The landlord wants to give our money back
May 16, 2008 6:18 PM   Subscribe

My management company is giving back everyone's security deposits. Tomorrow. Should we accept?

A notice was posted in my (Chicago) apartment building from the management company stating that they are phasing out security deposits, and instead are charging new tenants a non-refundable $295 administrative fee. As we are existing tenants, we won't be paying this fee, but we will be getting our deposits back.

For a half hour this Saturday, someone from the office will be sitting in the basement laundry room (shudder) to hand us a check with our deposit and interest "upon your signing a receipt/release."

Now, I get that management is probably buying security deposit insurance so they don't have to manage interest-bearing accounts anymore.

But what I find odd is the very short notice (the memo was posted yesterday) and the fact that we aren't seeing any paperwork ahead of time. I mean, why the urgency?

Has anyone else gotten their security deposit back in the middle of a lease? Any reason we should refuse and ask them to hang onto it?
posted by limeswirltart to Law & Government (15 answers total) 2 users marked this as a favorite
Not that you can probably do anything about it one this lease term is up, but both of those options sound like quite the scam. "Application Fees" are bad enough, but nonrefundable security bonds? And worse, the monthly deposit insurance? Ugh.

Be sure to read the paperwork. If it really won't increase your monthly cost, there's nothing to lose, as far as I can tell, except that you'll have some company on your ass should you damage the apartment, rather than the damages just coming out of your deposit. That may or may not be a good thing. I'd hate to see what a long term renter would go through if there was an argument about what constitutes normal wear and tear.
posted by wierdo at 6:27 PM on May 16, 2008

Beware of so simple a premise. Seems a lot like a baited trap.
posted by Freedomboy at 6:43 PM on May 16, 2008

I can't think of any reason to refuse- it's your money.

I also don't see how it's a scam- if you don't like the terms on the thing you are handed to sign, don't sign it.

Check with the City, though. Their apartment laws are bizarre. What this company is doing might not be legal.
posted by gjc at 6:54 PM on May 16, 2008

Take the money. Why shouldn't you?

The descriptions you give for their actions seem perfectly straightforward, even if it is a screw for new tenants in the building. And if they decide to charge you that awful "administrative fee" when you renew, well, you're not going to get out of it by having refused to take your security deposit back.

Of course, you should read whatever paper they want you to assign. I'm assuming that it will just be an addendum to the lease recognizing that there is no longer a security deposit. If its more than that and there are any questions, well, then you can refuse to sign, tell them you want to have your lawyer look at it, or whatever.

If you want more convincing, check out the previous askme questions tagged security deposit. Most of them are from people who have been screwed by landlords refusing to return their security deposit. You should be jumping for joy that your landlord wants to give yours back, early no less.
posted by alms at 7:32 PM on May 16, 2008

Best answer: Take the money. Why shouldn't you?

Because the terms of an early return of the deposit is signing a release agreeing to new terms... which are unknown and potentially unfavorable.

And if they decide to charge you that awful "administrative fee" when you renew, well, you're not going to get out of it by having refused to take your security deposit back.

Except we don't know what's in the existing lease which may have clauses in it dictating what can/will happen on renewing.

This might a plum deal, but we don't know and, let's be frank: how often do changes like this work out in the customer's interest?

If you don't like the deal then I doubt you have to accept it; again: it's all dependent on your lease. Maybe they can make a change mid-stream like this without your agreement, maybe not. I'd say the fact that they're giving back deposits before they have to indicates they don't have to. Any contract requires that both sides get something and perhaps this is their way of satisfying that requirement and motivating people who don't think too many steps ahead.

Check your lease.
posted by phearlez at 7:42 PM on May 16, 2008

Best answer: The landlord is violating the lease. The lease specifies exactly how and when the security deposit will be refunded, and I doubt that this is covered.

Anything you sign could pre-empt the lease. Don't sign anything until you have read everything. You are under no obligation to sign the new terms. Your tenancy is based on the lease agreement.
posted by Pants! at 8:12 PM on May 16, 2008

Hey, are you with MAC, by any chance? TAKE YOUR MONEY. TAKE YOUR MONEY AND RUN FAR, FAR AWAY. If you don't take it now, while they're offering it, I can almost guarantee you that they'll forget that they didn't pay you when the time comes and refuse to give you the money (or at least make it really difficult for you to do so). They are the most incompetently run management company I've ever seen.

Good luck.
posted by phunniemee at 8:20 PM on May 16, 2008

Best answer: Good grief, paranoid people: The existing lease says they'll get their deposit money back as long as limeswiltart doesn't trash the place. That was acceptable when he signed the lease.

Now the landlord wants to return the money early (no tangible benefit to limeswiltart -- he was going to get it back anyway, with interest) in exchange for signing a "release."

Unless the release includes one hundred percent candycanes, this is absolutely not something that is to limeswiltart's advantage. The "take the money" people are born suckers.
posted by gum at 9:33 PM on May 16, 2008

gum, while you're right under normal circumstances, I have to assume you've not dealt with MAC. If that is indeed the management company the OP has, it's better to take the money now. MAC has a monopoly on the buildings in my neighborhood, so nearly everyone is stuck dealing with these idiots. The buzz is that there's a class-action suit forming against them; IN THIS CASE it's better for the OP to take the money now, or risk a major headache later on.
posted by phunniemee at 9:47 PM on May 16, 2008

Taking the money could invalidate the lease, depending on the terms on the new agreement. If that puts the OP in a month to month status, the landlord could evict or raise the rent.
posted by Pants! at 11:27 PM on May 16, 2008 [1 favorite]

OP, have you tried ASKING for the paperwork ahead of time? And this is not a MeFi querstion. This is a lawyer question... call one.
posted by paultopia at 9:20 AM on May 17, 2008

My guess is that Pants is right, the building wants everyone out for some reason, and so they're luring the tenants to opt out of their lease early with the bait being return of the security deposit. If everyone goes for it, I wouldn't be surprised if everyone got eviction notices a week later.
posted by ikkyu2 at 5:40 PM on May 17, 2008

Response by poster: Thanks for all the comments!

Well, this morning my husband and I went to the basement laundry room for the meeting. The owner was standing there with an assistant, with paperwork spread out on the dryers. All the checks were prewritten, and there was a release to sign. The person ahead of us signed without reading and took his check. We started asking basic questions, and asked for a copy of the release. The owner stated that they don't have copies to give out (!) so we took the original and started to walk away. He told us that we couldn't take it, and I said we'd be right back and we scooted out. We went back upstairs and scanned it in. Here's the relevant paragraph:

"... does hereby forever release, acquit and discharge [PROPERTY COMPANY NAME], and the owner of the building at [ADDRESS], and their members and agents (hereafter collectively "Lessor"), from any and all rights of action, demands, claims and potential claims and all causes of action, whether pursuant to statue, ordinance or common law, which in any way relate to the Chicago Residential Landlord and Tenant Ordinance, including but not limited to all claims that relate to Security Deposits or Security Deposit Interest or which arise in any way from any Security Deposit ever held by Lessor in conjunction with any Lease and/or Lease Extension for said premises..."

So, yeah, we'd be giving up all rights provided to us under the Chicago Residential Landlord and Tenant Ordinance. Umm, no.

We took it back down with and said we weren't sure about the language in it so we were going to have a lawyer friend look over it. The owner launched into this long explanation of how security deposits are so hard to manage and this is just simplifying the process, blah blah. In his explanation he also said that if there's damage to the apartment on move-out, they are going to ding the tenant's credit rating if they don't pay up, instead of taking them to court. Nice! Both times when we were in the room, no other tenants came in (sigh).

We just signed a renewal for this place about 6 weeks ago, expiring in May 2009. I can tell you now that we won't be staying after that. And we're not ever signing that form.
posted by limeswirltart at 6:15 PM on May 17, 2008

"So, yeah, we'd be giving up all rights provided to us under the Chicago Residential Landlord and Tenant Ordinance. Umm, no."

I'm not sure how it works in Illinois/Chicago, but where I'm from, the rights granted by the local tenant act still apply even if you (or your landlord) believe you to have 'signed them away' (i.e., the law trumps the contract when the two are in tension) [though keep in mind, IANAL].
posted by astrochimp at 11:00 PM on May 17, 2008

Astrochimp has beaten me to it - it's actually hard to sign away your rights - you can find some information here that talks about liability waivers. If there was language in there indicating you would waive your right to sue and agree to engage in arbitration instead that's much more iron-clad. The above link does, however, list Illinois as one of the states that is more inclined to let waivers stand.

All that said, there's little no good reason in life to sign something that so completely asks for trouble. Being able to eventually prevail in a court of law is little consolation if it makes things take longer and cost more. The clause you paste makes it sound like the waiver you're issuing them is really just about the deposit they're giving you back, but I think you're doing the right thing in simply not being a part of this.
posted by phearlez at 11:32 AM on May 19, 2008

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