By Lew Sichelman
Realty QA is a weekly column in which Lew Sichelman, a nationally syndicated columnist who has been covering the housing market for more than 40 years, responds to readers’ questions on real estate.
WASHINGTON (MarketWatch) — Question: I am totally disgusted. I wouldn’t have been surprised at not receiving my deposit back if I rented a house through Craigslist. But I rented it through an Irvine, Calif., real-estate agent and his company has done absolutely nothing to help me get my deposit back, even though its agent represented the landlord. I don’t understand what advantage one gets by using a real-estate agent. I thought they would help with this kind of thing.
In November, Carolyn Gage moved back into the foreclosed home from which
she was evicted in early 2011 — the home her father built, and where
she grew up. But is that a viable strategy for struggling homeowners? It
More home-buying advice
• The top 10 most walkable cities
• Where small houses are big sellers
We lived in a rental house for five years, and moved out in late August. The company represented both the owner, who was one of the firm’s agents, and us, but they were not property managers. The lease we signed said we were responsible for painting the interior when we left. I later found out that since we were there so long, we really were not required to do so. But we did so anyway.
The owner did a walk-through with us when we vacated the place and confirmed in writing that he would refund $3,040, subject to a couple of items being completed. We finished the items, but two weeks ago, he left a message saying some other items were damaged. We sent him pictures and a move-in checklist showing that the damage was there when we moved in. The landlord hasn’t said anything since then, and it has now been almost three months since we moved out.
We would sue him in small-claims court but we don’t have his address. The lease shows the real-estate company’s office, but California’s Department of Real Estate shows he no longer works there. Can you provide any other guidance or reference guides? Do we have any recourse against the company? You would think that such a big organization would know the law. It took me only five minutes to discover that the interior paint requirement was invalid. Do we sue the company or the owner, or should we file a complaint with the DRE? I feel a bit stuck. —C.S.
Answer: First, let me start by saying this is an advice column, not Action Line, so I can’t do this for everyone. But it just so happens that during the recent National Association of Realtors convention in Anaheim, Calif., I was able to discuss your situation with an executive of the real-estate franchise operation you mentioned in your question, the name of which I have purposely edited out here. He looked into the matter, and here is what he reported back to me.
As you discovered, the agent no longer works for the company. He hasn’t been there for some time. But the agent was not only the agent, he was the owner of the property. And that’s where things get a bit dicey.
Even though the lease had the company’s logo on it, the broker maintains the transaction was between you and the agent as an individual, not an employee of his company or even an independent contractor. “The only involvement the broker had was the fact that the tenant was referred by a fellow agent,” I was told. Consequently, the broker does not feel responsible for the actions taken by his former agent.
My contact said his franchise sees many instances in which bogus landlords use its name to lure unsuspecting tenants into thinking they are dealing with a legitimate outfit. The company has placed warnings about this on its website, and even approached Craigslist about the problem. He also reported that some agents who leave the franchise continue to use its name, logo and materials for legitimacy and credibility.
But neither of those scenarios seem to be the case here. The agent was working for the broker when you signed the lease. And since the lease was an official company document as evidenced by the name and logo, it seems to me — as a layman and not a legal authority — that you had every right to believe that you were dealing with the agent as a legitimate representative of that company.
However, since the broker doesn’t feel responsible and believes this is purely a landlord-tenant matter, you are not going to get any help from him in recouping your deposit. Consequently, your only recourse is small-claims court. But I wouldn’t sue just the agent, I’d go after the broker, too.
Remember, though, that there are always two sides to every story. According to the broker, his former agent told him you did not pay your last month’s rent and the property was left in bad condition.
So hopefully, you have documentation to support your case. That would be anything that shows direct involvement with the franchise or the broker, including the listing and lease with the company logo; copies of the initial and final walk-throughs and any supporting photos; and invoices that prove you purchased enough paint to cover an entire house or that you paid someone to do that work as well as make whatever repairs that were called for under the final walk-through.
Nationally syndicated columnist Lew Sichelman has been covering the housing market for more than 40 years. MarketWatch readers are encouraged to send their real estate questions to him at firstname.lastname@example.org . Answers will be presented in this column every Friday. However, because of the volume of e-mail he receives, he cannot answer every reader’s query.