Can I reject an applicants request to withdraw their withdrawal?

Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes

Lol no this is not a riddle. I actually had an applicant that was going through the screening process with the HOA of my community request to withdraw the lease agreement. The applicant did not want to wait any longer for an approval for the HOA and decided they wanted to move on. After informing the applicant several times that they will lose their deposit they kept trying to tell me that I owed them their deposit. The very next day they sent me a request to withdraw their withdrawal. I really do not want this person in my home right now. Am I allowed to reject this last request, legally? I already listed my home for rent again and am receiving inquiries for rent now. I have all withdrawal request in writing.

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Diane G.

CA · Member since 2016 · 1k+ posts · 1k+ votes

It is very unfair to try to keep their deposit.... I think it is morally wrong to try to keep the deposit.... Be fair and decent

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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
And most importantly, if i deny this request can I still keep the deposit?
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Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y
That really wouldn't be fair to the applicant. They're stuck between not having been accepted by the HOA and having to find a place to live. So, without that HOA approval, I think you're required to give him back his deposit. The HOA is on your side, so, it's you that's not allowing him to move in.
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Kim Meredith HamptonBusiness Member
Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
9y
@Account Closed what does your rental application state? My application basically states that if they are approved and fail to move in, I will keep their holding deposit. If they are not yet approved, they can get their holding deposit back. Since they technically were not approved yet, I would give them back their deposit and move on..... you don't want this wishy washy person in your property, I am sure they were frustrated and went to look for another property because they weren't getting approved by the HOA, became nervous, but then whatever they found did not work out too!
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Kimberly H.
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
9y
@Account Closed unless they lied about something on their application and you just found out, like they lied about not having an eviction, or pet, or lied about their income, you prob have to give the security deposit back if you are telling them that they cannot live there. The HOA factor makes it interesting, if they are taking an unreasonable amount of time to approve the app, she may have a case for getting her deposit back. How many business days have they been working on it?
** I am not a lawyer this is not legal advise**
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
@Michaela G. On the application for the HOA, its says to allow up to 30 days for an approval from the HOA. It was not 30 days when she requested her withdrawal. So basically she is breaching the lease agreement.
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
@Kim Meredith Hampton I agree with you, I don't want this wishy washy person in my property. My lease agreement says the same thing. However she was still within the boards time frame of 30 days and has not received an approval. Because of that I referred to the contingency part of my lease that says, If approval is not received prior to commencement of lease term, then either party can terminate the lease and deposits would be returned to tenant. Since she is still within the 30 day time frame of the HOA approval and the lease term does not commence until March 1, wouldn't she be breaking the lease agreement? The lease agreement doesn't say anything about waiting 30 days for approval, that's just the HOA's request.
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
@Kimberly H. It's been just under 30 days. The HOA did say to allow up to 30 days for the approval.
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
I reached out to a friend of mine who is a lawyer. I had him review all of the documents and he told me that since the tenant decided to breach the contract prior to approval of the HOA before the lease term I do have the right to hold the deposit. He even took it a step further and said I even have the right to ask for the early termination fee which is 2 months rent according to our lease agreement. He explained to me that once someone writes a withdrawal of an offer, the contract is then terminated and no longer exist. So if the person then comes back and says they changed their mind, I can say the offer was already withdrawn and that's it. I had a change of heart and now I've decided not to be nasty and just give the money back and move on to another renter.
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Diane G.
CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
It is very unfair to try to keep their deposit.... I think it is morally wrong to try to keep the deposit.... Be fair and decent
23 Reply
Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y
That's the kind of action that gives all landlords a bad name. If that person goes to the media you would never be able to do business in your area again.
9 Reply
Michelle B.
Investor · Lebanon, OH · Member since 2016 · 144 posts · 87 votes
9y
Andrew Edwards This is an interesting topic and an interesting response from your atty. Is the deposit in question a security deposit or a holding deposit? I think that makes a huge difference. Michelle
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
Michelle Briotta it is the holding deposit that I am talking about.
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
Michaela G. So even though the lease agreement states the I have the right to hold her deposit when she breaks the lease I should give it back? The deposit is just a deposit to hold. Not a security deposit. I already decided to give the money back but just for sake of argument, if a tenant enters a lease agreement with you, then changes their mind about the whole thing prior to the lease you would just say ok and give them their deposit to hold money back? What about your time wasted and time that your property is sitting vacant?
3 Reply
Kim Meredith HamptonBusiness Member
Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
9y
@Account Closed for those of you on the thread, I say holding deposit during the approval process and security deposit once they are approved. A holding deposit because if they fail to move in after they are approved and have signed the lease, I can keep the holding deposit for because I have Helen the property off the market for xxx amount of time.
In Andrews case, you throw in the approval process of the HOA and it creates a whole other level of messiness! I know it sucks to give back the money, but honestly it all comes down to the mediator or judge who gets to keep the money
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
Diane G. Just to be clear It's the holding deposit that I am talking about not security. Security I have no right to hold on to nor did I even collect it yet.
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
@Account Closed,
If that's the way you run your business then go ahead. Personally there is no way that I would string someone along, fail to deliver a product, have them say forget it, tell them they are paying anyway, Have them say fine, I'll still do it, then tell them "to bad" I no longer want you and you are still paying.
However it is your and your wife's company to grow the reputation you deserve.
5 Reply
Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y
Originally posted by @Account Closed:

Michaela G. So even though the lease agreement states the I have the right to hold her deposit when she breaks the lease I should give it back? The deposit is just a deposit to hold. Not a security deposit. I already decided to give the money back but just for sake of argument, if a tenant enters a lease agreement with you, then changes their mind about the whole thing prior to the lease you would just say ok and give them their deposit to hold money back? What about your time wasted and time that your property is sitting vacant?
But that's not what your situation is. The tenant didn't get approval. The HOA approval is on your side of the agreement and the approval wasn't given from your end. Subsequently, you are really screwing this person over in my opinion.
6 Reply
Deanna McCormick
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
I think your within your rights to retain the holding deposit as long as the holding deposit agreement had the clause of HOA 30 day term for approval.
I'd keep the holding fee send them notification that you received their letter asking to be cancelled / released from the lease application and have re advertised the property, with the terms clearly circled on a copy of that holding deposit agreement form.
This is common practice, if someone signs a holding deposit agreement and cancels in writing that they no longer want the apartment before the lease is signed then the property manager has the right to retain the holding deposit fee if it is clearly written in the holding deposit agreement form.
You basically have taken the unit off the market for other interested parties, and have lost the opportunity to get another tenant to rent during the time the application was being processed, you the property owner did not cancel.. they did... if you the property owner had cancelled you would be required to refund the holding deposit.
4 Reply
Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
9y
Before you get your name and reputation tinted, I suggest you refund the money to save yourself some reputation. You need to look for someone else.
All the best,
5 Reply
Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y
Since the HOA can decline the tenant, the condo was not really 'held', because any lease agreement would have been subject to the HOA approval. What if the HOA had declined the tenant, would you then still have kept the deposit?
Is this a Miami thing? I rented some condos there when I lived there, but that was years ago. I would as a tenant never consider applying for a place where there's a 30 day approval time by an HOA.
And if a landlord owns a condo in such a place that has such a long approval process, then I think it's the landlord's risk to having to hold the condo for HOA approval, not the tenant. It was their choice to buy such a deal.
2 Reply
Douglass Benson
Investor · Mason, MI · Member since 2014 · 151 posts · 152 votes
9y
It is a holding deposit for gosh sakes. Give it back and get the universe on your side on this thing. Your core business is not based on revenue generated from "Hold Deposits". Give it back and move on.
12 Reply
Michelle B.
Investor · Lebanon, OH · Member since 2016 · 144 posts · 87 votes
9y
Andrew Edwards I think where your argument of a holding fee breaks down is due to the fact that it was collected before approvals. The only time I collect a hold fee is AFTER I approve them to move it. If I go into the process knowing there will be a lag between approval and move in then I collect a holding fee that transfers to their security deposit but is non refundable during the holding period. I would never collect a holding fee from someone who is still awaiting your approval. That's where this whole thing breaks down. Michaela G. has it absolutely right. Good luck! Michelle
4 Reply
Kimberly H.
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
9y
@Account Closed wow that seems like a *really* long time. I would have that waiting period in whatever holding deposit agreement the applicant signs then, saying if they can't wait that long that you keep their holding deposit. Although I don't think I would personally sign that, ....30 days seems excessive, never heard of such a thing in my area. **I am not a lawyer not legal advise**
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
@Michaela G. I understand what you are saying. if the condo had declined the tenant I definitely would not keep the deposit as it states in the lease agreement. What i'm trying to ask is if prior to signing a lease agreement, the applicant was made aware that the hoa approval process takes up to 30 days, (it's in writing on their application form for the HOA.) then on day 26 or day 27, the applicant says the HOA is taking too long I want to withdraw my offer. Everyone is saying return the money, which I said I would, but just for learning and understanding, why is she entitled to receiving her deposit back?
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OP
Coconut Creek, FL · Member since 2016 · 57 posts · 22 votes
9y
@Michelle B. I collected a holding deposit after screening the applicant myself. Once I approved them we moved on to the HOA screening process and the applicant was informed that the process will take up to 30 days by the HOA. They agreed, paid their application fee to the hoa and gave me the holding deposit contingent on the HOA approval. Right now we are at day 30 and a few days ago the applicant said they wanted to withdraw their application. This is why I am asking about the holding fee.
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