Question about taking down payment for applicant

10 Replies

This is my first time filling an apartment and I am currently going through the screening process.  My question is about down payments.  Do you take them?  At what point do you take them?  If I've already had one application submitted to me with no down payment, and then someone comes along offering a down payment, can I move the second guy to the front of the line?  Should I reject all down payments and process the applications in the order they were received?  Should I only accept a down payment after an application has been approved?  As you can tell, I'm very unclear about how to handle this.  Thanks in advance for your responses!

-Joe

@Account Closed

You should not be taking deposits until you have selected the tenant who will live in the unit. You should be taking application fee's, usually $30 per person over 18 who will live in the unit.  

Most tenants bring their first months rent and security deposit at the time of lease signing. 

Hope that helps.

I won't accept any money until I've approved the applicant and offer them the house. I don't want to waste my or their time (or be liable for) getting them their money back if I don't approve them. All holding fees are non-refundable unless I'm unable to lease them the house. All security deposits are turned over when they sign the lease

Some bigger complexes and PMs won't accept an application from an applicant without the payment if a deposit. That is so the applicant does not just keep shopping around I guess. 

I do as @Curt Davis  said: payment of application fee with application, payment of deposit upon approval of application. 

Thanks for the responses.  This really helps clarify things!

Account Closed 

The irony, my parents and I were just having this conversation. This is my policy.

First Come First Serve No Hold, Completed/Approve Application, Lease and Security Deposit Reserve the unit

That being said I  DO NOT take the money without a signed lease. In my lease I have a buy out clause that start the "moment" the lease is signed. The point of this buy out clause is that people can't just "break" the lease. For me this is very important because if you move out it allows me to keep the deposit and pursue you for the rest of the amount owed per buy out clause. If I accepted the money without this clause and they changed their mind, it would be very difficult to enforce anything.

I had a tenant put down a security deposit and sign the house 5 weeks early. 2 days before move in (after turning away tons of people) they take a job at the coast. Without this clause I wouldn't have been able to keep the security deposit for damages.

I also do the first come first serve so I in your situation I take the first best qualified tenant. I waited on a tenant for 2 week only for him to try to renogiotate and walk away. That cost me $1600.

I know how stressful it can be, we had a tenant break the a 18 month lease 6 months into it. At the same time there is a reason it is important to follow your procedure.

Originally posted by @Elizabeth C.:

I also do the first come first serve so I in your situation I take the first best qualified tenant.

Elizabeth,  As far as first come first serve goes, What if I get an application with a lease term that begins September 1st, but I think I can have it filled by August, 15 or earlier if I wait for other applicants.  Would you hold on to that application and wait a couple weeks to process it, or would you tell them that their application was rejected and then keep your fingers crossed that you could find someone sooner?  Or would you state that the lease term has to begin on August 15 or earlier and if they wanted it, that's what would have to be on their application.

In general, If I have 3 applications that I havent processed, Can I take the one with the earliest lease term even if it isnt the first one I received? 

Account Closed 

I also DO NOT Hold the house. Before I even give them an application I tell them the date. If they do not want the date I move on. I don't necessarily do the "first" person if they don't meet my requirements. Start date is a requirement.

Elizabeth Colegrove 

Thanks for clarifying this for me!

Many new landlords will put a weasel clause in their lease without checking the state laws and when they get to court their weasel clause will not stand up.


Joe Gore

Originally posted by @Joe Maciag:

...

In general, If I have 3 applications that I havent processed, Can I take the one with the earliest lease term even if it isnt the first one I received? 

I suggest you establish a scoring system so that move in dates within a certain window score more points and thus will get a better qualifying score. 

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