The PA Superior Court recently found in favor of tenants in an action brought against the landlord to recover of their security deposit. In E.S. Management v. Xue, four international students attending Carnegie Mellon University paid 3-months rent ($5,785) to a landlord prior to signing a lease. The students were told that this was necessary to hold the apartment until they signed the printed lease, which was 15 single-spaced pages.
Over the next few days, the landlord pressured the students to sign the lease, threatening to re-rent the apartment and keep the $5,785 if a lease was not signed. Two days later, the students told the landlord they no longer wanted to rent the apartment. The landlord refused to return the $5,785 deposit, and the students sued, alleging violations of the Pennsylvania Landlord Tenant Act and Consumer Protection Law.
The Pennsylvania Landlord Tenant Act prohibits a security deposit which exceeds 2-months of rent. The landlord argued that the large deposit was necessary to verify the creditworthiness of the international tenants and that the deposit also included part of the last month’s rent. The Court did not agree and held that the landlord unlawfully collected a deposit in excess of the 2-month limit.
The Court also held that the landlord violated the Consumer Protection Law by requiring that the international students sign the complicated lease with only 2 days to review it, and because the landlord demanded a higher security deposit than the written boilerplate lease required. The Court agreed that the tenants were entitled to triple damages since the landlord was egregiously attempting to extract money from the students.
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