Lease Never Signed

May 31, 2002

LVT Number: 15904

Prospective tenant paid landlord a security deposit but never moved into the apartment. Landlord refused to refund the deposit, and tenant sued landlord in small claims court. The court ruled for tenant and ordered a refund of $1,000. Landlord appealed, claiming that there was an agreement that if tenant didn't move in, he lost the deposit. The appeals court ruled against landlord. A security deposit paid in anticipation of a lease or rental agreement remains money belonging to the person who pays the deposit.

Prospective tenant paid landlord a security deposit but never moved into the apartment. Landlord refused to refund the deposit, and tenant sued landlord in small claims court. The court ruled for tenant and ordered a refund of $1,000. Landlord appealed, claiming that there was an agreement that if tenant didn't move in, he lost the deposit. The appeals court ruled against landlord. A security deposit paid in anticipation of a lease or rental agreement remains money belonging to the person who pays the deposit. There was no proof that landlord and tenant agreed on the terms of a proposed lease or that tenant lost the deposit if no lease was signed.

Albert v. Margaretten: NYLJ, 5/9/02, p. 23, col. 4 (App. T.2 Dept.; Doyle, JP, Colabella, Winick, JJ)

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