Problems with initial rental deposits - Posted by Kim (South Tx.)

Posted by Bud Branstetter on October 18, 1998 at 09:31:24:

Do you charge a fee with the application so that you get paid for your expense of a credit check? Do you have a statement on your application that deposits/application fees are not refundable?

You can view the money as rent for the time it is not available to someone else. I have given money back after deducting expenses for a new ad and prorating until someone new occupies the property.

Problems with initial rental deposits - Posted by Kim (South Tx.)

Posted by Kim (South Tx.) on October 18, 1998 at 09:09:57:

I am hoping that someone can give me some better direction in handling initial rental deposits on mobile homes. We have a prospective tenant fill in an application and will take an initial deposit at the same time. If the application doesn’t work out, we give the check back. After they have been screened and have been approved, we deposit the check. When they move in, we then take their rent money and have them sign a lease. It may take them a week or two to get into the rental, and in this time period, we have had people “change their minds”. (If I have them sign a lease at the same time I take the application, I am worried that they may not check out.) I am wondering if anyone has dealt with this and what they did about it.

Re: Problems with initial rental deposits - Posted by Bo (GA)

Posted by Bo (GA) on October 19, 1998 at 07:29:56:

I never have a problem with accepting a personal check for a deposit, as long as it is issued from a local bank; All the banks in my area (Atlanta,GA) will cash their own checks, so why deposit it and wait for it to clear? I also avoid having my own bank charging me for trying to deposit a bad check - the worst that can happen is that the tenant’s bank will give me the check back - no arguments about bounced check fees - a rubber check for the deposit = automatic tenant rejection. All this means that I will know the very same day (or next business day) if the check is good or not. If I then have to make a refund for whatever reason, I can either write them a check or pay them cash.

Just my two-pence worth.

Re: Problems with initial rental deposits - Posted by Rick Vesole

Posted by Rick Vesole on October 18, 1998 at 18:58:40:

Until you accept them as a tenant, they have an absolute right to change their mind and withdraw their application. In this event, you must return all their money, unless there is an agreement that some of their deposit is nonrefundable as an application fee.

On the other hand, once they have been accepted, if they change their mind, they are responsible for any lost rent, cost of re-renting, advertising, utilities, etc.