Non refundable fee on apartment under construction/building not finished?

[eeglas]

What is the name of your state (only U.S. law)? WA

I’m looking at a month-to-month rental in a community that is currently under construction.

The facility wants a non-refundable “community fee” and the first month’s rent 45 days before move-in/occupancy.

However, the building won’t be complete until 15-30 days before the building is available for move-in.

Can they take non-refundable money on property “unseen”? All we’ve been able to see are floor plans on paper, and a sample of finishings like carpet, etc. on a board in the rental office. They said we would not be able to go inside the building until after we give them the non-refundable fee and the first month’s rent.

We have a refundable deposit on a particular unit in the building, and the reservations are full, so I don’t want to risk losing the apartment. But, I sure feel uncomfortable giving them a lot of money that is non-refundable when we are not able to see the finished product, or even get a preview of it near completion.

Thank you.

 

[Stephen1]

Can they take non-refundable money on property “unseen”?
My initial reaction was "sure they can if you are willing to pay it." As I looked at WA state's Landlord-Tenant Act I wondered what the purpose of that fee is?

Here is what I gleaned from the state law - RCW 59.18.253
- if the fee is to put you on a waiting list to be considered for a rental unit, then that is not allowed.
- if the fee is to hold a unit for you or to secure that you will move in, then that is allowed. They must provide you with a receipt for the fee or deposit, together with a written statement of the conditions, if any, under which the fee or deposit may be retained (by them), immediately upon payment of the fee or deposit. Then, after you actually occupy the unit they must credit the monies toward your first month's rent or security deposit (they may also use a portion to pay for a screening service). If you don't occupy the unit, then the landlord may keep the monies as long as the grounds/conditions under which he keeps them were spelled out in that written statement of conditions they provided you which informed you of when they would refund the monies.

So, what is the stated purpose of the fee?
What does their written information say about under what conditions they may retain the fee? Or think of it from the opposite direction, under what scenarios could you get your monies back?

It sounds to me as if that fee would not be refunded under any conditions. Even if, for some reason, they couldn't provide you with a unit as promised.

 

[adjusterjack]

However, the building won’t be complete until 15-30 days before the building is available for move-in.

As a property claim rep and a long time homeowner I've dealt with many, many contractors and I can almost guarantee that any "estimated" date of completion is not likely to be met and you'll be sitting on your thumbs waiting while they have your money and give you nothing but excuses.

Up to you but, as previously stated, if you agree to it you are likely bound by it.

 

[FlyingRon]

I can tell you I did exactly that. And my unit was not done in time, so I ended up living above the model instead (that obviosuly was the first building completed) and got $100 for my troubles. Yeah, I'd be careful about putting a deposit that isn't refundable if they don't finish on time.

 

[eeglas]

Thank you. I'm not so concerned that they are done on time as I am about giving them nonrefundable money ahead of a certificate of occupancy and not being able to even go inside the building to see if their "visualizations" are indeed what is there. There are no models -- there is nothing other than a 2D floor plan and computerized "should look like this" videos of the common area.

If we could look at the unit, even if it is not 100 percent complete, at least we would see something real and if it is indeed what we want and what they portray on paper.

So I wondered if they can collect a $5000 nonrefundable community fee (used, I guess, to cover building grounds, etc. -- like an HOA fee, but since it is a rental I guess they collect up front), and first month's rent with nothing to see. There is nothing to do a walk through on... and, they have not provided rental contracts yet. They will when they ask for this non-refundable money. Right now, we are just "invested" in this unit with a refundable deposit to attach our name to a particular unit.

By contrast, a new community on another end of town (not convenient to us) with a 2017 occupancy date, states when their certificate of occupancy will be issued (rough timeframe), and that they will have a grand opening 90 days later so people can see their units and pay whatever their terms are. That seems more fair, which is why I wondered about the legality of collecting money upfront, nonrefundable, based on nothing tangible.

I'd be glad to do it if we could go inside the building and see the unit we selected, even if perhaps carpet isn't down, or paint isn't finished, etc. At least we could see the real thing...

 

[eeglas]

A bit more info: we put down a refundable $1000 to be on a reservation list months ago, then another refundable $1500 when we selected the specific unit we want. Both of these amounts go toward the "community fee". Per the deposit receipt for the second amount, it says that the next step toward "securing" the unit is that we give them the remainder of the $5000 "community fee" ($2500) and the first month's rent 45 days prior to move-in, and that these latter are non-refundable at that point. The current timeline is move-in should be end of November, which would mean they collect this money and show us the rental contract mid-Oct.

That would be fine with us if we could see inside the building and see even the skeletal structure of our unit at that 45 days prior date -- or whenever the nonrefundable money is due (even if that is one week prior to occupancy, I don't like the idea of giving them money that is not refundable for something I cannot see). Then we could see something real instead of a diagram on paper.

But they want the money sight unseen. When they do show us the rental contract and ask for this non-refundable deposit, I will look very carefully at the contract and ask them about such things as what if the rooms are not as shown on the floor plan, or there are any other representations that are not real, etc.

Obviously, one would say 1. "then just wait to see what the contract says" -- agreed, but I want to know if there is any legal pushback so I can be prepared to challenge them at that point, and 2. "why go with this place if you don't agree with their practices?" True, but it is the only new construction in a perfect location for a while, so we would like to make this work.