Refuse to give deposit until the day of move in

[Roy Gutierrez]

Well I have this issue, my house is 90% completed (I completely rehabbed it and looking good if I may say so!), it should be finished this weekend, new appliances coming in, touch up paint, install new counters, and ready to move, I picked a group of 3 guys (2 lawyers), I was asking for first,last, 1.5 security deposit but they said first and security deposit and I gave in b/c their references panned out.

Well, I told them lets get together and sign the lease and give me the deposit so I can hold the property. They came back with:

"We will give you the 1.5 months security deposit and 1st months rent on May 1 when the house becomes move in ready and we receive the keys."

I definitely see their point that they're covering themselves for not getting an unfinished house, but I can't risk losing a month if they don't move in, I feel like going to the people that came at #2,

How would you guys handle this?

[Jon Holdman]

Lease signing is taking possession. We both sign the lease. They hand over the agreed upon amount (minimum of one full month's rent plus security deposit) in cash or money order and I hand over the keys.

In holding situations we sign an agreement to hold the house until the lease signing/move in day. They give me a nonrefundable deposit to hold the place equal to the security deposit. If they sign on the agree-to date, it becomes their deposit. If not, I keep it and resume marketing the house.

In your case, though, the place isn't ready. So, I wouldn't demand any cash at this point. I would tell them they're at the top of the list and I will call them as soon as its ready. Assuming that's Monday, I would call them on Monday and ask that they either do an agreement to hold that day or actually sign the lease. My preference is always to sign a lease and hand over the keys a few days early rather than have the place empty. I would tell them (now) that I will continue to market the place and take applications. If I get another qualified applicant who is willing to put down a hold deposit right away I would offer them the opportunity to put down a deposit. If they don't, I'll lease it to the other applicant. I wouldn't be too demanding, though, until it was really ready. That last 10% can take longer than you expect.