Broker's Fee Deposit
Hello, I recently looked at an apartment in Park Slope that has a broker’s fee. I really liked the apartment and immediately put down $650 as a deposit to show the landlord I was interested. This was effectively a portion of the total broker’s fee, due at lease signing. If the landlord rejected my application,…
Hello, I recently looked at an apartment in Park Slope that has a broker’s fee. I really liked the apartment and immediately put down $650 as a deposit to show the landlord I was interested. This was effectively a portion of the total broker’s fee, due at lease signing. If the landlord rejected my application, I would get this amount refunded, if I was chosen, this would go towards my broker’s fee. I signed a application contract stating all of this.
For my own reasons, I have opted to not move in. (My boyfriend has been unexpectedly been accepted to school abroad and I would go with him.) I am withdrawing my application which I wasn’t quite finished with anyway (I had not yet provided the guarantor information that was requested) and the broker is telling me that I am not eligible to receive my deposit back. I’ve looked closely at the application contract that I signed when I put down the deposit, and the fine print about the deposit does say, if the applicant (me) decides not to continue with the application, the deposit is “unreimbursed.”
I’ve looked more closely at the legalese behind this now, and the NYC Rent Guidelines Board website says “The fee should not be paid until the client is offered a lease signed by the landlord. The broker may also charge the client a reasonable amount to conduct a credit check.” (See http://www.housingnyc.com/html/resources/attygenguide.html#32 )
SO – I have learned my lesson about reading the fine print! But what should I do? It seems to me that according to rental law a broker’s fee should not be collected until I sign a lease. (That’s the assumption I had when I put down this deposit – that if I didn’t go through with signing, I wouldn’t be out $650.) The document I signed does stipulate that my deposit in this scenario should be “unreimbursed,” but doesn’t that appear to contradict rental law?
I want to resolve this quickly and without a lawyer, since I couldn’t afford to pay more than I already might lose here. I’m curious to hear your thoughts! Please don’t tear me apart, I know my follies here. Thanks.
The reason why I call the deposit “shady” is because it’s a one way street that only serves to benefit the owner. The tenant is giving the deposit to show that they are committed to taking the space, if they are accepted. The Landlord is supposed to then pull the space off the market but in reality doesn’t have to, and if they don’t, there’s no recourse for the tenant other than small claims court. At the end of the day, the tenant has made a committment but the owner has not since the owner’s side is contingent on approving the tenant.
What if the landlord passed up other prospective tenants since you gave the money and now they have other places lined up?
What good is a deposit if the renter can just pull it back at any time for any reason?
Actually, the deposit thing is not shady at all, the not giving it back is shady considering the reason. I take deposits from renters and tell my broker to do the same. I’ve been burned by prospective renters too many times. They’ve led me to believe they will be renting from me while I bend over backwards to meet their demands, after a week of negotiating and not considering other tenants, they back out at lease signing. Ridicuolous! So now you have to give me or my broker a deposit to show me you’re serious. That said, if you explain your scenario and little time has passed I will of course refund that to you, but if you dick me around I lose time, and time is money, I will keep your deposit. Take me to court! Deal with it! it’s called business.
Though the idea of a good faith deposit is somewhat shady, I don’t really think you’re entitled to the deposit back. The whole point of putting down the good faith deposit is to show you want to place and to take it off the market. The idea isn’t to prove that you have $650. Just sayin..
Yet ANOTHER reason rental agents should be taken out back and shot. This “profession,” on the whole, makes every other skeevey profession look downright wholesome.
I hope you get your money back. I will never deal with anyone that requires a deposit on an application for an apartment rental. This is just dirty business if you ask me.
Low life broker. Speaks about the direction of the market. In better times, you would have gotten your deposit back without delay.
***Bid half off peak comps***
yeah, give us the brokers name!! we’ll flogg him in public!!I never knew Barbara Corcoran was on Brownstoner, Babs, is that you?
Broker sounds desperate. Let us know what happens.
What’s the name of the broker?