State Specific Question About: COLORADO (CO)

Hello. A deposit was taken to hold a rental for 3 weeks for a prospective tenant with a verbal agreement. That prospective tenant has now backed out of the agreement but wants the deposit back. Legally, does it have to be given back in full?

Thank you

Sandy

Aww...live and learn this multi-language biz...

Deposits generally have to be returned if lease is not signed and all moneies paid...

Next time, call it a non-refundable Holding Deposit...non-refundable if the applicant backs out on the rental deal...

Something like this will help you next time -

Non Refundable Binder

This will acknowledge receipt of the sum of $ _____ by _____________________ ("Landlord") from_____________________ ("Applicant") as a holding fee to hold vacant the rental property at _____________________, until _____________________ at _____________________. The property will be rented to Applicant on a _____________________ basis at a rent of $_____per month, if Applicant signs Landlord's written _____________________and pays Landlord the first month's rent and a $ _____ security deposit on or before that date, in which event the holding fee will be applied to the first month's rent.

This Agreement depends upon Landlord receiving a satisfactory report of Applicant's references and credit history. Landlord and Applicant agree that if Applicant fails to sign the Agreement and pay the remaining rent and security deposit, Landlord may retain this holding fee to compensate Landlord for lost income and inconvenience.

This binder will be returned to the Tenant less the cost of the credit check $_____ if the Tenant is not approved for any reason.

Date ____________________

Applicant __________________

Date ____________________

Applicant __________________

Date ____________________

Landlord __________________

It is not a non-refundable holding DEPOSIT it is a NON-REFUNDABLE HOLDING FEE.

Rental Holding Fee

APPLICANT (S): _______________________________________________

ADDRESSES: ________________________________________________

The above named applicant(s) has been accepted to occupy the premises listed above. A holding fee of _____________________________________has been paid to reserve the right to rent the premises at the above address. This holding fee will hold the premises until ______________when Applicant will have signed lease or rental agreement, placed required utilities in his/her name, and take possession of the rental unit. Upon taking possession, this holding fee will be applied to the security deposit. If applicant(s) does not take possession for any reason by the above date this holding fee becomes NON-REFUNDABLE.

____________________________ ____________________ Applicant Date

____________________________ ____________________ Applicant Date

____________________________ ____________________

Management Date

FWIW I followed the advice of others on this forum and implemented the "holding fee" policy tonight. The lady showed up with her check for what she thought was the security deposit. But I brought out the form (which I'd mentioned in a voice mail to her; but it was a brief mention...didn't want to scare her off) and explained it to her, and why I felt it was appropriate. She said: "so if I don't sign the lease and pay rent by May 15 you get to keep my $800?" And I said yes. She said "ok, where do I sign?"

Thank you all for your input. Believe me...lesson learned. I will definitely do things differently in the future.