Accepting Deposits to Hold Rental

Hi All,

I have a tenant that wants to move in on September 1st and she is meeting me this evening to give me the deposit of $1400 (which equals a month of rent) to hold the place for her until September 1st. Note: This is the rental deposit that will be given back at the end of the lease period if she does not renew.

Question: Once I receive her deposit then I will take the property off of the market. What should I do to protect myself in the event she changes her mind about moving into the place in September? Should I draw up a short agreement stating that if she changes her mind I will keep $810 (monthly rent is $1400/mo.) which is the prorated rent amount for 18 days that the property was not on the market???



1 mistake:

  1. Holding a unit empty without getting the deposit and rent.

You cannot charge a rent/deposit forfeiture fee in most states. So, you’re assuming 100% of the risk of the tenant continuing to shop for another place to live, and subsequently reneging on the commitment to rent from you.

Unless your market is so awful that you have to go to extremes to get your property rented, you should not offer this kind of flexibility to a prospective tenant. You want at least the first month’s rent, plus the full deposit, regardless of what date the lease begins.

Meantime, your lease should begin ‘immediately,’ with the first month’s rent being paid upfront. Then if the tenant actually moves in, you credit the August rent back to the tenant in September.

If the tenant doesn’t move in, you keep the August rent, and give back the prorated balance that would have run into September.

BTW, this is a good practice whenever renting to a prospect in the middle of the month, and that is to collect the full, first month’s rent, and then prorate the second month.

You don’t want someone moving in, who actually cannot afford to give you the full rent and deposit. This policy sifts those people out.

Great advice Javipa!

I will hold the first months rent but they cannot move in until I receive the security deposit.

If they can’t/don’t come up with the security deposit, I keep the first month rent.
I’ve never had that happen.

I think you’ll end up in court, and lose, doing that. Just saying.

Javipa is in California with dracornian laws. In Texas it is important what you call things. If you call it first month’s rent you have to give it back because they can’t be made to pay rent for a property that they haven’t taken possession of. That is why you call it deposit. And have them sign the lease when you take the deposit. The lease says that it can be used to defray costs to re-lease the property if they break the lease. If you get it rented before September then give it back if it takes half the month give them back half the deposit. That is why deposit never matches the rent. There is no way to confuse rent and deposit. If the rent is $1250 the deposit is $1300.