Tenant paid security deposit

[Nick Kelly]

Went through tenant screening process, tenant filled out application and I approved. She sent the security deposit in to lock down the place. It took a few days to get the lease together because there was a little back and forth (she didn’t mention she had a dog until initial lease came through and it mentioned no pets). I agreed to allow the dog for a pet deposit (even worked with her on this bc she couldn’t afford extra every month for pet fee so I agreed to a one time deposit). I sent the new lease the following day and she said that she was now worried the dog would damage the unit and didn’t feel comfortable moving in ( along with a few other things) and said she is scheduling other places to see and would like her deposit back. At this point I have turned away other potential tenants and pulled the postings down. This process has wasted a little over a week of time. Although there is no signed lease, it has wasted a lot of my time and delayed getting other viable options in (money!). Is there a protocol on how to proceed with the security deposit?