Deposit

[csmartin]

We ran ads to rent our house. We had several individuals interested. We told all that it would require a deposit before we took it off the market. One particular couple (not married) gave us a deposit of $1500.00. Several days later they called and had changed their minds because they were in a domestic dispute. Are we required by law to give the deposit to hold the house back, after turning down others? Without a formal lease signed are they liable for any rents? Unfortuneately, we were not able find anyone else so we had to move back in ourselves. Thanks for your advice. Help needed in Kennesaw, Georgia.

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by csmartin:
We ran ads to rent our house. We had several individuals interested. We told all that it would require a deposit before we took it off the market. One particular couple (not married) gave us a deposit of $1500.00. Several days later they called and had changed their minds because they were in a domestic dispute. Are we required by law to give the deposit to hold the house back, after turning down others? Without a formal lease signed are they liable for any rents? Unfortuneately, we were not able find anyone else so we had to move back in ourselves. Thanks for your advice. Help needed in Kennesaw, Georgia. <HR></BLOCKQUOTE>

Yes, you are required to return the money since no written lease agreement was signed and therefore the money is not considered a security deposit. In the future collect the security deposit and have the written lease signed at the same time. That way you can then cancel the rental ad and you will be protected in the event the tenant cancels prematurely.

 

[Tracey]

Contracts creating a lease of not more than 1 year may be made orally in Georgia. [44-7-2] The oral lease may include a requirement that T pay a security deposit, which includes damage deposits, advance rent deposits, & pet deposits. It does not include 'earnest money' which is not to be returned to T under the terms of the rental agreement. [44-7-30] (Advnce money is presumed to be a security deposit unless otherwise agreed.) In order to retain any of the deposit, L must have deposited the money in an escrow account separate from L's other funds.

Thus, if T gave you the money with the agreement that they were going to rent the place for 1 year or less (or you gave T the keys), you had a valid oral lease & may retain the security deposit to cover your damages. However, if you & T agreed that the deposit would be returned if T decided not to take the place, it was earnest money & you have to return it. (If T had the option of not taking the place, no L/T relationship was created in the first place.) Assuming there was a tenancy & you deposited the $$ in a separate account, you have 30 days from the termination of tenancy (when T backed out) to return the money or send T a list of charges made against the deposit & refund of any remaining money. Apply the facts of your case to those rules & take the appropriate action.

If you didn't deposit the $ in a separate account, you can still keep the money, but you'll be liable for willfully & wrongfully keeping the money if T sues & raises this requirement. Proceed at your own risk.

Note, if a lease was formed, you can charge T rent until you re-rent the place OR until you moved back in (renting it to yourself). You can also charge T for your expenses trying to re-rent.

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.