Potential renters want to wait an extra month?
Question:
I have potential renters, but they do not want to move in for another month. Am I legally allowed to require a deposit to hold the property for them and not look for another tenant?
Answer:
It depends both on what type of deposit it is and what the deposit agreement says, with the terms being in accordance with any state statutes on the subject.
If it is considered a security deposit, either by written words, by spoken words, or by some action or implication that might make a judge consider it to be a security deposit, the applicant might be considered to have become a tenant even without a lease having been signed by both parties – in other words the parties had entered into an oral lease. Oral leases up to one year are valid in most states. Unfortunately, it is usually difficult to prove the terms of oral leases. Therefore, any deposit taken should be accompanied by an adequately detailed statement of terms that is signed by both the landlord and the applicant.
A holding deposit is sometimes used to protect the landlord against taking the unit off the market for a specified time, with the landlord being allowed to keep some or all of the deposit if the applicant does not follow through with paying the funds and signing a lease agreement and can be used to allow the applicant time to get his move-in funds together. A properly worded agreement can protect a landlord from financial loss due to the failure of the applicant to perform as agreed. However, the landlord cannot rent the unit to another applicant unless the original applicant has materially defaulted on the terms of the agreement, preferably in a way that is indisputable.
If I understand your question correctly, you’d like to take the deposit without giving the applicant the right to rent the unit if you happen to find another tenant at any time. I think that this would only be acceptable to a reasonably intelligent applicant if you promised to return the deposit in full if a new applicant was accepted before the original applicant was ready to close the deal.