State Specific Question About: ARIZONA (AZ)

I showed a unit to a potential tenant on Set 19. Very interested and called me again on the 20th to see again with friends and daughters. She gave me a deposit of $400.00 to hold the unit til the 1st.

Now on the 24th she calls and says she changed her mind and doesn't want the unit. Do I owe her the full refund??

When that situation happens to me I prorate all the days that they had me take the unit off of the market. It would be is if they paid me rent for those days they had it off the market.

This comes up over and over again. Some will tell you to just keep it and have her sue you with the idea that she probably won't. Others will tell you that you have to give it all back -- which, by law, may be accurate depending on your state.

Regardless of what you do THIS time -- the key is NEXT time. NEXT time, you charging a holding FEE (not a "deposit") that makes it very clearly that, once the fee is paid and Holding Fee Agreement signed, that money does NOT go back to them and will only be applied towards their first month rent at the actual lease signing (or some other such event).

Oh man, these things never turn out well.

The prospective tenant can believe any fool thing they want about what it means but the ONUS still falls on the business person (the LL) who accepts that money from the nitwit to correct their wrong headed thinking... just like the Judge will tell you if it ever gets that far.

The LL has a (legal) responsibility to be clear what accepting money from someone is supposed to mean and the best way to achieve that is to PUT IT IN WRITING.

Has the nitwit been run through a credit check and criminal history etc and/or otherwise been found acceptable as a tenant?

If not, then why are you accepting any money?

If so, then why haven't they been signed up to a lease?

You should have called it a Nonrefundable Holding Fee. Otherwise, you need to return the money, as it is a deposit and she isn't taking anything. The only way you have any claim is if you reserved one in the document she signed when giving you the money.

You did hold open the unit for roughly four days. I personally would charge her for those days and refund the remainder.

A deposit to hold means just that. You are holding the unit open for the tenant. When they back out, you should take the damages from that deposit to hold. Those damages would be four days of rent.

My holding agreement is very easy to understand. I explain it in detail before one is submitted as well.

For my one bedrooms it's the same amount as the security deposit which is $800. The agreement states that if they do not sign a rental agreement and move-in by the date written in the agreement that they give up 1/2 of the $800 or $400.

If they do sign a rental agreement and move in the $800 goes for the security deposit.

Put your money in my sticky little palms and you won't see it again if you change your mind.

Here's the form I use.

Move-in Date: ______________________

Applicant's Name: _______________________________________

Phone: ________________________________________________

Current Address: ________________________________________

The applicant agrees to rent housing accommodations located at: _______________________________________________________________ for a period of _________ months.

The applicant also posts a holding deposit for the accommodations in the amount of

$ __ . This holding deposit shall be applied toward the tenants security deposit when the rental agreement is signed.

In the event the application for residency is not approved or accepted or, if the residence is not ready for occupancy, the deposit will be returned to the applicant. If the applicant fails to sign the rental agreement, fails to provide additional funds required for occupancy or does not take occupancy on the scheduled move-in date, all of this holding deposit will not be refunded to the applicant and will be retained by the owner/manager.

Reid: Because she called it a deposit and did not follow proper legal paperwork procedures for this "service" to "perform a certain task."

If you don't do it right, you don't win.

- John...