IF I CANCEL MY CO-OP APT APPLICATION BEFORE THE BOARD RENDERS ITS DECISION, CAN THEY KEEP THE SECURITY DEPOSIT?
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IF I CANCEL MY CO-OP APT APPLICATION BEFORE THE BOARD RENDERS ITS DECISION, CAN THEY KEEP THE SECURITY DEPOSIT?
I applied for a co-op apt via a board approval process last week and the process involved waiting to hear back. To apply, I had to sign a lease and enclose a $1,675 security deposit (one month’s rent). I now want to cancel my app. Since I signed the lease, I would normally think they can keep my deposit. However, the lease start date is about a month from now AND the lease clearly states that it becomes legally active three days after the board approval, and the board has not yet rendered it’s decision. Can they legally keep my deposit? What happens if I stop the check?
Asked on May 11, 2011 under Real Estate Law, New York
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
What you have here is a contract that is based upon what used to be called a "condition subsequent" meaning that the contract is not valid until the condition is met. Here the condition that needs to be met is your being approved by the board. How the clause ion the contract is written and reading the contract in its entirety is important here in giving any guidance in this matter as to how the court would interpret the contract: as void or voidable. I would not, however, cancel the check just yet. Seek some guidance by someone who can read the contract for you and make a determination. I think that the law is tipped in your favor but again, one would need to do further research here. Good luck.
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