Tenant Guide to Rental Property Holding Deposit

by Property Management Software on March 28, 2010

Tenant Guide to Rental Property Holding Deposit

Tenant Guide to Rental Property Holding Deposit

Sometimes, the tenant and the landlord, property manager or property management company will agree that the tenant will rent the unit, but the tenant cannot move in immediately.  In this situation, the landlord may ask the tenant for a holding deposit. A holding deposit is a deposit to hold the rental unit for a stated period of time until the tenant pays the first month’s rent and any security deposit. During this period, the landlord agrees not to rent the unit to anyone else. If the tenant changes his or her mind about moving in, the landlord may keep at least some of the holding deposit.

Ask the following questions before you pay a holding deposit:

• Will the deposit be applied to the first month’s rent? If so, ask the landlord for a deposit receipt stating this. Applying the deposit to the first month’s rent is a common practice.

• Is any part of the holding deposit refundable if you change your mind about renting? As a general rule, if you change your mind, the landlord can keep some and perhaps all of your holding deposit. The amount that the landlord can keep depends on the costs that the landlord has incurred because you changed your mind for example, additional advertising costs and lost rent.

You may also lose your deposit even if the reason you can’t rent is not your fault for example, if you lose your job and cannot afford the rental unit.

If you and the landlord agree that all or part of the deposit will be refunded to you in the event that you change your mind or can’t move in, make sure that the written receipt clearly states your agreement.

A holding deposit merely guarantees that the landlord will not rent the unit to another person for a stated period of time. The holding deposit doesn’t give the tenant the right to move into the rental unit.  The tenant must first pay the first month’s rent and all other required deposits within the holding period. Otherwise, the landlord can rent the unit to another person and keep all or part of the holding deposit.

Suppose that the landlord rents to somebody else during the period for which you’ve paid a holding deposit, and you are still willing and able to move in. the landlord should, at a minimum, return the entire holding deposit to you. You may also want to talk with an attorney, legal aid organization, tenant-landlord program, or housing clinic about whether the landlord may be responsible for other costs that you may incur because of the loss of the rental unit.

If you give the landlord a holding deposit when you submit the rental application, but the landlord does not accept you as a tenant, the landlord must return your entire holding deposit to you.

{ 1 comment… read it below or add one }

George September 22, 2011 at 8:56 am

My wife and I were recently looking for an apartment to rent this past Sunday. We found what we thought would be a nice place to live although there were some issues since we had a large dog. The dog is a mix/mut and depending on what paperwork we look at for her they say she is a German Shepherd mix or Belgian Malinois mix. Unfortunately German Shepherds shows up on a lot of breed restriction lists, so the leasing rep said to leave a holding deposit on the place and she would check with the owner, but told us to be sure that our paperwork said Malinois mix and not Shepherd but she did say if the manager wasn’t ok with the dog that she would refund our holding deposit. Well we can’t exactly control what she is, she is what she is and we have conflicting paperwork and those are the facts of it. The leasing rep had told us she would call us back on Monday (the following day), however we never received a call (although the manager claims he “saw” her call us, which neither my wife or my phone have record of and we honestly never spoke with them on that Monday) So Tuesday morning rolls around I call the apartment office a couple times that morning and get no one. At 11:20am I receive a voice mail on my cell phone from someone in their office indicating that the unit we had filled out the application for was no longer available, and that they wanted to discuss other options with us. I did not return that call and decided to head down to the apartment complex on my lunch since it was so close to where I work. My wife and I arrive in the apartment offices, and it takes a minute or two before we are greeted which is no big deal. A gentleman comes out of an office, we explain to him that we were there this past weekend and that we had been waiting to hear about our dog. He says, “Oh the Shepherd/Malinois people” and we of course agree. He indicates to us that if we can get the vet to indicate that our dog is indeed a Malinois and not a Shepherd that there won’t be an issue but that if we can not then he can’t accept her. We decide at this point to ask for our holding deposit back and indicate to him that the Leasing rep we spoke to over the weekend indicated to us that she would refund us the money if the manager couldn’t accept our dog. He tells me he has to verify this with the rep before he can process the refund as this is not normal procedure. At this point I am quite weary of this complex and the management company given what I have read on various apartment rating sites, and just his general demeanor. I demand to get my “holding deposit” back and that I am not leaving until I do. He threatens with calling the police, etc. At this point I realize my getting upset is not going to make anything better so I decide to go the more tactful approach with this guy and I smooth things out with him. Now keep in mind they no longer have the apartment available for us that we put the “holding deposit” down on. I walk out of there with everything up in the air, they are going to look for units that may become available within my time frame and budget. Now it is Thursday, and after a lot of thought and sleeplessness last night I decided I wanted to pursue getting my “holding deposit” back once again. I call this morning and left a message. It has been nearly an hour and a half with no call back. I want to give them a fair chance to make it right and refund my hold since the unit wasn’t held regardless of the breed of my dog, but I am getting pretty sick and tired of it and am about to call my bank and report it as fraud. Am I crazy, in the wrong, or are they wrong? Some support would be great on this. Your thoughts opinions would be appreciated.

Reply

Leave a Comment

Previous post:

Next post: