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landlord witholding deposit after we changed our mind

Posted by Chris on January 20, 2002 at 11:16:52:


My girlfriend and I looked at a loft space in Williamsburg, Brooklyn on Jan. 3. We decided we really liked it and so we left a deposit for the first month's rent with the landlord's office. The landlord was out of town that day but we had already lost one space there because he told us that someone had left a deposit after we looked it, so we didn't want that to happen again.

That night, my girlfriend and I decided that we should not spend the money for the space right now. We called the landlord the next day (Friday) and told him that we had changed our minds and that we would like to get our deposit check back. He told us that he had already cashed it but that once it had cleared in his bank then he would write us a check back. He told us to call him the next Wednesday. My girfriend wanted to put a stop on the check but I was too trusting and encouraged her not to, because I thought we should try to maintain a good relationship with the landlord in case we wanted to rent there in a couple of months.

The next Wednesday, we called and he told us that the check had still not cleared. Later that day we checked our account and the money had been taken out. We called him the next day (Thursday) and told him, and he said that it would still take a couple of days to transfer to his account but that we could pick up the check the next Monday.

So..we called him the next Monday (the 14th) and asked him what time we could pick up the check. He then told us that he was going to charge us a $500 fee for "processing". We were so shocked at hearing this (he had never mentioned anything about it before) that we said that we didn't think that was a fair price and we negotiatied it down to $250. After we hung up we thought about it more and called him back and told him that we didn't think it was fair at all for him to be charging any fee. He started yelling at us on the phone about how we had insulted him and how he was such an honest businessman, blah blah blah. He then said that unless we wrote him a letter agreeing to the fee, then he was not going to give us any of the money back.

We faxed him a letter two days after that happened (on a free lawyer's advice) giving a deadline for when we wanted the check back for the full amount. Naturally he has not responded yet, so we are preparing to send a certified letter threatening legal action.

We never signed anything agreeing to any processing fee (in fact we never signed anything at all except our rental applications - and even those should not have been complete enough for him to begin the credit check because we did not have some of our tax information to him yet). Even on the rental applications which we faxed him there was no mention of any processing fee or cancellation fee, etc. We have considered just sending him the letter agreeing to the fee so that we can avoid the hassle, but we are worried that we might still have problems getting the rest of the money back, and it is also just a matter of principle that we don't to be ripped off by this guy who probably assumes that we won't do anything to fight him.

Is this legal for him to charge this fee? I know there is often a credit check fee charged but I have never seen one over $100 or $150 (and even that is a ripoff). If we took this to small claims court do you think we would win? Does anyone have any other advice or suggestions on what we can do to fight this or how we could get more leverage against him? Does anyone know of any brooklyn tenant's associations, etc.?

Any help would be greatly appreciated.


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