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It looks binding to me. You agreed to it in writing and signed the lease. You are obligated to those terms.
Come on buddy, you know better than this.
In my opinion, the tenant is entitled to most but not all of the money back. This is a liquidated damages clause, which is generally enforceable IF (a) it would be difficult to estimate actual damages at the formation of the contract and (b) the amount is reasonable. I don't believe either of those burdens have been met here.
I'd write them a letter offering a compromise of a return of $1000, which would leave them with $500 for their administration fee. Perfectly reasonable solution.
Just because someone puts something in a contract, doesn't make it legal.
I don't think you need a lawyer yet. I think you should send a demand letter at this point. Why spend the money on an atty if you don't have to? Even if you don't get everything perfect in the demand letter, who cares? The idea is to get your money back. If it doesn't work, then get a lawyer. (In my opinion, anyway ...as someone who has successfully sued and won against landlords in small claims court.)
The state of New Jersey requires a LL to mitigate damages. He can only charge you for rent and out of pocket costs for advertising, etc. He obviously didn't lose any rent, and he would then have to prove to a court that his out of pocket costs were $1500. Nice try, is what I say.
I'll cut and paste the court decision that says so below. New Jersey uses common law decision, rather than a statute, but it's just as legal. It's the law in New Jersey.
You are also right about being able to sue for twice your deposit plus court costs, if the LL doesn't return your deposit within 30 days. If you have an envelope that is dated prior to that date, that qualifies.
BTW, you get no credit because the LL rented the apt for $50 more per month, which is why I don't go there in the letter below. I discovered that on this NJ landlord attorney website: http://www.propertymanagerpages.com/...20Premises.pdf This lawyer also says that it's on the LL to prove his costs.
If you are okay with just getting your money back, you might start with a letter like this:
Dear Greedy LL:
After seeking legal advice, I have learned that the clause in your lease requiring one month's rent as an administrative fee in the event a contract is terminated early, is illegal. Illegal clauses in leases are not enforceable.
In New Jersey, a landlord is required to mitigate damages. This was decided in the case Sommer v. Kridel, 378 A.2d 767 (N.J. 1977). You may only charge me for lost rent and actual out of pocket expenses, due to my breaking the lease early.
As I never moved into the unit, and as you were able to rent the unit only 3 days after I broke the agreement, which was prior to my move-in date, you did not lose any rent.
If you could prove out of pocket expenses for advertising, etc., I would have been willing to pay for those. New Jersey law requires the landlord to prove out of pocket expenses.
However, you also failed to return my security deposit within the 30 days required by law. The postmark shows that the deposit was mailed 31 days after I notified you that I would not be moving into the apartment.
New Jersey law states that if a landlord does not return a security deposit within 30 days from the date the tenant vacates the premises, the tenant may sue to recover double the amount due, plus court costs.
I would like to avoid going to court, therefore, I propose a settlement agreement. I propose that I will forego suing you for the withheld rent, and twice the security deposit, plus my court fees, etc., if you will simply return the full amount of the rent you withheld, in the amount of $1500.00, by _____________(date - say 7 - 10 days?), to the address below.
If I do not receive $1,500.00 by _________________(date above), I will assume that you have refused my offer to settle this matter out of court.
New Jersey
Sommer v. Kridel, 378 A.2d 767 (N.J. 1977). The court stated:
We granted certification in these cases to consider whether a landlord seeking damages from a defaulting tenant is under a duty to mitigate damages by making reasonable efforts to re-let an apartment wrongfully vacated by the tenant. Separate parts of the Appellate Division held that, in accordance with their respective leases, the landlords in both cases could recover rents due under the leases regardless of whether they had attempted to re-let the vacated apartments. we now reverse and hold that a landlord does have an obligation to make a reasonable effort to mitigate damages in such a situation. We therefore overrule Joyce v. Bauman to the extent that it is inconsistent with our decision today.
If the landlord does not return the security deposit within 30 days from the date the tenant moves out of the premises, the tenant may sue to recover double the amount due, plus court costs. If the amount sought is $3,000.00 or less, the tenant may sue in the Small Claims Section. If the amount sought does not exceed $15,000.00, the tenant may sue in the Special Civil Part. If the amount sought exceeds $15,000.00, the tenant must sue in the Law Division.
--------------------
Go get 'em!
I disagree, I know you are trying to be helpful, but you are giving really lousy advice here. You are quoting case law regarding what damages can be withheld from a security deposit, this is a different situation.
The Tenant agreed in advance to an administrative fee that he would owe if he broke the lease. He is obligated to fulfill that contractual agreement.
Quote:
"Tenant acknowledges that the Landlord will incur administrative costs and
fees as a result of Tenant vacating the Premises prior to the end of the Term which Landlord would not
have otherwise incurred if Tenant had not breached the terms of this Agreement. In the case that Tenant
vacates prior to the end of the Term, Tenant shall pay to Landlord an Administrative Fee equal to one
month’s Base Rent. Landlord retains the option, in its sole judgment, to waive this fee, when Tenant meets
all his/her obligations of this Agreement for the entire term, despite the early termination of this Agreement."
A lease is a form of contract, its not uncommon at all for contracts to have clauses such as this included. For example, almost all construction contracts include liquidated damages clauses requiring the contractor to pay liquidated damages (an administrative fee) if the contractor fails to complete the work on time. The liquidated damages are agreed to in advance to negate the need for the long drawn out damages disputes that can occur in court if there were no liquidated damages agreed to in advance. I believe this similar type of administrative fee is perfectly legal and enforceable in lease contracts. We have heard of numerous states in this forum here where this is common practice.
In my opinion it would be foolish for the tenant to pursue a lawsuit over this, all he is likely to accomplish is adding additional court costs onto the damages he already owes, to compensate the landlord for this frivolous lawsuit.
In my opinion, the tenant is entitled to most but not all of the money back. This is a liquidated damages clause, which is generally enforceable IF (a) it would be difficult to estimate actual damages at the formation of the contract and (b) the amount is reasonable. I don't believe either of those burdens have been met here.
I'd write them a letter offering a compromise of a return of $1000, which would leave them with $500 for their administration fee. Perfectly reasonable solution.
The unit was re-rented in 3 days. This cost him $500 in what? Labor? Sorry, it isn't difficult to estimate actual damages here, IMO. Let him figure out the cost of labor and advertising. This is a rip-off clause, IMO. Why offer to let the LL keep $500 on the first attempt to negotiate? Come on Bosco, you're better than that lol! First you offer not to sue, if you get it ALL back. AND it's fair and reasonable.
If the LL is too stupid to take that offer, he deserves to get stung with the additional penalty for the deposit. IMO.
Quote:
Originally Posted by CptnRn
I disagree, I know you are trying to be helpful, but you are giving really lousy advice here. You are quoting case law regarding what damages can be withheld from a security deposit, this is a different situation.
No, the case law is regarding mitigating damages when a tenant breaks a lease. It has nothing to do with security deposits.
The Tenant agreed in advance to an administrative fee that he would owe if he broke the lease. He is obligated to fulfill that contractual agreement.
The tenant can agree to slaughter his neighbors chickens if the landlord puts it in the lease. Doesn't make it a legal clause - or binding under the law, if it's, in fact, illegal to kill the neighbor's chickens. Crooks do this all the time. That's why there are laws that say you can't do it. Contract clauses that are contrary to the law, are unenforceable.
A lease is a form of contract, its not uncommon at all for contracts to have clauses such as this included. For example, almost all construction contracts include liquidated damages clauses requiring the contractor to pay liquidated damages (an administrative fee) if the contractor fails to complete the work on time. The liquidated damages are agreed to in advance to negate the need for the long drawn out damages disputes that can occur in court if there were no liquidated damages agreed to in advance. I believe this similar type of administrative fee is perfectly legal and enforceable in lease contracts. We have heard of numerous states in this forum here where this is common practice.
Sure, lots of liquidated damages clauses in contracts. But, they must meet the requirements for a liquidated damages clause. This one doesn't.
In my opinion it would be foolish for the tenant to pursue a lawsuit over this, all he is likely to accomplish is adding additional court costs onto the damages he already owes, to compensate the landlord for this frivolous lawsuit.
This would hardly be a frivolous lawsuit. The law is completely on the tenant's side.
Expecting to keep $1500 for supposed "losses" over 3 days work and no lost rent - is unreasonable. And against the law. The law also states that that security deposit had to be postmarked within 30 days. It wasn't. Doesn't say the tenant has to give the LL 31 days. Or 53 days. Or 100 days. 31 days - you're out.
It's prudent to offer a settlement. Completely legal to say, I won't sue you if you do this. If this goes to court, a judge will wonder why the LL wasn't smart enough to take the settlement agreement. IMO.
Just for edification purposes. Here's what a liquidated damages clause has to conform to:
Damages can be liquidated in a contract only if (1) the injury is either "uncertain" or "difficult to quantify"; (2) the amount is reasonable and considers the actual or anticipated harm caused by the contract breach, the difficulty of proving the loss, and the difficulty of finding another, adequate remedy; and (3) the damages are structured to function as damages, not as a penalty. If these criteria are not met, a liquidated damages clause will be void.
Just an update for everyone who was kind enough to offer their advice. I met with a real estate attorney today and he believes that I have a case since the LL did not suffer any economic damages (by re-renting the unit so quickly). The apartment advertise openings on their website, so their cost to recoup that cost would be minimal.
He is going to write a letter asking for $1,400 of the $1,500 back. And add that my security deposit wasn't returned in the proper amount of time, hoping this spurs them into returning the money.
The only bummer is, is that he thinks I will probably have to go to small claims court to recoup the money. Which I am more than willing to do.
Just an update for everyone who was kind enough to offer their advice. I met with a real estate attorney today and he believes that I have a case since the LL did not suffer any economic damages (by re-renting the unit so quickly). The apartment advertise openings on their website, so their cost to recoup that cost would be minimal.
He is going to write a letter asking for $1,400 of the $1,500 back. And add that my security deposit wasn't returned in the proper amount of time, hoping this spurs them into returning the money.
The only bummer is, is that he thinks I will probably have to go to small claims court to recoup the money. Which I am more than willing to do.
I think most of the responders realize you probably are in the right in terms of the legal aspects. But the issue is, is it worth it to go to small claims court and deal with all that nuisance and costs, just to get some portion of the money back. If you can recoup nearly the whole 1500 dollars maybe it would be worth it. But I have a feeling it would be a lot less, and if you subtract all fees and costs maybe you'd get a few hundred dollars back. But this is probably for a lawyer to know for sure.
If you do go to small claims, try to get on Judge Judy btw
Just an update for everyone who was kind enough to offer their advice. I met with a real estate attorney today and he believes that I have a case since the LL did not suffer any economic damages (by re-renting the unit so quickly). The apartment advertise openings on their website, so their cost to recoup that cost would be minimal.
He is going to write a letter asking for $1,400 of the $1,500 back. And add that my security deposit wasn't returned in the proper amount of time, hoping this spurs them into returning the money.
The only bummer is, is that he thinks I will probably have to go to small claims court to recoup the money. Which I am more than willing to do.
That's good news.
But I think your security might have been returned to you in the proper amount of time, and with no time to spare.
You terminated your lease on 12/16 and received your security deposit back on (or it was post marked by) 1/15. In NJ your security has to be returned to you within 30 days after termination, and 1/15 was within 30 days AFTER you terminated.
I understand the landlord has some damages and I am willing to compensate for not living up to my responsibility. But he in no way, suffered over $1,500 in damages. As I noted, he rented the place in 3 days at a rent $50 a month higher than mine.
All's I want is a fair portion of my money back. And he keeps referring to this administration fee which has nothing to do with me since I never took possession of the apartment. And if keeps playing hardball with me, I am going to bring up the fact he didn't return my security deposit until 31 days after I told him I wouldn't take possession.
I understand what you want. I just don't see how the LL is required to do it.
Yeah he may be "overcharging" you but you agreed to the penalty of forfeiting one month rent amount. Weather he re rented the property for more money 3 days later is inconsequential to the agreement you had with him.
What was the date stamp on the envelope? As long as it was mailed within the allotted time he is perfectly fine. Hopefully he was smart enough to mail it signature required this way he has proof of mailing dates.
I think you are lucky because if he wanted to be a jerk he could simply not kept you out if the lease. And he would be right.
You can call him and try and negotiate a partial refund. Your other option is to take him to court for the amount you feel he owes you because he was late with the sec dep refund
But I think your security might have been returned to you in the proper amount of time, and with no time to spare.
You terminated your lease on 12/16 and received your security deposit back on (or it was post marked by) 1/15. In NJ your security has to be returned to you within 30 days after termination, and 1/15 was within 30 days AFTER you terminated.
I maybe wrong, but I still think it is 31 days. If you start the clock on 12/16/2013 as Day 1, 1/15/2014 (the day the letter was mailed, I ended up getting it a couple of days later) is Day 31.
Would the first day be 12/17? If so, then it would only be 30 days and I am wrong.
I understand what you want. I just don't see how the LL is required to do it.
Yeah he may be "overcharging" you but you agreed to the penalty of forfeiting one month rent amount. Weather he re rented the property for more money 3 days later is inconsequential to the agreement you had with him.
What was the date stamp on the envelope? As long as it was mailed within the allotted time he is perfectly fine. Hopefully he was smart enough to mail it signature required this way he has proof of mailing dates.
I think you are lucky because if he wanted to be a jerk he could simply not kept you out if the lease. And he would be right.
You can call him and try and negotiate a partial refund. Your other option is to take him to court for the amount you feel he owes you because he was late with the sec dep refund
I am glad I went to see an attorney today. People break leases all the time, and my responsibility for breaking the lease would be the full year's rent if he wasn't able to rent out my unit. However, the landlord has to mitigate his damages which he has done fully and completely, even without my $1,500. It is a huge popular complex and the only costs associated would be the advertising they do on their website and some paper work. Fine take out a hundred or two.
I am not an unreasonable person. I don't want double my security deposit back. I am just using it as a bargaining chip to try and get back a portion of this admin fee.
The attorney also told me that the "administration fee" does not apply to me since I never took possession of the unit, so I would be perfectly within my rights to demand the entire amount back.
I did try to talk to the property manager to negotiate a reasonable amount. He was unwilling to budge so I will take him to court.
I am glad that everyone's lives are so perfect and they never had to back out of a responsibility that they were fully prepared to take on. Not that it matters, but I broke the lease because the new job I got had lost their funding for my position 2 weeks prior to me starting work.
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