Is it legal for my broker to not return my security deposit on a lease until I sign a document stating that I won’t sue him his fee?

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Is it legal for my broker to not return my security deposit on a lease until I sign a document stating that I won’t sue him his fee?

My broker misrepresented an apartment which I signed a lease for and paid him a broker’s fee for. I managed to relinquish the lease, and he promised the landlord would return my security deposit. My broker called me the other day saying the security deposit is ready to pick up, but said I would need to sign a document saying I would not sue him to get my broker’s fee back before he would give the check to me. I refused to sign it, and now he is refusing to return my check. I always had intention to go to small claims court to get my broker’s fee back. Is this legal? What are my options?

Asked on September 27, 2011 under Real Estate Law, New York

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

It is improper for a real estate broker or licensed real estate agent to refuse to return your security deposit for a rental as a condition for you not to sue him or her for real estate commissions that you may seek the return of.

A full security deposit is typically placed with the landlord for the rental and if so, is to be returned by the landlord to the tenant within a set time period by each state after move out (21 to 45 days typically) and if not returned within that time period, a written itemization setting forth all debit and receipts must be sent to the former tenant within  that time period.

You might wish to report this licensed real estate agent/broker to New York's Department of Real Estate concerning his or her refusal to return your security deposit unconditionally.

Good luck.


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