***Need Advice*** Security Deposit Charge Back

3 Replies


First time for this situation and I need your advice on what options I have...


  • Tenant payed the security deposit ($1,200) via Cozy and everything went thru money showed up at my bank account. 
  • Once deposit was paid I sent the deposit receipt letter, approval letter, and copy of the lease for review before we sign it in few days. 
  • They called me few days before moving in date and want a refund place is small etc... I kindly told them can't refund the whole thing, but I'm willing refund them $700. 
  • They declined the offer and told me they were just going to dispute the transaction with the bank (Wellsfargo). I did not know that someone could that easily dispute a charge that was already done via bank transfer. Keep in mind I already have the funds in my account. 
  • Few days later Cozy emails me and states I have to pay the fund back and there is nothing they can do. 

So at this point I missed the first 2 weeks of December to find a tenant and finally found someone to move in on December 29th. Original tenant was scheduled to move in December 9th so I lost 3 weeks of rent.  

What options do I have on getting that money back from the tenant? Please help me out. Thank You and God Bless!  

I have zero experience with Cozy, but my understanding is that a bank transfer cannot be reversed after apprx 48 hours, its already finalized. If they paid by credit card, then they can potentially dispute the charge, but you still get the opportunity to plead and validate your case. (I own several retail stores here in Asheville NC, and I have plenty of experience with merchant card transactions and disputes). If the lease was not signed by both parties, then it may come down to the wording of your deposit receipt/agreement. If you have not refunded the money, personally I would not, let them take you to small claims court. If Cozy is a company that protects the tenant that much more than the landlord, then prehaps there is a better suited service provider out there for you. If you have already refunded the money, fighting to attempt to get it back will likely not be worth the effort. All of this is of course, just my opinion. Good luck

Im so sorry this happened to you. Next time, I will suggest you to take money order for deposit. It makes me wonder if they can even dispute the rent payment as well if they want to :(

You should only except  cashiers check or money orders for security deposit and first months rent to avoid this type of issue. After that then you could do the cozy service or except personal checks. If they signed the lease I believe you don't have to give them their money back because they  breach the contract. I would write them a letter explaining why you are only giving them part of their money back and also you need to talk to cozy and explain to them they signed a contract. First check your state to see if you have a right to keep part of the money.  Good luck. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here