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Background

I am a college student looking for housing, but a common problem my roommate and I have is confusion about how we are able to ensure that we won't be scammed when paying a security deposit. Most landlords that we find online ask us to send them an online payment urgently so that they can secure the place, but we aren't sure how we can ensure that this would actually be refunded or that the person won't just run off with the money.

The Problem

My roommate and I have been asked to pay a security deposit to a supposed landlord before we have had the opportunity to visit the place and see the person. On the other hand, they have given us a leasing contract that states that it is legally binding and that the deposit is refundable, so is this good enough? Also, what can we do if the name of the account being paid to does not match the name on the contract? For example, they have asked us to pay to their account officer, and we don't really know if that is ok.

I'm under the impression that most agreements made in writing are legally enforcable, including text messages and emails. But what kind of actions can be taken against those who violate these? Also, what language can be used to ensure that a deposit will actually be refunded? Suppose a supposed landlord asked for a security deposit and then ran with it, would we be able to take them to court and take legal actions to get the money back? Would it be worth it, since I'm assuming such legal action isn't always cheap or free? Does this mean that we should never make a payment regarding housing before meeting the person in real life? My roommate and I have had issues with several landlords who have pressured us to make a security deposit in order to secure an apartment before we have had the chance to meet them in person, and we aren't sure if we should be as worried as we are.

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    "On the other hand, they have given us a leasing contract that states that it is legally binding and that the deposit is refundable, so is this good enough?" If it's not a real landlord (i.e., it's a scam), it could be someone who's relatively untraceable, meaning while they'd be legally obligated to return the security deposit, good luck finding them after the fact to get them to return it.
    – Ben Hocking
    Apr 4 at 12:23
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    Where are you (specifically, which jurisdiction)? In Switzerland for example, a security deposit goes into a bank account in your name but you can only withdraw the money with the permission of your landlord (or a court order if the "landlord" is actually a scammer). The rules are going to vary country by country and state by state.
    – Martin Bonner supports Monica
    Apr 4 at 12:38
  • @BenHocking I see, that makes sense. That was what we were worried about.
    – Aathreya Kadambi
    Apr 4 at 19:08
  • @MartinBonnersupportsMonica I am located in California, specifically in Berkeley. I see, in that case how are security deposits distinguished from regular payments? For now, people have asked us to make Zelle payments or payments over other apps.
    – Aathreya Kadambi
    Apr 4 at 19:09
  • @AathreyaKadambi. You don't move in until the landlord has seen the document from the bank showing you have created the account. Regular payments are made by bank transfer (which are free).
    – Martin Bonner supports Monica
    Apr 6 at 10:38

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The bigger problem than the enforceability of the legal documents you receive, on their face, is the authority of the person you are dealing with to take action on behalf of the property owner.

A common scam these days is for someone pretending to be the property owner who actually has no connection to the property owner or the property at all, to obtain security deposits and initial rent payments and lease application fees from online prospective tenants who are doing business sight unseen.

If you do business with the property owner and the property owner wants to back out, you have a legality of the lease problem. But the main problem someone in your situation faces is an bald faced lie about how you are dealing with problem. The legality of the documents will be irrelevant because there is no doubt that the person you dealt with committed a fraud (probably under an untraceable fake name) and ran off with your money.

Your best prospect for avoiding that kind of fraud is to check the county real estate records (which are usually searchable online in urban areas) to determine who owns the property and to independently initiate a contact to that person with contact information you have found, to determine if the person claiming to be the owner really is the owner.

Another option is to not lease a place until you have been granted entry to it by the person purporting to lease it and inspected it, and to obtain temporary housing in the meantime, when you first arrive at the city where you intend to lease a property.

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    This makes sense, thank you! I'll try to find my county's real estate records to figure out who owns the property.
    – Aathreya Kadambi
    Apr 4 at 19:17

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