CUCCHISSI BRANDON v. PECKELIS LLC 28 LLC (2019)

Decision After Hearing

The Plaintiff has brought this action for the return of her $3,200 security deposit that was given on July 8, 2013 with a lease application for a rental at 30A Sintsink Drive West, Port Washington from owner, WILLOWDALE PROPERTIES LLC.

A lease agreement was never entered into due to an inability to agree upon certain terms in the lease. Despite a demand, the security deposit was never returned to plaintiff.

FINDING OF FACTS

The rental application contained the following language:

TENANT ACKNOWLEDGES THAT HE/SHE HAS BEEN INFORMED THAT THE LANDLORD WILL TAKE THE SUBJECT PREMISES OFF THE RENTAL RENTAL MARKET, TENANT AGREES THAT IN THE EVENT THAT HE/SHE DECIDES NOT TO RENT THE PREMISES AND THE LANDLORD IS UNABLE TO PROCURE A SUBSTITUTE RENTAL TO COMMENCE ON THE COMMENCEMENT DATE, THAT IN SUCH EVENT, LANDLORD MAY RETAIN THE SECURITY DEPOSIT AS LIQUIDATED DAMAGES.

The lease agreement listed the owner as WILLOWDALE PROPERTIES LLC.

Negotiations concerning the lease broke down on July 24, 2013 with the defendant's representative stating that the landlord would not agree to any further lease modifications.

On July 25, 2013 plaintiff advised the defendant, PECKELIS, by telephone, that she was renting another space and requested a return of her security deposit in writing. The subject property was rented to a third party on August 20, 2013.

APPLICABLE LAW

GENERAL OBLIGATIONS LAW § 7-103. Money deposited or advanced for use or rental of real property; waiver void;

3. Any provision of such a contract or agreement whereby a person who so deposits or advances money waives any provision of this section is absolutely void.

Where a proposed lease is never executed and the application is no more than an offer to lease subject to negotiation, a landlord must return the security deposit notwithstanding the presence of a liquidated damage provision, see Rivertower Assoc. v. Chalfen, 153 AD2d 196 (1st Dept. 1990).

A security deposit belongs to a tenant and may only be used by a landlord where there has been a breach of lease, Ankhbara v. Sharplis-Esprit, 2015 NY Slip Op. 50699 (2nd Dept. 2015).

The language chosen by the defendant in the rental application clearly refers to the $3,200 as a security deposit. Therefore since no lease was entered into, the $3,200 cannot be retained by the landlord based upon an alleged breach by the plaintiff, notwithstanding a provision in the lease application for such retention as liquidated damages, Sidham v. Washington Square Realty Corp., 95 Misc 2d 825 (1st Dept. App. Term 1978).

Since there was no valid lease entered into between the parties plaintiff is entitled to return of the security deposit's return.

Decision After Hearing

Based upon all of the foregoing, plaintiff is entitled to a refund of her security deposit from WILLOWDALE PROPERTIES LLC. in the amount of $3,200.00, with interest from July 25, 2013. The action as against the remaining Defendants is dismissed.

So Ordered.

Gary M. Carlton, J.