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Can the landlord keep any holding deposit if he decides not to rent to the tenant?

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jay07

Junior Member
What is the name of your state (only U.S. law)? CA

I put down a holding deposit for $600. there was only a receipt stating he received the money & never gave an agreement for the use of the holding deposit or if it would be refundable. A couple of days later we decided we don't want the house anymore & he agrees to mail back all of my deposit. 2-3 days later he says that i wont be getting any money back. Later, he says i can either end it & only get $300 back or go forward with the lease & we both (landlord & tenant) agreed to continue on with the lease & sign it the next day. I try to get a hold of him for the next two days & he doesn't answer until the 3rd day and says he does not want us to sign the contract and will only return a portion of the holding deposit. Is there any way i can get all of my money back?
 


sandyclaus

Senior Member
What is the name of your state (only U.S. law)? CA

I put down a holding deposit for $600. there was only a receipt stating he received the money & never gave an agreement for the use of the holding deposit or if it would be refundable. A couple of days later we decided we don't want the house anymore & he agrees to mail back all of my deposit. 2-3 days later he says that i wont be getting any money back. Later, he says i can either end it & only get $300 back or go forward with the lease & we both (landlord & tenant) agreed to continue on with the lease & sign it the next day. I try to get a hold of him for the next two days & he doesn't answer until the 3rd day and says he does not want us to sign the contract and will only return a portion of the holding deposit. Is there any way i can get all of my money back?
Probably not.

The point of a holding deposit is to take the property off the rental market so that no one else will rent it. That happened, and you changed your mind about renting. Who knows how long it took to find you as a tenant or how long it will take to find a new tenant? Plus, now they have to take out new advertising to start the whole process all over again. All of these costs can be considered damages for which YOU can be held fully liable.

So, while a holding deposit can't really be considered non-refundable per se, you ended up spending it all anyway by racking up costs for the property owner that you are responsible for. Quite frankly, you are lucky they are offering you back ANY of the holding deposit. Depending on the above damages, and how much rent they stand to lose for the delay, you're lucky that it isn't costing you more.
 

jay07

Junior Member
Probably not.

The point of a holding deposit is to take the property off the rental market so that no one else will rent it. That happened, and you changed your mind about renting. Who knows how long it took to find you as a tenant or how long it will take to find a new tenant? Plus, now they have to take out new advertising to start the whole process all over again. All of these costs can be considered damages for which YOU can be held fully liable.

So, while a holding deposit can't really be considered non-refundable per se, you ended up spending it all anyway by racking up costs for the property owner that you are responsible for. Quite frankly, you are lucky they are offering you back ANY of the holding deposit. Depending on the above damages, and how much rent they stand to lose for the delay, you're lucky that it isn't costing you more.
same day he put up the ad on craigslist (May 10), i put down the holding deposit. It's a college town so finding a new tenant would not be hard and he already had 2nd applicant. Also the lease would not start until September) He was the one who decided not to rent to us after we agreed to sign the lease.
 

FarmerJ

Senior Member
Take your chances with small claims court and next time around be 100% sure you want a unit before giving up any money. In the time being argue in court you had initially wanted to back out then when you said you would carry thru and had a lease signing day and time set up he declined to rent to you so you should be owed full refund. Both of you were wishy washy , you to start with when you changed your mind and told the LL so and LL by refusing to carry out so send to the LL a short letter via certified mail reminding him of what happened including the date and time the lease was to be signed anyway and suggest to him youll take your chances with small claims court to see if they agree when you sue him if he doesnt give you full refund. ( give him 3 days to refund you or you will file)
 

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