Tenant not paying security deposit

[Oles B.]

Hi everyone, I've come here to seek advice on whether my brother and I have taken the right steps in a sticky situation based on a mistake we made.

My brother and I co-own a duplex in Rancho Cordova, CA in which we currently reside in one of the units. The other unit is empty after we vacated the previous tenants and remodeled it - we have been looking for a tenant to place in it for about two months. This Monday, we finally had a qualified tenant apply that checked all the boxes - excellent credit score, clean background, high income-to-rent ratio, and her employer and rental manager had nothing but kind things to say about her. She is moving from Las Vegas, so we never met her, but we spoke with her on the phone and she was pleasant and had a fully remote job with two children.

Needless to say, since we are new landlords and have been looking for a tenant for so long, we got a little excited and signed the lease that starts November 1st with her on October 28th, before getting a security deposit and first month's rent. I know this was a huge mistake, and I haven't come here to have people say to not do that - I definitely know to not do that now based on this experience; it's been a very good lesson.

The lease agreement says that the security deposit and the first month's rent were due at the time of the lease execution, so we immediately sent her invoices via our rental platform to pay; since she signed the lease via the platform she already had an account. We didn't hear from her for 24 hours, so we sent her a reminder, and she said she would pay the next morning. When we didn't see any payment come in in the morning, we called her again, and she apologized and said she would pay immediately, which she of course did not. She then said that she paid but we didn't see any confirmation. We then followed up with her three more times, to which she didn't respond.

At this point my brother and I decided that she was lying because she likely did not have the money, so we sent her a "Three Day Notice to Perform Covenant or Quit" via our rental platform since she has technically already defaulted on the lease. We absolutely will not be handing her the keys until we see the money has entered my bank account.

Did we do the best thing we could have done in this situation? Did we do anything incorrectly regarding the three day notice? What should we have done differently (besides take the security deposit up front)? I am also curious if anyone has any advice on how to deliver the final notice that the lease will be terminated (just via email, should we have a formally signed lease termination document, etc.)

[Theresa Harris]

Hindsight is great, but until the deposit is in hand, the lease isn't valid.  I send the lease to them to sign without my signature and tell them to read it, sign it and return it within 48 hours along with the deposit (which is non-refundable until they move in at which point it becomes a regular security deposit refundable when they move out minus damages).  Once I get the deposit and lease with their signature, I sign the lease and return the completed copy to them.

If she can't provide proof of payment and has gone radio silent, then my guess is she's not telling you the truth.  Get it back on the market and move on to the next person.