Holding fee ... Twisted logic - Landlord Forum thread

Holding fee ... Twisted logic by outabout (CO) on March 17, 2012 @17:46

I just felt that I needed to vent.

In mid Jan, a perspective tenant put down $1000 deposit to rent starting at Feb 1, it was clearly stated and I emphasized verbally it was non-refundable. A week later, after turning away many perspectives, he changed mind and wanted to get the money back since it was "only a few days". Being a soft heart, I said that I would probate from Feb 1 and refund the balance after I re-rent. I re-rented it Feb 11. So I deducted 10 days of rent, and sent him the balance. He now felt "being taken advantage of". He figured I rented 62% of Feb, therefore I should have given him 62% of his money back. What kind of logic is this? So if he gave me $10, I would need to refund $6 and 20 cents?

Some people, you give them an inch, they want a foot. Legally I didn't have to refund one cent, or I could have started the deduction from the day he put down the deposit not from the his lease starting date.

My next hold fee policy will be: it is refundable after deduction of daily rent from the day I took my property off the market to the day of re-rent, plus re-renting fee.

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Re: Holding fee ... Twisted logic by Katiekate (New York) on March 17, 2012 @17:55	[ Reply ]

I use a simple receipt...it is the same paper that my entire "procedure" is written on. It says in bold face..clearly. It is a RESERVATION FEE, and is NON-REFUNDABLE if the prospect later changes his/her mind. I have them sign this, and I sign it. I just don't have the time of inclination to mess with formulas, pro-rate this or that, add this or that fee.... Just straight up...NO REFUND. And I have the signature to it!

Re: Holding fee ... Twisted logic by outabout (co) on March 17, 2012 @18:18	[ Reply ]

Thanks Katie. I do have the signed receipt that clearly states non-refundable as well. I was just too soft hearted. I have learned to be more business like, thanks to this forum. I have been thinking what I want to do going forward. What would happen if we wind up in court? What if the perspective argues he changes mind only a day, or a few days later, should not suffer the loss of entire amount. Would judge be inclined to side with him/her and make me refund a portion? I think this may likely happen. So if I define my loss as the loss of daily rent from the day I took the property off the market to the day of re-rent, I should have my basis covered.

Re: Holding fee ... Twisted logic

Re: Holding fee ... Twisted logic by Anna Mouse on March 17, 2012 @18:53	[ Reply ]

I won't take a holding fee for reasons including your story. When my property is on the market I continue showing it until the day the lease is signed. I will not sign a lease that starts two weeks or a month out. I have been through the senario in my mind that you describe here and its just dosn't seem to be the best way to do it for my property. (There are so many people interested it just dosn't make sense to sign a lease before the prospect tenant wants to move in.) So if someone wants to rent the property I tell them right off, if they ask, I will not hold it. I have had people not rent because I would not hold it but who knows if they were sincere in the second place. It is a first come first serve basis. Showing your property on the same day as lease signing is a good way to just keep the system flowing. It is an insurance policy that the property will be rented to the first qualified applicant. It takes work to prepare the house for showing. More work to answer all the prospect tenants. More work to set up showings. Then finally there is the signing of the lease. If you stop short and do not continue your system of pre screening and showing while you have a prospect tenant being screened you are cheating yourself. Hope this did come across as rude. Trying to explain a system that I use that I think would work better for you.

Re: Holding fee ... Twisted logic

Re: Holding fee ... Twisted logic by outabout (CO) on March 17, 2012 @20:55	[ Reply ]

Anna Mouse, it wasn't rude at all, it is very constructive. It is definitely another option to go.

Re: :) idea for next time.

Re: Holding fee ... Twisted logic by Lacretia (FL) on March 18, 2012 @10:31	[ Reply ]

did you use a "holding" form and have his sign it? becuse a court could find that the $1k was a SD and not a holding fee. I know you stated it was a verbal agreement but most states take the side of the T

Re: Holding fee ... Twisted logic by Mark on March 18, 2012 @11:28	[ Reply ]

Colorado law is going to consider it a security deposit, so it can't be non-refundable. That's because the statute says that any amount used to hold an apartment is a security deposit, no matter what the landlord calls it. 38-12-102. Definitions. (2) "Security deposit" means any advance or deposit of money, regardless of its denomination, the primary function of which is to secure the performance of a rental agreement for residential premises or any part thereof. Because it's given to secure a tenancy, it's considered a security deposit. But because its to protect against unpaid rent and/or damage, if they don't move in, and you can't find someone else, you can apply it to cover unpaid rent.

Re: Holding fee ... Twisted logic

Re: Holding fee ... Twisted logic by outabout (CO) on March 18, 2012 @11:48	[ Reply ]

Lacretia: yes there was a written form and receipt and he signed for it, AND I emphasized verbally before he signed it. Thanks for bring it up.

Re: Holding fee ... Twisted logic by outabout (co) on March 18, 2012 @11:48	[ Reply ]

Lacretia: yes there was a written form and receipt and he signed for it, AND I emphasized verbally before he signed it. Thanks for bring it up.

Re: Holding fee ... Twisted logic by outabout (Co) on March 18, 2012 @11:56	[ Reply ]

To Mark: Your interpretation of the law 38-12-102 is incorrect. I have read the CO laws several times, and just read it again thanks to you. The context and intent of this law is very clear, it is when there is ALREADY a rental agreement, advanced payment is considered the security deposit. It goes on discussing the return of SD after the termination of the rental agreement. There is no law regarding a contract to hold a rental property for a future rental agreement to be secured.

Re: Holding fee ... Twisted logic