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[CA] Is a lease considered terminated if a landlord voluntarily refunds the deposit before move in?
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I need a real estate lawyer.
I understand that you need immediate assistance with a real estate issue. Can you please describe the specific situation or problem you are facing?
The landlord wants the deposit back after she sent it to me.
Have you already taken any steps to address this issue, such as contacting a real estate agent or another lawyer?
No.
Is there anything else the Real Estate Lawyer should know before I connect you? Rest assured they'll be able to help with your deposit dispute.
No.
Hi, I'm reviewing your question now. I'll help you with this.
I understand why that's concerning.
Please tell me what happened after your landlord returned the security deposit and why they are now asking for it back. I'll help you understand your legal options.
A couple of weeks ago, I agreed to lease an apartment for $6,000 per month with a $3,000 security deposit, and the move-in date was July 2. Before I moved in, I had a change of heart. My realtor informed the landlord that I would no longer be moving in and asked if she would return the money I had paid. She agreed over the phone to my realtor, refunded me in full, and even texted me saying something along the lines of, "Here's your full payment back. Let me know if you change your mind, you're always welcome." I thanked her and told her I would let her know. A few days later, despite the fact that I never moved into the property or took possession, she demanded $9,000 back and said that if I don't pay it, she's going to sue me. She told my realtor this. My question is: since she voluntarily refunded my money and agreed to cancel everything, is the lease considered terminated? Or can she still sue me for the $9,000 after refunding me and canceling the arrangement?
Based on what you've described, your position appears to be favorable. If the landlord voluntarily refunded all of your money and communicated that the arrangement was canceled, that can be strong evidence that both parties mutually agreed to terminate the lease. If that is what occurred, it may be difficult for the landlord to later claim you still owe the rent or deposit.
That said, whether she can sue is a different question. Anyone can file a lawsuit, but she would still have to prove that the lease remained in effect despite the refund and her communications. Keep the text messages, proof of the refund, and any communications from your realtor, as those could be important evidence if a dispute arises.
Based on what you've described, the lease was likely terminated by mutual agreement when the landlord voluntarily refunded your money and agreed to cancel the arrangement. If that is what occurred, she would generally not be entitled to later demand the $9,000 under that lease. Under California Civil Code Section 1698, a written contract, including a lease, can be modified or rescinded by an oral agreement to the extent that agreement has already been carried out, or "executed," by the parties. Here, the landlord's spoken agreement to cancel, followed by her actually sending the refund, fits that pattern and supports treating the lease as mutually rescinded even though the original agreement was in writing.
So my question is: even though she talked to the realtor about returning my money and was fine with the lease not going through, is that still valid? In other words, is it okay that she agreed through my realtor rather than directly with me, even though we had previously signed a legally binding agreement?
The fact that the landlord communicated through your realtor rather than directly with you does not, by itself, change the analysis. If your realtor was acting on your behalf and the landlord agreed to cancel the lease and voluntarily refunded your money, that can still support the conclusion that the lease was terminated by mutual agreement, even though you had previously signed a binding lease.
Was the realtor representing you?
The realtor represents both of us.
More questions just to re-confirm, sorry if I'm asking again.
- My realtor spoke directly with the landlord and told her I would no longer be moving forward with the lease. She agreed, said it was okay, and agreed to refund all of my money. Even though I wasn't personally on that call, does that conversation between my realtor and the landlord constitute a binding agreement to cancel the lease, even though it's not in writing?
- After that, the landlord texted me saying she was sending my full payment back and that I was welcome to let her know if I changed my mind. Does that text further support that we mutually agreed to terminate the lease?
- Even though we had signed a lease before all of this happened, once she voluntarily refunded my money and agreed to cancel everything, is that lease agreement generally considered terminated, or could it still be enforceable in court despite the later refund?
- Based on what you've described, the conversation between your realtor and the landlord can constitute a binding agreement to cancel the lease if the realtor was authorized to act on your behalf and the landlord agreed to the cancellation. An agreement to rescind a lease does not necessarily have to be in writing, although written evidence makes it easier to prove.
- The landlord's text saying she was returning your full payment and that you were welcome to let her know if you changed your mind further supports your position that both parties mutually agreed to terminate the lease. That text is likely to be one of your strongest pieces of evidence.
- Based on those facts, the lease was likely terminated by mutual agreement when the landlord agreed to cancel the arrangement and voluntarily refunded your money. While the landlord could still file a lawsuit, she would have to overcome the evidence of the later agreement to cancel, including the refund, the text message, and the communications through the realtor.
The fact that the realtor represented both of you does not, by itself, change the analysis. If the realtor was authorized to communicate with both parties and the landlord agreed through the realtor to cancel the lease and voluntarily refunded your money, that is still strong evidence that both parties mutually agreed to terminate the lease, despite having signed a binding agreement beforehand.
The refund, the landlord's text message, and the realtor's communications are likely to be your strongest evidence if the landlord later tries to pursue the $9,000.
If she sues me, how strong do you think her case is based on these facts? Does the fact that I never took possession or moved into the property make a legal difference? Does voluntarily refunding my money amount to a mutual rescission (cancellation) of the lease under California law? Does my realtor have the authority to make that cancellation agreement on my behalf, assuming the landlord agreed? If she accepted the cancellation and refunded the money, can she later change her mind and demand payment? What evidence would be most important if this ended up in court (texts, refund records, realtor's testimony, etc.)? Should I respond to her demand, or is it better not to communicate until I have legal representation? If she files in small claims or civil court, what should my next steps be? Could she recover damages only if she can prove actual losses, or does the refund change that analysis? Based on what I've told you, is there anything I'm overlooking that could affect my case?
Her case does not appear particularly strong if she voluntarily agreed to cancel the lease and refunded your money, but only a court can make that determination after reviewing all of the evidence.
The fact that you never took possession of the property is a relevant fact and supports your position, although it is not by itself determinative. The refund and her agreement to cancel are consistent with a mutual rescission of the lease under California law if both parties agreed to end the contract.
If your realtor was authorized to communicate on your behalf, the realtor generally could communicate and reach that agreement with the landlord. Once a mutual cancellation has been agreed to and carried out by refunding your money, it is generally difficult for a party to later change their mind and seek to enforce the original lease. That would be an issue for the court to decide if litigation were filed.
Your strongest evidence would likely be the landlord's text message, proof of the refund, any messages between you and the realtor, and the realtor's testimony regarding the landlord's agreement to cancel. If the landlord makes a demand, it is reasonable to respond briefly that you believe the lease was mutually canceled and that the funds were voluntarily refunded. Avoid arguing back and forth. If you are served with a lawsuit, respond by the deadline and preserve all of your evidence.
If the case is filed in small claims or civil court, gather your documents, organize the timeline, and present the text messages, refund records, and any testimony from your realtor supporting the cancellation. A claim for damages would generally require the landlord to establish a legal basis for recovery. The refund and subsequent cancellation agreement are important facts that could significantly affect that analysis.
Based on what you've told me, the main issue is preserving all of the communications and documentation showing that both parties agreed to cancel the lease. Regarding your last question, I am a licensed attorney and I'm able to assist with landlord-tenant and real estate matters through this service. My focus here is on helping you understand your legal rights based on the facts you've shared.
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