returning deposit to hold question

[Justen Ashcraft]

I am returning a deposit to hold the property because the prospective tenant doesn't meet my qualifications. What should I include as far as a letter goes? Should I give them the reasons for denial? Should I mail it with a certified letter? They paid it with cash and I did give them a receipt. I will be mailing a check, is that the proper way?

[Marcia Maynard]

I've never returned a holding deposit. We convert them towards the security deposit once the tenant moves in. We only take holding deposits after we made our offer to rent and a move-in date is determined. If the move-in date is soon (in a week or less) we don't take a holding deposit. If more than a week, we take $100 for each week or any portion of such for the holding period.

If the tenant changes their mind and decides not to move in at all, we keep the holding deposit. It's our compensation for taking the unit off the market.

Whatever you are doing, you should follow the landlord tenant laws for your jurisdiction. If we deny housing to an applicant, our law requires us to mail an "Adverse Action Notice", which is essentially a denial letter. It states reasons for denial in general categories and we just check the box of the reason that applies.

If we did a thorough background check already and paid for a credit report and criminal history report with the application fee, we don't give it back. However, if we can see by reviewing the application that they won't meet our minimum criteria to rent, or if we decide to rent to someone else before processing their application, then we return the application fee. We mail a check by regular first class USPS mail and get a "certificate of mailing".