Holding Deposit/Security deposit

[littlelibrarian]

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

I just signed a HOLDING DEPOSIT AGREEMENT today. An hour after I signed it my husband got a phone call offering him a job with papers arriving within 48 hours to sign the offer. This is a job he was offered a month ago (verbally) but they told him after they couldn't give it to him at that time due to financial restrictions and that they didn't know when they would be able to offer it. He hadn't heard from them in a month and didn't think he would ever hear from them, we needed to move out of our current house and move to a new one--and so we put a holding deposit down--This holding deposit is the same amt as the security deposit--and so we will not have to give a security deposit--as this is the same thing. So I am wondering --is there any chance of getting it back--It was just this afternoon that I signed it and he is going to call first thing in the morning..Is it legal for them to keep the whole security deposit (they are calling it a holding deposit but then it turns into the security deposit after we sign the lease) . Seems like a lot to HOLD the property. By the way --they did not advertise the property in the paper-it has been on their website for a week..and that is all.. We are the first to apply for it. IS there any chance of getting anythng back of the $1600 that I put down as a "holding deposit" I have not signed a lease.

Here is what I signed.

It stated this " By my signature below, I request that you accept this $1600 as a holding deposit for the premises at --------- and remove it from the rental market. I understand that this Holding deposit will be credited against my security deposit when I move in.

I also understand and agree that if I should change my mind or become unable to move in for any reason, this deposit will be forfeited and I will receive no refund.

I have agreed to rent the premises and will take occupancy on or about ------ . The monthly rent will be $1800 and the security deposit will be $1600.

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

 

[Alaska landlord]

I wouldn't return it. The agreement clearly states that the deposit is non refundable. I stopped taking holding fees years ago due to the fact that too many people found what they thought was a bargain down the street and expected my to believe some sob story.

To answer your question, The LL is not required to return the holding fee. If denied, your only hope is to sue him for the holding fee and hope that some stupid Judge will make a decision based on pity or Prejudice against LL's.

 

[ecmst12]

Actually I think I remember reading something about non-refundable holding fees being illegal in California. However, a google search did not support this. Considering the house has only been off the market for a day (if they even took down the ad), they really have lost nothing and have no reason to claim it, other then the agreement you signed. And if that agreement was in fact illegal, then you have a very good chance of getting it back.

 

[Alaska landlord]

ecm12; You are thinking about an extra security deposit. Holding fee is legal.

 

[wesawitbleed]

holding fee is legal. LL can keep all since you signed an agreement allowing it.

http://www.dca.ca.gov/publications/landlordbook/looking.shtml

 

[CA LL]

Ca Specific

CA CASE LAW and actual court actions have determined that a LL can only recover ACTUAL LIQUIDATED DAMAGES equal to 1/30 of the monthly rent per day starting the day the tenants were supposed to begin their tenancy (ONLY) plus incidental if applicable but not always granted.

There are likely only a very small number of judges in the state that would go against the 'norm' with this.

 

[Alaska landlord]

HOLDING DEPOSIT

Sometimes, the tenant and the landlord 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.

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