contract that justified retaining the deposit.

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Customer: replied 10 months ago.
No mention of security or holding deposit
Expert:  legalgems replied 10 months ago.

If the application is silent as to the purpose of the payment, and silent as to whether/when it is to be refunded, generally that ambiguity is construed against the party who drafted the application document, precisely because that person created the ambiguity by not addressing that issue.

I have looked into case law for guidance and could not locate a case; likely because only appellate cases are published, and since landlord/tenant cases rarely justify that kind of legal expense, such cases are scarce and usually deal with other issue besides deposits (higher stakes, so to speak, to justify the thousands of dollars that would be spent on litigation)

Customer: replied 10 months ago.
do suggest that we drop the claim or is it worth pursuing. $1,800 is a lot to spend on an apartment that I never lived in.
Expert:  legalgems replied 10 months ago.

Since this would be a small claims court it is much easier to pursue than if it was in general civil court. Normally the documents need to state what a payment is being made for; and since any ambiguity is usually construed against the drafter of the document (ie the application document) that would tend to favor the tenant; also when one looks at "equitable considerations" it would be unjust for a landlord to receive such a large amount for nothing, unless it was clearly disclosed as a non refundable deposit.

The courts prefer it if the plaintiff - the person bringing suit- first attempts to negotiate with the defendant before filing suit; so one can send a certified letter requesting a refund, stating that one will pursue their legal alternatives if the matter is not resolved.

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Expert:  legalgems replied 10 months ago.

I'm sorry; I did not get an email notification re: your additional services request.

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