Is the landlord obligated to split the deposit refund and send each portion directly, or can the entire lump sum be sent to one of the former tenants - with the understanding that said deposit will then be split among the remaining tenants?
If the deposit IS sent to one of the people (where multiple names are on the lease) is that individual legally obligated to pass along the remaining money?
It goes without saying that they’re ethically or morally obligated, of course. But there’s not really a contract between the individual tenants, so … how does this scenario play out in real life?
(Knowing the U.S.A. this is likely subject to state laws. Speak to your personal expertise, but if I need to select a locale let’s pick Texas, for the shits and/or giggles.)
Did this exact thing in Lousiana – two good friends shared a rental home with me.
After the lease was up, we had all made separate arrangements to live elsewhere. The landlord made out the deposit-return check to all three of us. To cash the check, all three of us had to be present at the bank at the same time to sign the back of the check (I think?) and present ID (definitely).
I don’t know what happens in a situation where the former co-tenants cannot arrange a meeting to conduct such a transaction.
The only time I ever rented with someone I wasn’t married to, I paid the security deposit (my roommate-to-be was overseas), so I got the refund. This was late 1989 to mid 1990.
IMHO, if the deposit is paid by check, the refund should go to whoever wrote that check. If it needs to be divided up amongst roommates, it’s on them.
It depends on if the check was made out to x AND y AND z or x OR y OR z.
Ands, require all people listed to endorse the check. Ors, requires one of them. As for all of them being present, that’s going to depend on your bank.
When I was in the middle a mess with a few roommates, one of whom I sued, the deposit check, IIRC, was listed with ‘and’. I signed my name and at the advice of someone else, signed their names, initialed each of those signatures and deposited the check without incident.
Now, after I served one of the roommates he threatened me with legal action for doing that (in writing). I ignored it. When we were in court, his father and him were yelling at me across the court room about how I forged his signature and they’re going to sue me. The judge finally told them both to knock it off and explained that the full amount of the deposit check was taken into account for how much I was suing him for (that is, I subtracted his share of the deposit from what he owed me).
The continued to yell and scream about my forging their signature and with no prompting from me or previous knowledge as to what I did, the judge said ‘if he signed your name, initialed it and deposited it into his bank account, it’s fine’.
I have no idea if it actually was. The judge was clearly trying to get them to stop yelling. I think even the judge saw how stupid this entire case was (he left in the middle of the lease and decided that he didn’t have to pay rent anymore).
In a perfect world. I’d suggest that the deposit should be returned the same way it was given to them. If one person wrote a check, that person gets the refund. If two of the three roomates split the deposit, each of them get half of it back.
It’s on the tenants to decide how to divvy it up after that.
And while it’s more work, but not that much, for the landlord, it’ll help keep them from getting roped into small claims court.
Actually, what may be even easier for everyone is if the landlord, while signing paperwork with the new tenants, asked them who should get the refund when the lease is up (and inform them that they send out one check and they can split it up on their own). Asking them now when everyone is getting along is surely a lot easier than finding yourself in the middle of roommate disputes after they’ve been living together for a year and they’re arguing about who stained the carpet and who broke scratched the kitchen counter and who paid more rent etc.
A proper lease agreement should provide clear instructions for refunds. If you are entering into a new one, be sure it does.
Similarly, a real estate purchase contract describes who & how any funds advanced before close should be disbursed if a refund becomes necessary. It may or may not be the check writer or even the buyer (sometimes buyers have funds advanced from another party). Since such funds are typically earnest money, and held in a broker’s or title company’s trust account, the instructions must be followed to the letter or the holder may be sued.
Without explicit instructions, only a court or judge can legally decide.
Correct on all counts. The check was written as ‘Ands’, and it was indeed the bank that asked for all three of us to be present. Everything was amicable among my friends and I at the time the lease was up, so two of us were content to let the third cash the check and get us back later on.
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I recall that when we paid the deposit before move-in, we each gave the landlord a separate check, one from each of us for 1/3 of the deposit. Looking back on it, I am not sure why the landlord didn’t just write out three checks to return our deposit. Thankfully, everything was amicable between all parties and everyone was still living locally, so everything sorted itself out with little fuss.
Deposit should be refunded to whomever paid it, whether it was one person or 2+. In the case of multiple people paying a deposit, the entire refund could go to one person if that’s what the tenants wanted, but I wouldn’t agree to this without it in writing from all involved because it could open you up to lawsuits if someone later claimed they didn’t get their share.
There’s no legal obligation to pass on any refund unless the one claiming to be owed money can prove they’ve paid it. Whether they sue the landlord or the person who received all the refund will depend on who they paid the deposit to.