Elkhart, IN · Member since 2017 · 15 posts · 0 votes
I'm a landlord of 2 weeks. I bought a duplex - 1 side came with a tenant. Filling the other. I have a guy that looks great on paper, but doesn't want to move in for 30 days because he needs to give his current landlord 30 days notice, which, I completely respect him for doing. Here's what I was thinking...Can I ask him for a deposit to hold now that will then be used as his security deposit? Can I also say It's not refundable if you decide not to take it, but will be if you do move in and then will be used as a security deposit? Is this legal and a good idea? I just want to protect myself from holding a place empty for 30 days and then he change his mind.
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
6y
What you are describing is exactly what I do. I have a one-page document that the tenant(s) signs that $XXXX is a holding deposit and is non-refundable. The document also includes that the holding deposit is converted into the security deposit at move-in. I also have some kind of language about that the house rental is not a guarantee, until the background check is completed. And the holding deposit will be returned only in the event that I reject their application. Something like that. I also include a timeframe (3 business days) that the lease needs to be signed and returned to me, once it is given to them or they can face a forfeiture of their holding deposit. I would potentially be negotiable on that if there was a good reason they'd need a little longer. But that's never come up. I mainly just want to make sure the new tenants finish the process, ie sign the lease, so neither of us are still in limbo.
Once the background check is completed and passes, then I prepare and send the tenant the lease and/or meet with them to sign it.
In a nutshell, I don't remove my listings until I have BOTH the full holding deposit and the executed lease.
Check with your local laws, in CA where I am . We would require the tenant to sign a holding deposit agreement. This doesn't mean you get to keep his deposit however you can deduct money from the deposit for time the property was held.
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
6y
What you are describing is exactly what I do. I have a one-page document that the tenant(s) signs that $XXXX is a holding deposit and is non-refundable. The document also includes that the holding deposit is converted into the security deposit at move-in. I also have some kind of language about that the house rental is not a guarantee, until the background check is completed. And the holding deposit will be returned only in the event that I reject their application. Something like that. I also include a timeframe (3 business days) that the lease needs to be signed and returned to me, once it is given to them or they can face a forfeiture of their holding deposit. I would potentially be negotiable on that if there was a good reason they'd need a little longer. But that's never come up. I mainly just want to make sure the new tenants finish the process, ie sign the lease, so neither of us are still in limbo.
Once the background check is completed and passes, then I prepare and send the tenant the lease and/or meet with them to sign it.
In a nutshell, I don't remove my listings until I have BOTH the full holding deposit and the executed lease.
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
6y
I require the security deposit before I stop showing a property. First qualified person that give a deposit gets the place. Additionally, a security deposit holds the place for 30 days max. I don't want someone putting a security deposit and then waiting 4 months to move in. Just be very clear upfront about those items.
Real Estate Agent · Plano, TX · Member since 2018 · 75 posts · 47 votes
6y
Most leases would already have that included in them. I would try to get him to take possession earlier for a discount so at least you have utilities and etc out of your name and some money coming in earlier even if he doesn't fully move in earlier.
Rental Property Investor · Cleveland, MN · Member since 2017 · 518 posts · 354 votes
6y
I used to require 1/2 of the deposit as a non-refundable holding deposit. After a couple of times having people still walk away, I now require that plus a signed lease. The lease has the date signed and the date of move-in. That way if they back out they're backing out on a lease as well, which they don't do. I live in MN and we don't have time to screw around or our busy season is over.