landlording. Renter backing out before moving in

[Dan McDougall]

Ok here's my scenario any help would be appreciated. I have a SFR in denver. I have a tennant set to move in 12/1 and she gave me a 1 month deposit.

After we signed the 1 year lease in mid November she said she was having some medical problems. Then just yesterday she said she lost her job (property management) and said now she can't afford to move in (no savings). I thanked  her for being up front before movinhg in. She wants her full deposit back because denver is a hot rental market and I can likely re-lease it again shortly (which is true). Sounds easy, just keep the deposit and rent it out again correct? However, she said if I dont give the deposit back then she will move in then I can go through the eviction process to kick her out (remember she is a property manager). If I go through the process I will likely lose a couple months of rent ($1,500 per month) and incur legal costs that will likely exceed the 1 month deposit.   I was thinking of asking for a fee ($500?) to break the lease and not let her move in. Why have someone move in who cant afford the rent. Thoughts? 

Thanks so much 

[Jon Holdman]

I'd agree you can probably get a new tenant by 12/1, so I would just give them money back, put your ads back up and take a new tenant rather than fight this battle.

You certainly should not lose two months to an eviction, though.  And it can be done for under $500.  You should know about these guys:  http://www.thslawfirm.com/

When in a situation like this, here's my process.  For one, signing a lease, for me, means we both sign, then tenant hands over cash or money order for the deposit plus one months rent, and I hand over the keys.  They now have possession of the place.  If the place is vacant, I'll often do that a few days before the lease is supposed to start and put a note in the lease saying those days are free.

If I'm willing to hold a place for a tenant to move in later, which I won't do in our market for more than a week or so, then I require a holding deposit equal to the deposit.  The tenant hands of the cash or MO and signs a form that says "NONREFUNDABLE" in big letters multiple times.  If they sign the lease by the agreed-upon date, the holding deposit becomes the security deposit.  If not, I keep it and resume marketing the property.