Gene Veach's six-month crusade for a $200 refund has cost him 10 times that in time and money.
He's pestered the Texas attorney general, the Harris County district attorney and agents in the Houston office of the Federal Bureau of Investigation.
He's peppered his elected representatives with letters seeking their help in getting back the money, which his adult son gave as an application deposit to a Pasadena apartment complex.
He's phoned newspaper and television reporters asking them to investigate a common practice in the apartment rental business he calls a scam.
"I am not out here desperately seeking $200 that I don't need," said Veach, a Pasadena furniture maker whose creations decorate nightclubs across the country. "I am doing this because apartment owners are keeping people's deposits when they reject their applications."
Although he may be the most persistent complainer, Veach is not the only one sounding an alarm.
About half of all apartment complaints filed with the Better Business Bureau of Metropolitan Houston are from rejected applicants who did not get their application deposits back, the BBB's Dan Parsons said.
The Texas Apartment Association is part of the problem. Its standard apartment rental application form uses the phrase "may or may not" too often and the words "will" and "will not" too infrequently.
The application fee, which covers the costs of checking credit reports, criminal background and rental history, is labeled "nonrefundable."
But the undefined application deposit "may or may not be refundable."
Property owners keep the deposit as compensation for the time the unit was off the market during the verification process if an applicant backs out of renting or lies on the application, TAA lobbyist David Mintz said.
The form's explanation of that, however, is not so simply stated: "The application deposit will be retained by us as liquidated damages if you fail to sign or attempt to withdraw," and "if you fail to answer any question or give false information, we may reject the application, retain all application fees, administrative fees and deposits as liquidated damages for our time and expense."
Liquidated damages is legalese few translate into "we're keeping your deposit," especially since the application fee won't be coming back.
Automobile analogy
State law gives landlords up to seven business days to decide whether they are going to rent to an applicant.
The time the unit is off the market during this process is a cost of sound business practices. Landlords shouldn't reimburse themselves for possible losses with rejected applicants deposits.
When car shoppers spend hours negotiating the price of vehicles and loan terms, but ultimately leave without it, they don't pay the dealer for the time or loss of potential sales.
State Sen. Royce West, D-Dallas, introduced a bill last month that would require landlords to give applicants written notice of why they might be rejected. If they don't, they would have to return the application deposit and fee.
The proposed law also corrects an oversight in the standard apartment application by requiring applicants to sign the rejection notice as proof the information was provided.
Consumers are fine-printed into economic crises every day because they don't read the small-type disclosures they encounter.
That's why hospitals and rental car companies don't rely on customers to read the stuff they should. They tell customers what the forms say and ask them to initial all statements about possible financial consequences.
Going to court
Veach's son didn't read the apartment rental application and lost his money because the apartment complex said he lied on part of the form. The Veachs will try to prove the complex wrong on Thursday in small claims court.
Regardless of the case's outcome, the Legislature should stop apartment landlords from taking advantage of consumers.
More apartment seekers
West's bill should go further by capping nonrefundable application fees and requiring apartment owners to return application deposits to all rejected applicants regardless of the circumstances.
With the subprime lending market faltering as high-risk borrowers default on their high-priced mortgages, there will be more apartment seekers.
What our elected officials didn't do to protect those folks — we all know it doesn't make sense to sign people up for home loans they can't afford — they can now do regarding leasing practices.
Columnist Shannon Buggs has completed the personal finance planning certificate program at the University of Houston. She invites questions and comments, but cannot offer specific advice about individual circumstances. Contact her at shannon.buggs@chron.com.
|
|
|
|
|
|
|
|
|
|
|
|
|
