Planning on signing a new apartment lease - can I get back a nonrefundable holding deposit due to natural disaster (i.e. COVID-19)?

Question

Recently I put down a holding deposit for an apartment I intend to move into next month (April 1). However, with the spread of COVID-19, moving in 2 weeks' time could be risky, or potentially impossible if I am quarantined. And, I don't know how many months I could be quarantined for.

Regarding the holding deposit, I was told:

• it's nonrefundable if we are approved (we were)
• this deposit would be treated as part of our security deposit

Unfortunately I did not think to get a receipt or any of this in writing. I was clear that my move-in date would be April 1, and may have included this in my application. If they refuse to push forward my move-in date due to COVID-19, do I have grounds to receive my deposit back?

I haven't signed a lease yet. So perhaps when I receive the lease for review, it would be a good time to talk about flexibility for the move-in date.

I live in California.

Answer 1

No.

Force majeure does not change contract terms (e.g. making a non-refundable deposit refundable). Rather, it allows parties to get away with not performing their obligations where circumstances beyond their control prevent them from doing so.

In your situation, all parties have performed their obligations so far. You paid the required deposit, they welcome you on the 1st of April.

It would therefore be much more likely that they get away with not refunding you a refundable deposit (if there was one) because of COVID-19 — than you get back the non-refundable one.

Answer 2

Probably not

Assuming that the landlord is ready, willing and able to give you access to the property then they have fulfilled their contractual obligation regardless of if you can move in on that date. The apartment is available for your use; it's not your landlord's problem that you can't use it.

It would appear that there are two contracts here: the one where you paid the holding deposit in return for them holding it - this contract would appear to be complete. If you choose not to follow through with the second contract - actually leasing the premises; then that would not affect the contract that has already happened.

The concept of Force Majeure is not applicable here: both parties appear to be able to fulfill their contractual obligations even if you are quarantined - them to have the apartment available, you to pay the rent. The fact that you can't get the benefit of the contract is not a Force Majeure event. That's even assuming the contract deals with Force Majeure because, in common law jurisdictions, war, famine, pestilence, death and any other horsemen of the apocalypse you care to name do not relieve you of your contractual obligations.