Legal Question in Real Estate Law in California

Liability for Holding Deposit before lease

Three months ago I paid a "Holding Deposit" to an apartment community in Sunnyvale, CA. I was told that the $230 deposit was refundable for 24 hours, and after 24 hours I was told that $77.26 per day would be applied to the deposit, until I cancelled my hold, or signed a lease.

Before I was able to make the move from Colorado to Califonia, my son became gravely ill with kidney failure. I notified the apartment complex, with full expectation that I would have to forfeit the deposit of $230. Now I've received a collection notice (with no previous invoices) informing me that I owe more than $1,700! The liability is $77.26 per day for the number of days from paying the initial deposit until my cancellation-and please note, I had not yet signed a lease.

Obviously, I was negligent in not reading the "fine print" more carefully. I've never encountered terms like these. My question, of course, is: am I liable for the full amount? I've included the full text of the agreement below.

"If applicant cancels their move in to , owner will retain from this holding deposit $100 as liquidated damages, plus a pro rated daily rate of $77.26 per day beginning 24 hours after the signing of this agreement and ending on the date of cancellation."


Asked on 12/17/97, 7:53 pm

1 Answer from Attorneys

Patrick A. T. West Ohio Ticket Defense Patrick A. T. West, Attorney at Law

Retaining deposit collection

I would say that under the contract your liability is limited to $230 because of the words, "owner will retain from this holding deposit."That limits your liability to the amount of the holding deposit.It seems to me, however, that the agreement isvoid as contrary to public policy, but you would have to verify that with a California lawyer.I would suggest Josh Dale at http://www.jmd-ent.com/.

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Answered on 12/17/97, 10:48 pm


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