Can a landlord keep money that was meant to hold an apartment?

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Can a landlord keep money that was meant to hold an apartment?

I recently applied for an apartment and was told I needed to give them a $50 application fee and a $150 administration fee which I was told would hold the apartment. The complex actually waived the $50 app fee and told me the $150 was to hold the apartment while they did the background checks. We were offered the apartment but with a double deposit. We declined but now they say the $150 is not refundable. I remember them saying the app fee was not refundable but they waived that fee. They never said the $150 in not refundable. Is this legal? Also, is their a cap on how much they can keep?

Asked on October 14, 2010 under Real Estate Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Two  different issues here:

Legally, a landlord *may* have a nonrefundable application fee, administration fee, or even a deposit to hold an apartment (not a security deposit though, for damages; that is refundable). Administration fees are commonly nonrefundable. And a $150 fee would not be unconscionable  or illegal. The landlord does not  to indicate that a fee or deposit is nonrefundable, however.

Factually then, the issue may be what you were told or knew, or should have known (e.g. by reading any paperwork) about the fee. If there was some reason you should have known it was nonrefundable, then it would seem the landlord could keep it. If  you weren't given that information in some form, then you'd at least have an argument that it should be returned as you were led to believe it was a refundable deposit; though that then gets to a third consideration: is it worth it to fight them for it? If they don't refund voluntarily, you'd need to sue...and even small claims court has some costs.


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