Can I reject an applicants request to withdraw their withdrawal?
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
Lol no this is not a riddle. I actually had an applicant that was going through the screening process with the HOA of my community request to withdraw the lease agreement. The applicant did not want to wait any longer for an approval for the HOA and decided they wanted to move on. After informing the applicant several times that they will lose their deposit they kept trying to tell me that I owed them their deposit. The very next day they sent me a request to withdraw their withdrawal. I really do not want this person in my home right now. Am I allowed to reject this last request, legally? I already listed my home for rent again and am receiving inquiries for rent now. I have all withdrawal request in writing.
@Samuel Awosolu I did use the contract to lease form by Florida Realtors. But my HOA requires that an executed lease agreement be turned in with the hoa application. So the applicant signed a contract to lease form as the offer. then we agreed to terms, signed the lease agreement and projected out about 45 days to the 1st of the next month for the lease term to begin. All contingent on HOA approval of course. because of the HOA approval process. This HOA process is crazy I know
@James Wise Doesn't sound like he has to according to his contract.
@Samuel Awosolu It doesn't matter that the tenant could use those funds to find something else. They broke the contract, they suffer the losses associated with that. If we all got our money back every time we had buyers remorse there would be no point of contracts.
@MarieChele Porter If the tenant was in dire need of a place to live then they shouldn't have signed a contract saying they would wait the 30 days to be vetted by the HOA.
I see the pity side of it towards the tenants, but they signed a contract and then decided to cancel twenty something days later. There are costs that go to towards the OP due to the loss of rental income, why is nobody throwing him a pity party? He didn't do anything wrong.
@Account Closed Are you running a business with a website and all that advertises rental properties where people can leave reviews? If so you could have a negative review, so compare that to how many positive reviews you've had and see if it's worth $860 to have a bad review. If you're just renting a single property I wouldn't worry about it. Show the old prospective tenants the contract and highlight why they aren't getting the hold money. It's not exactly going to make headline news or tarnish your name because you stuck to a contract.
If tenant pays a non refundable deposit then fails to pay 1st months rent / not move in then yes you keep the deposit.
However this tenant still wants to move in. You cannot deny them housing when they still want it and keep their hold deposit.
From my understanding the applicant gave a hold deposit and then canceled the contract which according to the terms of the contract meant they forfeit the hold deposit. The tenant then later came back and said we still want to live there, but at that point the contract has been canceled and the appropriate consequences apply. At that point he can deny them housing as they are basically a new applicant with no contract as the last one was canceled. At least that's what I'm am understanding from the timeline. @Account Closed It's not petty to keep the deposit. Deal with any large financial institution and put money down that is non refundable and then cancel your contract. Do you think they are going to give you your money back because you canceled the contract? Nope
Legally he may be able to keep it, not disputing that (if 2 lawyers said he could then I don't doubt that at all). It's the Customer Service aspect. Many people say "Look at a big company" or "Follow the contract". Think of the same thing from a big company.
You go to a "satellite dish provider" for service
They say they will have a tech out within 30 days and charge you a technician fee of $50.00 up front
You call and try and get them earlier for the Smith/Johnson fight on PPV
They say "Sorry you signed a contract it could take 30 days for a technician and we are pretty busy, the regular tech quit and we are training a new guy. Expect it to be done on day 30"
You say "Forget it I want to cancel then"
They say "OK but I'm keeping the $50"
You say "Whoa never mind I'll still get it, should be out in the next day or two anyway"
They say "Tough we are keeping it and we refuse to give you service"
They may be within their rights and they did have people on the phone dealing with you and had to schedule around your proposed time and may have ordered some equipment that is sitting in a warehouse, advertising costs to get a new subscriber etc. He gave it back which is what I would have done, but it comes down to the type of business you want to run.
@William Walker You have it correct.
From my understanding the applicant gave a hold deposit and then canceled the contract which according to the terms of the contract meant they forfeit the hold deposit. The tenant then later came back and said we still want to live there, but at that point the contract has been canceled and the appropriate consequences apply. At that point he can deny them housing as they are basically a new applicant with no contract as the last one was canceled. At least that's what I'm am understanding from the timeline. @Account Closed It's not petty to keep the deposit. Deal with any large financial institution and put money down that is non refundable and then cancel your contract. Do you think they are going to give you your money back because you canceled the contract? Nope
From where I am sitting we have signed paperwork that says the tenant has paid a deposit to hold the property. We have a tenant who wants to move into the property and a landlord who doesn't want to let her into said property that she wants to live in.
Whatever was discussed on the phone about a possible change of heart from the tenant is irrelevant as there is no proof that that conversation ever occurred.
I do not know how many times those in this thread have been sued by tenants but my company is involved in tenant lawsuits pretty regularly. Thing you guys should know about these types of things is the cost to defend yourself is often times equal to or more than what they are suing for. Do not leave yourself open to more lawsuits than necessary. IMO a judge will come down hard on the OP if this makes it to a courtroom. Often times tenants can sue for double what the wrongfully withheld deposit was.
As it has been presented @Account Closed I think the landlords application terms were such he has right to retain the holding deposit, and I would have done the same. I wish more landlords would actually know their rights and operate as a business.
What is your reasoning for not allowing the tenant to fulfill the request and keep the application process going?
Because they got impatient an expected a reasonable approval process (Houses sell in half the time it is taking the person they are dealing with to approve them to rent)?
Because they had unreasonable expectations by expecting the same time frames as they have had in the past? They are now "unacceptable tenants" because they dared complain about the lack of response?
Keeping in mind the next tenant will take at least 30 days as well (plus other time frames). So the house will be vacant for an additional month or two. If professionalism and running like a business is losing money over a complaint do to a real problem. I'd hate to see what happens with a non renewal because the landlord failed to fix a sink in a month (Legally thy still have bathroom water running so you can take a month to fix the kitchen)
@Account Closed. Personally, I avoid investments with complications such as HOA's. You have to run your business like a business. Andrew, you have to be careful who you accept advice from. Personal opinion or fear is widespread.
An example of this is damage deposits in Minnesota. Google whether or not it is legal for a landlord to withhold a portion of the deposit to pay rent owed. Eight out of ten sites say it is illegal. So I go to the actual State of Minnesota statute, and it is not illegal. There are steps, yes, but not illegal.
If your contract states that cancelling prior to approval forfeits the deposit, go with the contract. More importantly, pay $800.00 bucks to have your contract reviewed and approved by a real estate attorney (or $1,000.00...whatever). Don't do the fear thing. Remember, other people's perspectives are a lens they look through, based on their personal experiences. That is where accusations of immoral, or karma, or it will hurt your business come from. It will hurt your business far worse to run it by emotion, instead of by business practice. This is a business.
@Account Closed I think you are looking at this incorrectly. This should not be a legal or ethical decision. You should be look at the problem from a business perspective. The court system has nothing to do with right or wrong. It is all about who can handle the most time and financial pain. What you face is the potential of somebody taking you to court over a few hundred dollars. From a business perspective you have to ask yourself what is the greatest downside and what is the greatest upside in a legal contest? Your greatest upside is fixed by the dollar amount you hold for deposit. However, your financial downside is substantially higher if you have to go to court. Worst case for you is that they take you to court AND the HOA approves them and they become tenants from hell. I suppose you could decide not to accept them as tenants even if the HOA approves them, BUT they could come after you for discrimination/retaliation. Then you would face additional legal fees and no upside for you.
The documents and the law might be on your side, but not every fight is worth fighting. Give them their money back on the condition that they give you an official letter stating they don't want your unit. That will cover you so they cannot come back and say you discriminated against them for some true or made up reason.
Good luck to you,
Arlen
Hi @Account Closed:
I’m not a Florida lawyer so don’t take what I say as legal advice. But I’m a little confused on the facts. Is the following an accurate summary of the facts?
1. You enter into a Contract to Lease with the applicants. I’m going to assume that you used the following form:
http://www.sunnationaltitle.com/sites/default/files/florida-real-estate-forms/Contract-to-Lease.pdf
2. That form has a clause where the lease is contingent on HOA approval. See Section 6.
3. The HOA Application says allow up to 30 days for approval.
4. At some time during those 30 days, the applicants say that they don’t wanted to withdraw the Contract to Lease.
5. The very next day, the applicants come back and say they want to keep the Contract to Lease.
6. As of today, the HOA has not accepted or rejected application.
Assuming the above is correct, I think your question is whether: (1) you have to still allow the applicants to keep the Contract to Lease; and (2) if you don’t, whether you can keep the deposit fee. Am I right?
Again assuming my summary of the facts are correct, I would be careful. Your attorney friend said that they breached the Contract to Lease. But the only possible breach I see is the actions they took in Step 4. While Florida law may say otherwise on this matter, most states refer to that kind of conduct as “Anticipatory Breach.” It’s basically describes a situation where one party tells another that “I’m not going to perform this contract" but haven't actually taken action to breach the contract.
In the jurisdictions that I practice in, you would have the right to treat their threat as a breach and elect to terminate the contract. BUT the law also states that the applicants have a "reasonable" period of time to come back and rescind their threat to breach the contract. This is especially true when you---the non-breaching party---did not suffer any harm. In this case, I don’t see any harm that you suffered as a result of the above facts aside from some level of annoyance.
So setting aside the morality discussions, I would clarify two issues with your lawyer friend. First, what exactly is the breach that applicants committed? Second, assuming that the breach occurred on step 4, what does Florida law say about curing such anticipatory breach?
Other issues that can play a role are various consumer protection laws, but I really don't know anything about Florida law on that issue. In Pennsylvania, the landlord in the above scenario could potentially have to pay for attorney's fees, treble damages (basically three times the amount of the actual damages), and potentially punitive damages (basically a punishment by the judge for "very bad behavior"). It may also have to deal with investigation by the Attorney General's consumer protection office.
Chris K. You almost have it right. Here's what's part of the problem, my HOA rules. My HOA requires a lease agreement prior to their approval, not the contract to lease.
I have never heard such things and to answer the question of many others As to why I bought this property with this HOA, was because it was never intended to be a rental property. It was the home I lived in for 3 yrs. the process is a lot smoother when you are buying as opposed to leasing.
So to get back to your question...
The contract to lease was given as a form of an offer to lease. Once I did my screening of the tenant we both signed the contract to lease then proceeded to the lease agreement due to the HOAs requirement. So what I now have is a signed lease agreement not contract to lease.
Hi Andrew:
Thanks for clarifying! I think the same point still stands: you would still want to ask the questions that I suggested above. Whether it's a contract to lease or an actual lease agreement shouldn't really matter. The main issue is still whether your applicants have the right to rescind their anticipatory breach under Florida law. I would immediately clarify this issue before you do anything else.
When is the deadline for the HOA to make a decision?
@Account Closed
I follow the rules. I recently had a tenant I like very much pay one day late. I really agonized over whether to overlook the rule or not. I had another tenant who was not quite following the lease on something, so I really wanted to address that with her. In the end, I put the late fee on the tenant I really like so that my business practice is consistent. I then can continue to use consistent business practices with all tenants. It frees you from the emotional tug of war....follow the contract. I cannot say you won't ever get sued...but consider you have a legal contract? What exactly can they get?
I reached out to a friend of mine who is a lawyer. I had him review all of the documents and he told me that since the tenant decided to breach the contract prior to approval of the HOA before the lease term I do have the right to hold the deposit. He even took it a step further and said I even have the right to ask for the early termination fee which is 2 months rent according to our lease agreement. He explained to me that once someone writes a withdrawal of an offer, the contract is then terminated and no longer exist. So if the person then comes back and says they changed their mind, I can say the offer was already withdrawn and that's it. I had a change of heart and now I've decided not to be nasty and just give the money back and move on to another renter.
I would question your lawyer on his logic that he could really get a judge to let you keep the deposit and get two months rent? There is no way that would ever happen. You are entitled to reasonable expenses for rerenting, but since the people agreed to take it after you threatened to withhold their deposit, you wouldn't have had any expense. The judge would say, why didn't you just rent to them since they were already approved? Are you going to tell the judge they are wishy-washy?? Smart to give it back because you would lose in court and most importantly it is the right thing to do.
Joe Splitrock you missed the whole part about the HOA not making a decision yet. The applicant withdrew before their process was complete.
I got all that. I think you are getting too hung up on what your lease says. Just because it is in your lease doesn't mean it is legal, enforceable or collectible. Courts view matters in practical terms. They will not award you more than your actual loss. In this case the judge will question why you didn't just let the person change their mind and rent from you. Only one day passed between their written notice and their change of heart. No court in this country would award security deposit and two months rent in this situation. Since they haven't taken possession, at most the security deposit would be awarded. My guess is your lawyer is inexperienced. Of course he gets paid no matter how this would turn out in court.
Lots of people on BP will tell you to be tough, but they have never been to court and seen how these things really play out. You are very smart to refund the money and move on.