Oak Park, IL · Member since 2014 · 285 posts · 114 votes
My selected tenant backed out. Does anybody charge a holding money from a selected tenant to keep if they back out? Something like earnest money when your bid is accepted?'.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
Don't ever "hold" a rental for a prospective tenant without some type of non-refundable deposit. And if they don't show up to sign the lease, then keep their money. And don't take it in the form of a check either. Cash or money order only.
Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
12y
If somebody wants me to hold a property for them without signing the lease and paying the deposit I charge 1/30th of the monthly rent per day of desired waiting time.
My selected tenant backed out. Does anybody charge a holding money from a selected tenant to keep if they back out? Something like earnest money when your bid is accepted?'.
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
12y
Yup I take a non-refundable hold deposit that turns into their security deposit upon them signing the lease. If they don't sign then I keep their holding fee.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
12y
The unit is ready to rent.... we offer to rent to a specific prospective tenant.... they accept our offer.... we agree on a move-in date. If the move-in date is within one week, we do not require a holding deposit. If the move-in date is a week or more out, we require a $200 holding deposit for each week or portion of a week that we are holding the unit. If the tenant moves in, we apply the holding deposit towards their security deposit. If the tenant decides not to move-in, we keep the holding deposit. We will not hold a unit for more than a reasonable length of time depending on the time of year and the market.
In Washington State: DEPOSITS are refundable if certain conditions are met. FEES are charges that are not refundable. How we label such does make a difference.
Realtor · Schaumburg, IL · Member since 2011 · 289 posts · 118 votes
12y
When you get an app and run credit you need to move quick. Accept fast and encourage them to sign a lease within 24 hours AND submitting the security deposit. There is absolutely no incentive to get a signed lease without the deposit because of your obvious problem at hand. Only hold the unit on a case by case situation but I always push for immediate occupancy. Tell them you have multiple apps to consider and your just trying to help them secure your unit Before everyone else, they'll feel good about being first. ;) for example, if it's June 4th and the unit is avail for. June 10th occ, I rarely consider a July 1st move in, UNLESS they're signing a two year lease and there's a lot of strength in the applicant. Otherwise, they're a just no incentive to hold a unit for a prospective tenant. Close hard, close fast amigo. Good luck
Real Estate Broker · Buffalo, NY · Member since 2013 · 102 posts · 36 votes
12y
When a prospective tenant wants to apply for one of my apartments, I require the fully completed rental application, proof of income, and a $200 deposit (cash, money order, or certified bank funds) up front.
I explain up front that if they are approved, the entire $200 is applied to their security deposit. If they aren't approved, I refund all but $40 per applicant. If they aren't approved and they lied on the application, they lose the entire $200. And if they are approved but don't take the apartment, they lose the entire $200. They sign an agreement to that effect on both their application AND their receipt. Covers me twice over.
Saint Louis, MO · Member since 2014 · 2 posts · 0 votes
12y
Before lease signing I don't collect anything but typically wait only a day or two between approval and lease signing. So if they back out, I just move on to the next one. When collecting security/holding deposit I do have lease language that states if they back out between lease signing and move-in, they pay pro-rated rent for the lost rent they've caused me.
Real Estate Investor · conyers, GA · Member since 2011 · 9 posts · 5 votes
12y
Holding fee is optional, I just stress that we will keep showing the house until the lease is signed. If you want the property held after you're approved, I need a holding fee. Only fair to me and other qualified applicants I may have missed out on because you flaked on me.
Investor · SE, MI · Member since 2013 · 1k+ posts · 461 votes
12y
I accept a holding deposit (usually half a month's rent) along with application fees when they apply. The app fee is non refundable, but the holding deposit I would return if I don't wish to rent to them. If they flake, it's non returnable-- helps offset the cost of finding a new tenant. When they move in, the holding deposit is converted to a portion of their security deposit.
Depending on the timing, I get the lease signed ahead of time, remaining security deposit and first month's rent are due prior to them getting the keys. If there isn't a lot of time before they move in (a month or less) then I just have them sign the lease on move in day.
Real Estate Investor · Nevada, TX · Member since 2014 · 66 posts · 16 votes
12y
Call it a lesson learned. #1 Screen your tenants #2 offer rental to them and if they accept, schedule a time to sign lease and collect deposit/rent/etc... #3 if they do not show up to sign and pay -- move on to the next one. As landlords we and our rentals are also being screened by prospective tenants - good tenants will shop around and choose where they wish to live just as we landlords screen to get what we hope are good tenants. I'm varily new to landlording however doing it is actually a series of ongoing lessons learned. One thing I learned in the beginning do not become desperate/hasty --- my new motto is "I'd rather have it empty than pay someone to live there".
Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
12y
Until you have a signed lease and security deposit, it's not rented. I tell my applicants that and let them know it's in their best interest to sign sooner than later and I tell them the property will still be shown until we have a signed lease and security deposit. If they need to wait to sign, I require our base security deposit as the holding fee which is nonrefundable if they flake out later and don't move in.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
12y
We've seen this topic before on BP.
I see no one from NC posted. I can tell you this. If someone from NC follows the advice from posters above, when the applicant that backed out says "I want him to give me my money back" in front of a judge, the judge will look at the landlord DEFENDANT and say "give him the money back."
If I take a step back... this is what I've seen. The applicant (plaintiff) says (paraphrased): "He kept my deposit and won't give it back." The judge will say "Let me see the lease" to the landlord (defendant). Landlord says "we didn't sign it because she backed out...." Judge: "give him the money back. No lease. No deposit. No possession. Next.(*)"
If you collect money that "becomes the security deposit" and you do not have an executed lease, you are on thin ice in my state. Instead we collect a "binder". This is financial consideration for us taking the property off the market. At lease signing, the binder is treated as pre-paid RENT and has nothing to do with a deposit. There is no lease to hold a property, just a binder agreement. We keep the consideration if the tenant flakes out.
Check your state landlord/tenant laws. If you can't figure it out, talk to your lawyer (who may draft a binder-like agreement;) or visit small claims court to see how judges apply your state law.
NOT LEGAL ADVICE
Applicable NCGS:
(*) I cut some parts out, like these judge comments (paraphrased): "The deposit is used with a lease. Why don't you have a lease?"... "Yes, the deposit can be used for non-payment of rent. But you don't have a lease. Did you give the plaintiff possession? No? "... "Did you deposit the money in a trust account? No? That's required by law, you know. "
I don't hold properties. First come first serve from when they are approved, lease signed, and certified fund deposit. From that point teh break lease comes into affect. Until all that is done i continue to show the house. You would be suprised how quickly someone will get everything done if they love the house