If Ihanded in a rental application but did not sign a lease, ifI changed my mind the next day canI be charged up to 1 month’s rent as liquid damages?

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If Ihanded in a rental application but did not sign a lease, ifI changed my mind the next day canI be charged up to 1 month’s rent as liquid damages?

My application was approved but I didn’t not sign a lease. Since the apartment was only off the market for 1day, aren’t the landlord’s liquid damages just that 1 day of prorated rent? If I am charged a whole month, is this punitive? Is this legal?

Asked on September 14, 2010 under Real Estate Law, New Jersey

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you are unsuccessful in attempting to negotiate a reduction in the amount of liquidated damages, you could file a lawsuit against the landlord challenging the liquidated damages amount.  Unfortunately, that may be an uphill battle.  Although the amount charged is unreasonable, the purpose of liquidated damages is to set a fixed amount of damages when damages would be difficult to determine.  If someone else had wanted to rent that apartment and the landlord said that you had already filed a rental application for the apartment, then the landlord would have also lost that other prospective tenant when you decided not to proceed.  Under those circumstances, additional time would be needed to find another tenant to replace you and the other tenant who was informed that the place was no longer available.


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