[Razz2525]

We're going to consult a landlord/tenant attorney tomorrow but yesterday, we thought we'd found our place to live and signed a "Memorandum to Lease" and put in a "good faith" deposit along with a nonrefundable application fee. We also added language that contingent upon the sale of our home would we enter into a lease with the landlord. The realtor said that the landlord had until Friday to "accept" our offer and that only upon their acceptance AND execution of the lease, would we have a "done deal." We were told if we changed our minds after execution of the lease, the landlord would be entitled to keep our deposit. He even made a comment that once the keys were in our hands, we were committed. Please note that we have not yet signed a lease at all.

Since it wasn't a done deal, we continued to look for rentals today and we found the perfect place. We contacted the above realtor and informed him that we are rescinding our offer to lease and asked when we could obtain our deposit back, less the nonrefundable credit check fee.

He responds that the offer to lease is binding and said that the landlord had already accepted our "offer" to lease the property. He said that he'd warned us that we'd lose our deposit if we tried to back out of the deal; however, our contention is we only had a deal upon execution of the lease. Plus, prior to him saying that the landlord had accepted our offer, we informed him that we were rescinding our offer.

Has anyone here had a similar issue with a Memorandum of Lease? Is the landlord entitled to keep that "good faith" deposit after only 24 hours of signing the Memorandum? We tried to find references to this issue online and Florida Contract Law that would apply, but couldn't find anything. Based on the reaction of the agent who said the landlord could "try" to keep the deposit, I'm sending that the law may be on our side.

Thanks for any advice on this!

[Miami-Orlando-relocator]

Hi Razz,

I know it has been a while since your message was posted here but maybe this info can still answer some of your questions or help other forum readers looking for reliable advice.
Here is an article from Florida Real Estate Commission and a link to it.

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FREC clarifies broker authority

The Florida Real Estate Commission (FREC) clarified the authority of brokers to disburse certain funds held in the broker’s escrow account collected as part of a residential landlord and tenant relationship when there is a conflict over distribution.

At its February 2009 monthly meeting, FREC issued an interpretation to section 83.49(3)(d) of the Residential Landlord and Tenant Act. According to the interpretation, brokers holding a “security deposit” or “deposit money” in escrow as part of a “contract to lease” (also called a memorandum or agreement to enter into a lease) may disburse the funds at the broker’s discretion when faced with conflicting demands from the landlord and tenant. Previously, brokers who disbursed such funds when faced with a dispute risked being charged by FREC with violating the real estate license law.

The specific issue addressed by FREC was: Does a “contract to lease” create a “landlord-tenant relationship”? Under section 83.49(3)(d) a “rental agreement or other landlord- tenant relationship” must exist in order for the broker to have the authority to disburse security deposit/deposit money if there is a dispute. The Residential Landlord and Tenant Act defines a rental agreement as “any written agreement, or oral agreement for a term of less than one year, that provides for use and occupancy of the premises” – but the Act does not clearly define what creates a “landlord-tenant relationship.”

In its interpretation of 83.49(3)(d), FREC determined that a “contract to lease” does create a “landlord-tenant relationship.” According to FREC, any verbal or written contract to lease, agreed to by landlord and tenant, constitutes a landlord-tenant relationship, even if the tenant does not take occupancy.

While disbursal of escrow money in this case without following the notice and settlement procedures of chapter 475 will no longer be considered a violation of real estate license law, brokers are still civilly liable for escrow money if it’s wrongfully disbursed. If the broker isn’t sure who is entitled to the escrow funds, the broker does not have to disburse the funds.

Questions? Contact FAR’s Legal Hotline at (407) 438-1409.
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