Deposit to Hold Apartment?
OK, this is a slight twist on a recent post. I showed an apartment to a potential tenant (I own the building… not an agent). He claimed to love it and applied. I approved the application and asked when we could sign a lease. We set the next day to sign. Next day comes and…
OK, this is a slight twist on a recent post. I showed an apartment to a potential tenant (I own the building… not an agent). He claimed to love it and applied. I approved the application and asked when we could sign a lease. We set the next day to sign. Next day comes and he has an excuse. I told him I’d be willing to postpone the lease signing for one day if he paid a $200 deposit through Paypal to hold it until the next day. He did so.
Next day comes and he has several new excuses. It’s clear he no longer wants the apartment. I told him I’m still willing to sign at whatever time works for him. He finally insists I refund the deposit as he has decided he cannot afford the rent and files a complaint with Paypal to force the refund.
My take on this is what is the point of a deposit if the potential tenant can simply change his mind and demand a full refund? Does anyone know the actual law on this? Morally I feel I’m in the right here, but I realize morality and the law are totally separate issues.
For future reference, is there any way to make a “deposit” more binding?
As a landlord, I never take deposits. It’s not worth it for a measly couple hundred for someone to string you along or to claim they have rights to the apartment.
I also will not hold an apartment for anyone, if they are interested in the apartment, they need to be prepared to sign a lease or risk losing it to someone who is ready, willing and able.
I also require that at lease signing the funds be certified just so I know that the apartment is rented.
Even after the lease is signed (before the tenant has commenced occupancy) if I get bad vibes about the tenant, I will offer to return all of the funds and void the lease rather than risk renting ending up with someone who will turn out to be a problem tenant.
Good luck…
Oh, The chickens do come home to roost, last week when it was a question of a broker keeping the deposit after the poster backed out, many of you said: The Broker was scum, should be shot, horse drawn and quartered, burned at the stake.
Now that it’s a valuable LL, oh well – the applicant went from being Bambi to being a “J__off”, flake & “you’re lucky not to have him.” What is it people?
Like I said last week, as a broker, I take deposits so people don’t waste my time, not for my health or to hold on to people’s money.
Eja – its not worth the $200 fight with paypal – take mittens advice TELL THEM IT’S NON REFUNDABLE, take certified funds or cash only – no personal checks, paypal, or credit cards. THE SAME GOES FOR 1ST MONTHS RENT & SEC. I don’t think it always has be a full month, usually $500+ works.
I am a landlord and this is what I do.
1) I explain to them that the deposit is nonrefundable. That the deposit will be used towards their first month’s rent and that the only way they will lose said deposit is if they don’t rent the apartment.
2) I only take cash, cashier’s check or US Postal money order for the deposit.
3) The deposit amount is a full month’s rent.
4) I give them a receipt for the deposit.
The reason I do it this way is to avoid the problems you are having b/c I have had them as well. If someone is serious about the apartment and is a real applicant they will have no problem giving you a month’s deposit. Someone who is really serious about the apartment will make the time to make sure you get the deposit. If they really are ‘busy’ tell them they are running the risk that someone else may rent the apartment. That you find them an acceptable applicant and the apartment is theirs if they want it but to secure it they will need a deposit and that without one you will continue to show the apartment and if some other qualified applicant arrives with money before they do that person will get the apartment. Its really very simple and if you do it this way you rarely have problems.
Good Luck.
Next time, be sure to explicitly state that it is a nonrefundable deposit. As far as the other comments, 2 days is long time in the rental market, this owner could have been showing the unit to other potential tenants during this time, that is the whole purpose of a nonrefundable deposit. You’re paying the owner not to show it to anyone else. I assume it is for April 1st, most prospective tenants that are moving in April 1st have already found a place. This potential tenant could have cost this owner another whole month of no rent.
Folks you’re somewhat missing the point here. I abbreviated the story for the sake of readability and left out the fact that we had an actual appointment for a lease signing for which I traveled 30 minutes and the tenant didn’t show and didn’t have the courtesy to call! There were also interim excuses and stories that changed each time
I clearly don’t want him as a tenant, he’s a psycho, but I feel I should have the right to keep the deposit.
For those who say take cash, 1) the whole point was the tenant was too busy to sign a lease that day.. how would they get cash to me? Also, they can still go to Small Claims after having given me cash. This is why I specifically asked for the legality of the deposit, not the morality of keeping it or giving it back.
What you want is someone who is excited about living there not so who you have to get a 200 dollar binder from. Do whatever you do, broker, Craigs list, etc. and try to get a couple of people and then find the best person. Obviously a 200 binder is not something that made much of a difference here either way. 200 dollars, big deal. To you and to him. Try something else.
“My take on this is what is the point of a deposit if the potential tenant can simply change his mind and demand a full refund? ”
It’s called cash.
You’re legally entitled to keep the money based on your verbal agreement, but you’d have a stronger case if the agreement had been in writing.
As a landlord myself, I’ve had the same thing happen, though I never used Paypal. You’re biggest mistake may have simply been not demanding cash.
Though I’ll second all the other folks who point out you’re lucky not to have rented to this jerk-off. My extensive building management experience has instilled the “once a jerk-off, always a jerk-off” worldview.
You’re talking about a 2-day turnaround between “I’ll take it” and “I’ve given it more thought and won’t/can’t take it.” And this leaves you feeling morally justified to retain $200? Never, personally, changed your mind? or no other takers and desperate for cash? You’re lucky you didn’t get this tenant, and tenant is lucky he won’t get this LL.