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I have been renting a small apartment in an old building in Brooklyn for about 2.5 years via verbal agreement (the rest of the tenants do the same and all have been there over 15 years).
Because I'm currently traveling for work (Dec through April) I found a subletter who agreed to move in mid-January through the end of April. I asked her to put down a security deposit equal to the last month's rent.
She came through NY earlier than planned for two days and had to manage some complications around passing over the key and an unexpected need for a plumber (old building, old pipes). We had previously discussed the possibility of an occasional plumber appointment (we as tenants have someone come by 2x a year) because of the building being old, and this was discussed in very specific detail before I left with her understanding.
Nevertheless, she has concerns of being in an old building and has just now decided not to stay in the apartment and expects her security deposit back.
I'm traveling and unable to find a replacement, so will now need to readjust my plans. I realize this is not her concern, but though I'd like to work 'with her', I am now out of a subletter for 3 unanticipated months.
Given that our agreement was verbal (a mistake on my part that I won't repeat), who has the right to the deposit?
I think if the deposit was a holding deposit, so that it would go towards rent, you are entitled to keep it because she did not end up coming in (but you also need to find a new tenant asap).
BUT if you were holding it as security for any potential damages, then I'd think you have to return it. Did she pay rent and security? If so, then as long as she didn't cause damage then it's her security and is entitled (unless NY allows you to use security towards rent).
If I were in your shoes, (And I'm not saying what I am doing is right or legal, it could or could not be) I would tell her that the money she fronted was to reserve the apartmet (last month's rent you called it), and now you have to find someone else, so until then you will keep the last month's rent and prorate it for when you find someone. In other words if you find someone halfway through, great, she gets half back, if you don't, then she loses it all.
Be prepared to fight in court, you have nothing in writing? The fact you called it "security deposit" could be an issue vs. calling it "first month's rent" or a "holding deposit."
Is there anyone who can try to rent it out for you while you are gone?
BTW- does she have the keys? If she does, she has possession and it's not your problem she didn't move in. She will have to move out, you will have to assess if there is any damage, etc, then return deposit.
BTW- does she have the keys? If she does, she has possession and it's not your problem she didn't move in. She will have to move out, you will have to assess if there is any damage, etc, then return deposit.
I'm guessing she does based on the first post - in which case she's out of luck (the subtenant, that is). I'm assuming she was going to pay the rent directly to the LL but if the "security deposit" wasn't specifically acknowledged as such, the OP can certainly retain that as the month's rent - if the tenant hasn't already paid the LL for the first month.
Did you have permission (in writing) from your landlord to sublet? Was your landlord aware of this situation? If not, I would think your agreement with her to sublet to her would be invalid since you weren't allowed to sublet, so you would be wise to return her money lest she sues you.
If you were allowed to sublet, then I think you're still going to have trouble justifying being able to keep her money, since you did not make it clear that it was a holding deposit.
Overall, a tricky situation.
Keep in mind, I'm not a lawyer and I don't play one on tv. You might consider contacting local legal aid for guidance.
Send her a letter itemizing what you deducted from the security deposit. NY law is flexible, giving LL's no specific time period, but the above website says 30 - 60 days. I see no reason for you to delay. Send an itemization letter (showing the deposit amount, and that you are deducting 30 days rent - assuming she hasn't paid the 1st month's rent) with proof of delivery. I'd email it plus send it via priority mail, Fed Ex, UPS, whatever with proof of delivery. A signature would be good, though probably not necessary.
Unfortunately, you are out the rest of the rent you anticipated collecting, as you didn't get a written agreement.
Thanks for the response - I recognize my lack of subletting legal issues and being proactive here made this more complicated. All responses are incredibly helpful!
I think if the deposit was a holding deposit, so that it would go towards rent, you are entitled to keep it because she did not end up coming in. --BUT if you were holding it as security for any potential damages, then I'd think you have to return it. Did she pay rent and security? If so, then as long as she didn't cause damage then it's her security and is entitled (unless NY allows you to use security towards rent).
She did not pay rent and security, the payment was only for the amount of the last month's rent.
If I were in your shoes, (And I'm not saying what I am doing is right or legal, it could or could not be) I would tell her that the money she fronted was to reserve the apartmet (last month's rent you called it), and now you have to find someone else, so until then you will keep the last month's rent and prorate it for when you find someone. In other words if you find someone halfway through, great, she gets half back, if you don't, then she loses it all.
Agreed.
Be prepared to fight in court, you have nothing in writing? The fact you called it "security deposit" could be an issue vs. calling it "first month's rent" or a "holding deposit."
Clearly I'm not a lawyer either. I'd noted (in an email) that it would be "a deposit" that could be used toward's last months rent. I did not even call it a security deposit.
BTW- does she have the keys? If she does, she has possession and it's not your problem she didn't move in. She will have to move out, you will have to assess if there is any damage, etc, then return deposit.
She moved in for two days, handled the plumbing, and left for a week. And then just emailed me that she came back for a day and moved all her things out.
Did you have permission (in writing) from your landlord to sublet? Was your landlord aware of this situation? If not, I would think your agreement with her to sublet to her would be invalid since you weren't allowed to sublet, so you would be wise to return her money lest she sues you.
Yes, the landlord was aware of all of this, and/though all I have are our emails discussing this (no written agreement).
Because your agreement is verbal, it is automatically considered a month-to-month agreement.
So, she agreed to move in mid-January. You were unable to find a replacement.
I think you can consider her saying she's backing out, as giving her 30 day notice to move out, which is required for month-to-month agreements.
So, she owes you 30 days rent (mid jan to mid feb).
If she didn't pay you any rent, then you get to take 30 days rent out of her deposit.
But, be sure you treat the deposit properly under NY law.
Super helpful. I was hoping this would be the case (that I was entitled to keep the payment to apply towards the rent) and the 30 day notice does make sense. I will review the link you sent.
Unfortunately, you are out the rest of the rent you anticipated collecting, as you didn't get a written agreement.
Yup. I expected this! (won't make this mistake again)
She moved in for two days, handled the plumbing, and left for a week. And then just emailed me that she came back for a day and moved all her things out.
Yes, the landlord was aware of all of this, and/though all I have are our emails discussing this (no written agreement).
Ah, I misunderstood your OP, I didn't realize she'd actually moved in, then moved back out. And since your landlord was ok with the situation, I'd say I agree with the other comments above that the deposit would count toward rent you didn't receive. Be sure to do the itemized deduction that NoMoreSnowForMe mentioned, and I think you should be covered.
The original agreement was for a move-in mid-January, and I'd agreed to prorate the rent for the time she was in the apartment (let's call it roughly $750).
Upon her having to handle the plumbing bills ($300), I asked her to please deduct this from the rent she was going to be due to me (January's prorated rent $750 minus plumbing bill at $300, amount due to me of $400).
Given that she stayed for two days (encountering plumbing issue), and then returned for two more days in late January to move her things out, and has how asked to be compensated for the plumbing (in addition to the deposit from my previous question), where does responsibility for payment fall?
My first thought was that as it's my apartment, I am responsible for maintenance of the apt/payment for plumbing (seemed fair when she was planning to sublet).
Is there any change in this perspective, considering that she did not pay the pro-rated January rent?
Sorry for all the questions. I've really appreciated all the help.
The original agreement was for a move-in mid-January, and I'd agreed to prorate the rent for the time she was in the apartment (let's call it roughly $750).
Upon her having to handle the plumbing bills ($300), I asked her to please deduct this from the rent she was going to be due to me (January's prorated rent $750 minus plumbing bill at $300, amount due to me of $400).
Given that she stayed for two days (encountering plumbing issue), and then returned for two more days in late January to move her things out, and has how asked to be compensated for the plumbing (in addition to the deposit from my previous question), where does responsibility for payment fall?
My first thought was that as it's my apartment, I am responsible for maintenance of the apt/payment for plumbing (seemed fair when she was planning to sublet).
Is there any change in this perspective, considering that she did not pay the pro-rated January rent?
Sorry for all the questions. I've really appreciated all the help.
She doesn't get out of having to give you 30 days notice to move. So, she owes you 30 days rent.
How most management companies work pro-rated rent, is they collect 30 days rent up front, then charge the prorated amount the following month. That's what happened to me here in my new apt. There is absolutely no reason for you to only charge her the prorated rent for January.
Then deduct the plumbing from that - but ONLY if you have a receipt for it. Make her get you a receipt first. If she can't produce one within the time for you to return the deposit by NY law, then send her just the itemization saying she owes you 30 days rent, therefore, no money is due to her. However, when/if she can produce the plumbing bill she claims to have paid, and you are able to validate it, then you will reimburse her for the plumbing bill.
You're being far too nice. 30 days less a validated plumbing receipt is more than fair. You only have to be fair here. No need to let her rip you off any more than she already has.
BTW: Can you get your LL to reimburse you for the plumbing bill? I hope so.
I agree, she owes you at least 30 days of rent. She's paid 15. I also agree you need a copy of the receipt.
When you get that copy, then tell her she owed you a 30 day notice therefore technically owes you.
Also, this is why you get the first months' FULL rent, then prorate the second month. So she should have paid $1500 for a full month rent, then the next month $750.
Hope you can get back soon to square it all away.
Not sure how NY works, but in some states you might be able to sue her for the entire lease since you stipulated you'd be out of the country and unable to find a new tenant while gone.
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