Non-refundable deposit - Landlord Forum thread

Non-refundable deposit by Conni on February 22, 2012 @16:37

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I'm in Maryland. I have a tenant that wants to move into an available unit...but she wants me to hold the unit until April 1st. I'm willing to do that if she pays a non-refundable deposit of one month's rent. Is there a form/receipt for this? (I am an LPA member.)

I will apply the deposit to the first month's rent if she moves in April 1st, or I'll keep it if she doesn't. She'll still owe the security deposit on April 1st, and also the last month's rent.

She has agreed to this... I just need to find out if I'm going about it correctly.

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Re: Non-refundable deposit by Bryan (Ia) on February 22, 2012 @17:14	[ Reply ]

rental binder form

Re: Non-refundable deposit by Jack Klein (NY) on February 22, 2012 @17:17	[ Reply ]

Yes, Rental Binder form or if you are using an LPA rental application, it also provides for a non-refundable deposit.

Re: Non-refundable deposit

Re: Non-refundable deposit by Katiekate (New York) on February 22, 2012 @18:08	[ Reply ]

You got this wrong.. The receipt you give her must clearly state it is a holding deposit and not refundable if she changes her mind. But.. also, you are making a mistake by letting it be the rent money. Use it to roll into the security deposit on move in, require 1st month and last month on move in. If you must do this... do not let her move in without paying all of the deposit and last month...otherwise you have this long issue with when you will get the deposit..and... you might find that at the end you never get it..and must let tenant have the last month rent and you have nothing for the damages.

Re: Non-refundable deposit by Anonymous on February 22, 2012 @18:11	[ Reply ]

Do not use the word deposit anywhere in your conversations or in your paperwork. Use Non-refundable HOLDING FEE instead. By definition a deposit is refundable and a fee is not. The LPA rental binder document does not address the possibility of a refund becuase they may change their mind or back out. There may be a refund only if you the LL decide to. If you keep the place off the market for 35 days for this person you are entitled to the entire holding fee, with absolutely no refund. Non-refundable holding fee, and make it perfectly clear to this person.

Re: Non-refundable deposit

Re: Non-refundable Hodling Fee by Anonymous on February 22, 2012 @18:13	[ Reply ]

Re: Non-refundable deposit by Anonymous on February 22, 2012 @23:44	[ Reply ]

AS AN ATTORNEY I CAN TELL YOU IT IS OK TO USE THE WORD "NON-REFUNDABLE DEPOSIT". SOME LANDLORDS THINK THEY ARE SMART BY CALLING IT A "HOLDING FEE" BUT I HAVE SEEN THAT THROWN OUT OF COURT BECAUISE JUDGES DO NOT LIKE TO SEE LANDLORDS INVENTING NEW TYPES OF "FEES". SORRY ABOUT THE CAPS.

Re: Non-refundable deposit

Re: Non-refundable deposit by Mary on February 23, 2012 @10:04	[ Reply ]

California, Hawaii and Montana prohibit nonrefundable fees altogether. What ever you decide to call it, you should be prepared that keeping the 'non refundable deposit' is not excessive enrichment for the landlord.( Example, if you have an applicant put down a 'non refundable deposit' of $800.00 and the rental is off the market just a few days, you might have to prove to the judge that your damages are $800.00 in order to keep the entire deposit. The longer its off the market, the greater your chances. The judge would look at it as unjust enrichment to the landlord or could considerate it in relationship to the State liquidation damage laws.

Re: Non-refundable deposit by Anna Mouse on February 23, 2012 @11:53	[ Reply ]

For the reasons listed against why taking a holding fee I have not. When the tenant wants to sign the lease it is signed, fees are taken and keys are given. That said there is no overlap time of two weeks give or take. If they want the property they sign the lease and take possesion a few days later or the next day. Therefore there is no time to try and back out of the contract they have signed. If they do not want the property immediatly then they are at risk of losing it to someone who does. Most people who want to sign a lease but not move in until way later are trying to tie you up so they have options and you do not. They may find your property a good last resort but are still looking to find their ideal place. Either that or they want you to hold it because they need to give there LL notice. They don't want to have to pay their old LL and there new one at the same time. If they don't want to take posession right away then they "may" have the opportunity to take it in two weeks if someone else has not.

Re: Non-refundable deposit by Conni on February 23, 2012 @22:02	[ Reply ]

Thanks everyone. Before I posted, I called the help number on the Maryland Attorney General website. The person who answered said not to call it a "holding fee" but beyond that he was a bit vague. He seemed a bit uncertain, so I wasn't comfortable relying on that advice. It's not like I could ever prove I was told this officially if someone challenged it. Ugh. Confusing!

Re: Non-refundable deposit by P-Bone in WNY (NY) on February 27, 2012 @15:48	[ Reply ]

I would develop my own Rental Binder. I would state something to the effect that the prospective tenant has agreed to pay the landlord $XXX to limit his/her search for a prospective tenant for X number of days. After that set amount of days, if a lease is night signed, the landlord may resume searching for a new tenant. If at such time the prospective tenant agrees to sign a lease, the landlord will provide $XXX dollars of concessions towards the security deposit when presented with the full amount of certified funds for the remaining first and last months' rent. That way you don't use fee, you don't use deposit, you don't use holding. All you do is specify that the tenant is agreeing to provide a certain $ value for the concession of not pursuing other prospects, and that at the end the landlord is providing a certain $ value for the concession of a signed lease by a certain date.

"if a lease is NOT signed" as opposed to "night "