What constitutes a case for bad faith retention of a security deposit?

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What constitutes a case for bad faith retention of a security deposit?

A roommate of ours put a security deposit down to live in our house without signing a lease. She backed out of the living agreement, leaving us with 1 month to find a new roommate before the first month’s rent was due. We were able to find a roommate to replace her but he is living here on a part-time basis and is therefore reluctant to pay a security deposit. Therefore we cannot give her the deposit back, especially since we do not have the money, it was paid to our landlord who still has possession of it. Does she have a case?

Asked on October 23, 2012 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Since your roommate never signed a written lease for the unit that you have written about but placed a security deposit down for it, under the laws of all states in this country you were required to immediately return this security deposit to the person who placed it. The reason is that there is no reason for you to hold it since this person never signed a lease for the unit which would have required a security deposit for it.

The rention of the security deposit could be deemed as being in bad faith.


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