Landlord received a deposit to hold a unit for a new tenant. Tenant changed his mind before move-in date. Can Landlord keep the deposit?
Answer:
Your question needs clarification regarding specific details not provided in your posting. A holding deposit is associated with a potential tenant, the applicant, who has requested the landlord take the rental unit off the market until the applicant qualifies or otherwise fulfills the landlord terms and conditions for tenancy. A tenant is the applicant who has executed terms of the lease agreement. Although you call the person a tenant, you do not explicitly state that the lease has been fully executed. It is not clear from your information whether the deposit was a security deposit under terms of the lease agreement or was instead actually a separate “holding deposit” for which there should have some other written agreement.
If you and the person executed a written lease agreement, you can hold him to the terms of the lease. However, if the person chooses to break the lease, you can in almost all states only hold him responsible for the rent until a new tenant begins paying rent and you must exert reasonable effort toward finding a new tenant. You can probably also hold the person responsible for paying extra expense related to again having to market the property, including advertising and leasing commissions.
If it is an oral lease and there is no written lease agreement, it would be your word against his as to the exact terms of said agreement unless there were witnesses on one or both sides.
If the deposit was a holding deposit you must abide by the terms of the holding deposit agreement. Again, if there was no such written agreement, it could be difficult to prove the terms of the deal.