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.
it’s not illegal, and you aren’t entitled to any refunds – you basically don’t want to honor the agreement.
I think the only way out would be to submit your resignation to your job but proceed with the application. The landlord won’t approve you because you are jobless, so you will be entitled to a refund. Or place a freeze on your credit which wouldn’t allow the landlord to run your credit, etc.
Make a call to the New York Dept. of State, there is a local number available and question the brokerages procedure. If this is illegal and the Dept. of State intervenes this will be more than enough incentive to reimburse your fee, The Department of State has the right to conduct investigations, bring up charges if necessary and fine or revoke licensing of dishonest brokers. Good Luck
i agree with bklnite. worse case scenario is you lost your deposit already. i would follow through then with the application process and state you have no income and no guarantor and the pets. say you are hoping to find a bartending job. you will be rejected likely and they’ll then have to give you your deposit back.
and if you havent given them your social security # for the credit check, do not give it to them. say you are not comfortable giving the social to a firm that hasnt been that transparent disclosing info to you. without a credit check i doubt they’ll try to touch your application with a 100ft pole.
Call Help Me Howard!!!
*rob*
^^ brilliant idea
Seems like you should talk to the broker, or the broker’s boss, and mention the applicable law and ask for your deposit minus a reasonable fee for a credit check – I’d think 50 or 75 bucks would be reasonable.
Or, you complete the application, stating that you have no income, no guarantor, and that you have 2 large dogs and love to party late at night. Then when the landlord rejects you ask for the deposit back, per the application contract legalese.
Babs is right, just tell them you’re going to go on Yelp and Brownstoner and whatever else and tell everyone this story. And follow through with it if you don’t get your money. If they lose even 2 or 3 potential clients over that they lose way more money than the $650 they want back from you.
What Slopefarm and Babs said. Also, see the “Fees” section of this FAQ, which you might want to print and deliver to broker when you discuss refund: http://bit.ly/d5bGqr
According to what you wrote, a completed application that is rejected would bring a refund. Do terms state that they would keep the deposit if application accepted, but tenant rejected? Depending on answer, you might want to submit a completed application that would trigger rejection as tenant.
Most reputable brokers don’t take deposits for this reason; it’s a really nasty legal gray area. Call back the agent you were dealing with and ask to speak to the broker in charge; when you do, inform him/her that you want your deposit back, as it was not made clear to you that it was not refundable if you changed your mind, and that if you do not get it back you will not hesitate to 1. bring an action in Small Claims Court and 2. tell EVERYONE (and I mean everyone) about your bad experience with this firm. Most firms won’t want to deal with the aggravation and bad publicity and will give you back your money (or at least a portion thereof). Whatever happens, good luck and focus on your new life abroad!