Legal Question in Real Estate Law in California
On July 15, 2023 I had an applicant come out to see the studio apartment that I was advertising to rent and after looking at the apartment he told me he liked the apartment and wanted to rent the studio apartment which would be available for an August 1, 2023 move in date. I as the owner agreed to hold and rent the property to this applicant (we did all this with a hand shake, a verbal agreement and at that meeting he also sent me immediately the $1,800. deposit to hold the apartment for him to move in on August 1, 2023.) I told him that on August 1 before he moved in and got the keys he would have to pay the remaining balance of the first month's rent that is still owed of $1,670.00. On July 26, 2023 the applicant sent me a text message via his mobile phone saying he had some problems and decided he did not want to rent the apartment, he wanted to back out of the deal and wanted his deposit to hold the property returned. I told him that he agreed to the terms to rent the apartment and gave me $1,800. to hold the apartment for him. I told him that now I have to re-advertise again the apartment and put a lot of time to re-rent the apartment because he now wanted to cancel the deal. I told him that this was causing me monetary damages and just because he changed his mind that wasn't fair to me. I would do my best to advertise again the apartment to a new person, but that he would be on the hook or liable for the $1,800 he paid me until I found a new person to replace him. So, for example if I didn't find someone until August 15, 2023 to replace him he would be responsible for half of his deposit (August 1-15) plus the damages I incurred in terms of extra time and work it took me to find a new tenant to replace him. (And even though it wasn't in writing, we still had a verbal agreement and $1,800. paid to me from his back on my Zelle bank app showing it came from the applicant and also the text confirming that he wanted to now back out of the deal, am I within my legal rights to keep that portion of the deposit to compensate me for him backing out of the deal ? Thank you for your "Free legal Question" allowed. Mark Baerg 831-643-5999 [email protected]
1 Answer from Attorneys
Without a signed agreement to rent the property you would lose a small claims case if he comes after you for the deposit. If you sign a rental agreement with a deposit to hold the agreement in place until the move-in balance is due, then it's a breach of contract and you can use the deposit for your damages. But a "handshake" deal will not stand up, especially if you didn't expressly say "I keep this deposit if you back out, and he didn't say he agreed." Even that would be tough to enforce, since he would deny that was expressly agreed.
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