Advise on getting security deposit refund (lease, lawyer, buy)

[cdfblair]

I am looking for advice on getting my refund on a security deposit for a commercial lease. I met with the landlord and gave him a $2,000 deposit to lease a space. The landlord needed to complete some repairs. We had been in contact often concerning the space and him getting the area ready. In the meantime I went to the city to get a certificate of occupancy. The space did not pass inspection and the landlord doesn't want to make any repairs. The landlord has now begin avoiding me because I believe that the money has been spent. I have called and sent emails. Today I was going to send a certified letter. Any advice would be appreciated!

[SickOfCalifornia]

Did you sign any papers when you gave the money? Is there any chance something you signed mitigated his responsibility or limited your ability to inspect?

You should send him a certified demand letter. If that doesn't work, you should hire an attorney to do the same. An attorney's letter is really just hoping that the letterhead of the lawyer scares him into paying, because realistically an attorney is not much help for you in this case beyond drafting an intimidating demand letter. At the end of the day, however, you can't force someone to cut you a check, even if the money is rightfully yours. Your recourse for this amount would be small claims court. You'll have to pay a fee to file, and another to have him served. Assuming he shows up for the court date, the judge will probably send you into the hallway and tell you to settle it. If you still can't settle it and the judge actually hears you out, you probably still only have a 50% chance of winning the judgment. Sometimes these small claims judges can come up with some pretty unusual decisions that seem based less in law than their own whim. And then let's say you win the judgment. The guy could simply not pay you anyway, in which case you have to wait a "reasonable" period of time (likely 90 days), then file another case (and re-serve him) to enforce the judgment. If you won an enforcement, his wages could be garnished, but that is not a slam dunk, as the judge will give him ample opportunity to pay you himself under the guise of "reasonable time period."

The sad fact is that if they guy is unethical and doesn't want to give it back, it can be very hard to get the money out of him. You'd actually have it easier if you were in for $50k instead of only $2k. You made a huge mistake here giving money on a place you didn't even know if you could occupy. You can blame the jerk holding your funds all you want, but your error put yourself in this situation. Call it an expensive lesson learned.

[cdfblair]

Thanks for the information.

[CptnRn]

Originally Posted by SickOfCalifornia

Did you sign any papers when you gave the money? Is there any chance something you signed mitigated his responsibility or limited your ability to inspect?

You should send him a certified demand letter. If that doesn't work, you should hire an attorney to do the same. An attorney's letter is really just hoping that the letterhead of the lawyer scares him into paying, because realistically an attorney is not much help for you in this case beyond drafting an intimidating demand letter. At the end of the day, however, you can't force someone to cut you a check, even if the money is rightfully yours. Your recourse for this amount would be small claims court. You'll have to pay a fee to file, and another to have him served. Assuming he shows up for the court date, the judge will probably send you into the hallway and tell you to settle it. If you still can't settle it and the judge actually hears you out, you probably still only have a 50% chance of winning the judgment. Sometimes these small claims judges can come up with some pretty unusual decisions that seem based less in law than their own whim. And then let's say you win the judgment. The guy could simply not pay you anyway, in which case you have to wait a "reasonable" period of time (likely 90 days), then file another case (and re-serve him) to enforce the judgment. If you won an enforcement, his wages could be garnished, but that is not a slam dunk, as the judge will give him ample opportunity to pay you himself under the guise of "reasonable time period."

The sad fact is that if they guy is unethical and doesn't want to give it back, it can be very hard to get the money out of him. You'd actually have it easier if you were in for $50k instead of only $2k. You made a huge mistake here giving money on a place you didn't even know if you could occupy. You can blame the jerk holding your funds all you want, but your error put yourself in this situation. Call it an expensive lesson learned.

I thought that all of your comments were good except that last bit about "your error put yourself in this situation". I don't see how the OP did anything irresponsible. It is rare to be able to secure a lease without putting down a deposit. And it is not at all uncommon for a lease space to require some remodeling before you can move into it. Which triggers a requirement for permits and a Certificate of Occupancy from the building officials.

The OP had no way of knowing that the owner would not follow through on his obligations. Most do as they are in business to make money from renting the place. It is hard to understand why the owner would not want to get the tenant in the place so he can start collecting rent.

[rickc007]

Small Claims Court

Quick and Painless
Seems open and shut

[SickOfCalifornia]

Perhaps you are right, but shouldn't the OP have conducted the inspection prior to writing a deposit check? If I'm wrong here, I apologize for the implication that OP was in error.

As to small claims court being quick and painless - sound like someone who hasn't been to small claims court before. It is anything but quick, and I have seen more than a few slam dunk cases go the other way. I had a friend buy a car for $1,000. The car was delivered and wouldn't start. He sued in small claims court because the running car he purchased wasn't the car that was delivered. The judge looked at him and said "I just paid $50,000 for my latest car, I don't know what you were expecting for $1,000." That's not a judgment based on the law, but it is all too often the type of judgment you will see in small claims court. The reasons those daytime judge shows are still on the air after so many years is because so often the judge makes a ruling that seems to be the complete opposite of what any reasonable person would predict. If Judge Judy or Judge Joe Brown simply ruled in favor of the obvious winner every time, no one would watch. Small claims court is just like this. Which is not to say that it doesn't often work, but it also often doesn't and for reasons that will usually seem baffling to the losing party. I would try any legal method available before going to small claims court, because once there it is a virtual coin toss and you are stuck with the decision.

[CptnRn]

Originally Posted by SickOfCalifornia

Perhaps you are right, but shouldn't the OP have conducted the inspection prior to writing a deposit check? If I'm wrong here, I apologize for the implication that OP was in error.

I do think you are mistaken here, based on my experience as the architect on dozens or large lease space remodeling projects for office, commercial and government facilities.

1. Few property owners are going to go to the expense of remodeling a building space for a prospective tenant without having a firm contract and deposit in place.

2. The building owner is typically responsible for any permits for, remodeling and obtaining Certificates of Occupancy for any work done to his property, not the tenant.

3. In the OP they did not conduct an inspection, they went to the permit office to verify that a Certificate of Occupancy (CO) had been issued to allow them to occupy the premises. The inspections are performed by the permit office for code compliance. The tenant may perform his own inspection to verify the remodeling mets the requirement of his contract, but he has no authority over the CO.

The tenants only legal recourse if the owner can not provide him with a lease space that can be legally occupied, is to request a refund and possibly sue for damages cause by the owner's failure to deliver the property. Damages alone could easily exceed the deposit by huge amounts.

[cdfblair]

Thanks for all of your information and advice.