Is this landlord doing something illegal? Declined after approval

General Landlording & Rental Properties
9yFollow

Is this landlord doing something illegal? Declined after approval

Christian Wathne
Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes

Hi BP!; this is an interesting question from a different perspective than where I usually sit. I own rental property in Seattle market, but recently moved to the SF Bay area for a few years (W2 reasons) where I am renting. 

I'm wondering if anything illegal happened in this situation...

I  applied for a unit, submitted all the documentation (have excellent credit/income/history/etc). There was some back and forth questions, then a few days later the landlord emailed saying (I added x's to get rid of personal info)...

"I want to thank you for your application and anticipate you will have an enjoyable living experience in your new home.

Attached is the lease agreement for you to review and sign. Please put deposit $2900 to secure the unit within 24 hours. Here is the account information:

xxxxxx

Please mail the signed lease agreement to me at: Once I have received it, I will sign and send you a copy.

xxxxx

If you have any question, please feel free to call me.

Regards,"

I immediately (same day) responded that we were excited to move forward, transferred the funds and printed/mailed the lease agreement back. The landlord acknowledged receiving the funds. Then one week later (yesterday) we get an email from this landlord saying...

"Hi Christian,

I was out of town due to my grandmother passing away. I checked the mailbox last night and I have not received your lease agreement in the mail. I just learnt that one of the owners had reviewed your application and did not want to move forward due to the feedback from your landlord about the frequent loud party. I regret to let you know that I will need to return your deposit to you. Please accept my sincere apology for any inconvenience.

I will send you $2900 check tomorrow at the following address."

I believe the "frequent and loud party" comment is an absolute lie; my current landlord (large company) does not give references over the phone, only fax, and we have never ever had anything remotely close to a party, nor have we ever received any kind of complaint. 

============================

So it was accepted, we paid a deposit, sent a signed lease, then the landlord backed out of the deal for some unknown reason. I don't have any signed lease from this landlord, only the email correspondence. We've of course moved on and will look for another unit; but this was a big inconvenience because it puts us now in a bind and rush. Is this illegal? (in California)

0Reply
28 views

Most Popular Reply

Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y

No signed lease means he has the legal right to cancel. The deal was not completed. Sounds like the entire process was poorly handled if there was no personal interview prior to what appears on the surface to have been a  unprofessional process.

2Reply
See this reply in the discussion

25 Replies

Jump to latestLatest
  • Bram Spiero
    Investor · Fair Lawn, NJ · Member since 2014 · 384 posts · 189 votes
    9y

    Are you going to invest time and money taking this guy to court?

    If not, just let it go.

    0Reply
  • Lana G.
    Escrow Officer · Ewing, NJ · Member since 2017 · 35 posts · 16 votes
    9y
    Had you met this guy in person? Have you gotten your money back? Sounds like this guy never intended to rent to you and has stolen your money. Not sure what you're going to be able to do about it but perhaps consult an attorney. If you do get the money back, then don't worry about the rest, it's not important.
    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    No signed lease means he has the legal right to cancel. The deal was not completed. Sounds like the entire process was poorly handled if there was no personal interview prior to what appears on the surface to have been a  unprofessional process.

    2Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    YOU got scammed.. happens try and recover your money.. GOOD LUCK.

    Flag the posting.. contact post office to let them know about this scam. 

    more than likely your out the funds and now they have your personal information beside. 

    2Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y
    We did tour the unit and met the leasing agent in person
    0Reply
  • Bettina F.
    Investor · Post Falls, ID · Member since 2016 · 606 posts · 699 votes
    9y

    How do you know it was a leasing agent?  If there is a leasing agent, why didn't you sign the lease, transfer funds and get the keys in person?  Sounds like a scam to me, but then I am old school and transact most important business in person.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y

    @Christian Wathne there was an implied agreement that they agreed to rent to you, as long as you provided the money and signed lease. It sounds like you did what they asked.

    My guess is they found a better tenant or decided there was something about you they didn't like. It sounds like they are lying about not receiving your lease and lying about the reference. It could also be a scam.

    The problem you have now is that they sent you a check. I would request a cashiers check in return. A check can be stop paid weeks from now and the money will just come right back out of your account. This could be a scam.

    Assuming you already cashed the check, I would call the issuing bank and talk to them. Explain that you are concerned this could have been a fraudulent transaction. The bank manager can look up the account and review to check for account longevity and to make sure there is not a stream of similar transactions. I would contact your local fair housing and describe the situation. 

    What they did sounds illegal, but is hard to prove and they are banking on you not spending your time fighting it.

    1Reply
  • Rod HanksBusiness Member
    Insurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
    9y
    Why do you think it is illegal for a landlord to change his mind before he signs the lease? If he agreed to lease to you and you met all the qualifications, saw you in person and you are a protected class and then he changed his mind, that would be illegal discrimination. But that's hard to prove. Maybe he found a more qualified tenant and wanted to back out. We just don't know. It sounds like he may have scammed you for the deposit, but I hope I'm wrong and you get your money back asap.
    Rod Hanks Insurance4.9152 Reviews
    WebsiteView Page
    0Reply
  • Chris Purcell
    Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
    9y

    @Christian Wathne

    Let us know if you get your money back

    This is a whole different topic if you don't 

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Rod Hanks:

    Why do you think it is illegal for a landlord to change his mind before he signs the lease? If he agreed to lease to you and you met all the qualifications, saw you in person and you are a protected class and then he changed his mind, that would be illegal discrimination. But that's hard to prove. Maybe he found a more qualified tenant and wanted to back out. We just don't know. It sounds like he may have scammed you for the deposit, but I hope I'm wrong and you get your money back asap.

    I don't think that it is legal to take a deposit after accepting an application and then rent to someone else. They sent a lease and asked for deposit, which implies the application was accepted. Just because something is hard to prove doesn't mean it wasn't illegal. Still, at best the OP could probably get some minor financial remedy. My biggest fear here is that this is a scam and to make sure they get the deposit back.

    http://www.dca.ca.gov/publications/landlordbook/looking.shtml

    This is from CA landlord handbook:

    HOLDING DEPOSIT

    Sometimes, the tenant and the landlord will agree that the tenant will rent the unit, but the tenant cannot move in immediately. In this situation, the landlord may ask the tenant for a . A holding deposit is a deposit to hold the rental unit for a stated period of time until the tenant pays the first month's rent and any security deposit. During this period, the landlord agrees not to rent the unit to anyone else. If the tenant changes his or her mind about moving in, the landlord may keep at least some of the holding deposit.

    Ask the following questions before you pay a holding deposit:

    • Will the deposit be applied to the first month's rent? If so, ask the landlord for a deposit receipt stating this. Applying the deposit to the first month's rent is a common practice.
    • Is any part of the holding deposit refundable if you change your mind about renting? As a general rule, if you change your mind, the landlord can keep some - and perhaps all - of your holding deposit. The amount that the landlord can keep depends on the costs that the landlord has incurred because you changed your mind-for example, additional advertising costs and lost rent.

    You may also lose your deposit even if the reason you can't rent is not your fault - for example, if you lose your job and cannot afford the rental unit.

    If you and the landlord agree that all or part of the deposit will be refunded to you in the event that you change your mind or can't move in, make sure that the written receipt clearly states your agreement.

    A holding deposit merely guarantees that the landlord will not rent the unit to another person for a stated period of time. The holding deposit doesn't give the tenant the right to move into the rental unit. The tenant must first pay the first month's rent and all other required deposits within the holding period. Otherwise, the landlord can rent the unit to another person and keep all or part of the holding deposit.

    Suppose that the landlord rents to somebody else during the period for which you've paid a holding deposit, and you are still willing and able to move in. The landlord should, at a minimum, return the entire holding deposit to you. You may also want to talk with an attorney, legal aid organization, tenant-landlord program, or housing clinic about whether the landlord may be responsible for other costs that you may incur because of the loss of the rental unit.

    If you give the landlord a holding deposit when you submit the rental application, but the landlord does not accept you as a tenant, the landlord must return your entire holding deposit to you.

    1Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y

    You got scammed, just google some of that email.

    https://www.scamwarners.com/forum/viewtopic.php?f=26&t=92611

    0Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y

    Thanks everyone; will keep you up to date with what happens. 

    1Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    This can happen anywhere,, we talked with a couple (owners) in Detroit Lakes MN last weekend,, they had listed their house on Zillow for rent for the  fall,winter,spring season,, the owner was concerned when he spotted 2 ladys walking in his side / back yard.. when questioned they said they were looking to rent the house.. OH really the owner said.. oh, yes they said sorry to interrupt you,,we spoke with your landlord he said not to bother you, that you were moving and we'd only be able to see the outside for now,, we understand we can't see the inside until we've paid the deposit,, your landlord sounds like such a nice PASTOR.. 

    Honestly all a complete scam,,, the guy said,, WELL I"M the owner,, i"M not a pastor and whomever you spoke to is trying to cheat you.. 

    It happens all over..

    Smartest move is don't list exterior photos of house, apt,, keep complete address vague. and check your posting, cross reference like ad's for same neighborhood and don't put signs out in the yards..

    0Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y
    Originally posted by @Deanna McCormick:

    This can happen anywhere,, we talked with a couple (owners) in Detroit Lakes MN last weekend,, they had listed their house on Zillow for rent for the  fall,winter,spring season,, the owner was concerned when he spotted 2 ladys walking in his side / back yard.. when questioned they said they were looking to rent the house.. OH really the owner said.. oh, yes they said sorry to interrupt you,,we spoke with your landlord he said not to bother you, that you were moving and we'd only be able to see the outside for now,, we understand we can't see the inside until we've paid the deposit,, your landlord sounds like such a nice PASTOR.. 

    Honestly all a complete scam,,, the guy said,, WELL I"M the owner,, i"M not a pastor and whomever you spoke to is trying to cheat you.. 

    It happens all over..

    Smartest move is don't list exterior photos of house, apt,, keep complete address vague. and check your posting, cross reference like ad's for same neighborhood and don't put signs out in the yards..

     I'm not sure how this example relates to my situation

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y

    how did you send the funds... ?

    0Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y
    Originally posted by @Matt K.:

    how did you send the funds... ?

     BofA to BofA bank transfer

    0Reply
  • Chris Purcell
    Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
    9y
    Originally posted by @Deanna McCormick:

    This can happen anywhere,, we talked with a couple (owners) in Detroit Lakes MN last weekend,, they had listed their house on Zillow for rent for the  fall,winter,spring season,, the owner was concerned when he spotted 2 ladys walking in his side / back yard.. when questioned they said they were looking to rent the house.. OH really the owner said.. oh, yes they said sorry to interrupt you,,we spoke with your landlord he said not to bother you, that you were moving and we'd only be able to see the outside for now,, we understand we can't see the inside until we've paid the deposit,, your landlord sounds like such a nice PASTOR.. 

    Honestly all a complete scam,,, the guy said,, WELL I"M the owner,, i"M not a pastor and whomever you spoke to is trying to cheat you.. 

    It happens all over..

    Smartest move is don't list exterior photos of house, apt,, keep complete address vague. and check your posting, cross reference like ad's for same neighborhood and don't put signs out in the yards..

    Are you posting how to pull off a real estate sheme online with your name next to it???

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Christian Wathne:
    Originally posted by @Matt K.:

    how did you send the funds... ?

     BofA to BofA bank transfer

    That is the problem. Wire transfers cannot be reversed. You should demand that they wire transfer the money back. 

    If they send you a check, it can be stop paid weeks or even months after you cash it. Once it is stop paid, the money immediately leaves your account, then they withdraw it from their account and close it. 

    These people have already lied to you, so I wouldn't trust them at all. Maybe the best move is to close your account after you cash the check.

    0Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y
    Originally posted by @Joe Splitrock:
    Originally posted by @Christian Wathne:
    Originally posted by @Matt K.:

    how did you send the funds... ?

     BofA to BofA bank transfer

    That is the problem. Wire transfers cannot be reversed. You should demand that they wire transfer the money back. 

    If they send you a check, it can be stop paid weeks or even months after you cash it. Once it is stop paid, the money immediately leaves your account, then they withdraw it from their account and close it. 

    These people have already lied to you, so I wouldn't trust them at all. Maybe the best move is to close your account after you cash the check.

     Valid points no doubt, but... if I give them my routing/account number to transfer, then they would now have my name/address/ssn from the application and bank info 

    Which is worse?

    this situation sucks

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Christian Wathne:
    Originally posted by @Joe Splitrock:
    Originally posted by @Christian Wathne:
    Originally posted by @Matt K.:

    how did you send the funds... ?

     BofA to BofA bank transfer

    That is the problem. Wire transfers cannot be reversed. You should demand that they wire transfer the money back. 

    If they send you a check, it can be stop paid weeks or even months after you cash it. Once it is stop paid, the money immediately leaves your account, then they withdraw it from their account and close it. 

    These people have already lied to you, so I wouldn't trust them at all. Maybe the best move is to close your account after you cash the check.

     Valid points no doubt, but... if I give them my routing/account number to transfer, then they would now have my name/address/ssn from the application and bank info 

    Which is worse?

    this situation sucks

    Every person you have ever written a check to has your account number and routing number. If you can get the money transferred back, then just close the account. Either way, whether it is a check or wire transfer, that account should be closed for your protection.

    I would call the bank and tell them the bank transfer you just made was fraudulent. Tell them it was a rental scam and ask to have your money transferred back. Since both accounts are BOA, they may be able to do it or at a minimum they can freeze the other account pending law enforcement investigation. If it is all above board, then the landlord will be fine and you get your money. If it is a scam, then timing is critical. They are probably scamming multiple people as we speak. 

    Let us know what the bank says and good luck!

    0Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y

    I contacted the current apartment I am renting from and asked them if it is in any way possible that the apartment told this leasing agent that I have 'frequent and loud parties', and got this response....

    From current apartment manager.... "We actually never received a fax from Jen or phone call and we do not give any information out over the phone. That is why I provided the document to you. Our company doesn't even allow us to fill out other rental verification paper work sent from companies. The document that I sent you is the only thing that we can provide when someone is requesting rental verification."

    So this landlord that I was originally approved by then later denied by is a definite liar. 

    As of now (4.5 days after I was told that a check had been mailed to me) I still do not have a check in the mail for my deposit back. Called and left a voicemail with her yesterday and no response. 

    I've reached out to a local lawyer and will be meeting with them tomorrow to review potential case details. 

    0Reply
  • Tracey Smythe
    Investor · Orlando, FL · Member since 2017 · 18 posts · 16 votes
    9y

    I have been following this since the beginning.  Was the lawyer able to help you?  I am assuming that you haven't received any money back from the landlord.

    0Reply
  • Christian Wathne
    OP
    Investor · San Jose, CA, Bellevue, WA · Member since 2016 · 327 posts · 257 votes
    9y

    Hey @Tracey Smythe

    Update on the happenings...the landlord ended up sending me back the money (cashed the check 4 days ago). 

    Now I just have to decide whether to simply move on and forget about it, or sue this scummy liar in small claims court with the goal that it will result in this landlord never again lying about an applicant's references and also never again denying a tenant after they've been approved/paid/sent lease. 

    Quick chat with lawyer gave me the expectations that I should be able to ask for

    - difference in price between a new rental I find vs the one I originally wanted over the term of the lease (around $2400)

    2Reply
  • Richard Elvin
    Investor · Cleveland, TN · Member since 2016 · 279 posts · 187 votes
    9y

    I'm glad you got your money back!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free