Tenant did not sign lease, handed Security Deposit, now doesn't want the place and requesting refund

[Raj Kumar]

Yesterday, a prospective tenant called and scheduled a showing for one of my warehouse properties. Since I was out of town, I gave them the lock box code to tour the property. They looked at the property and texted me right back that they are very interested and would like to sign the lease right away as they were going out of country on Monday. I emailed the lease and told them that i need the signed lease and 4000$ cash(1 month rent(2000$) and 2000$ security deposit) and they can drop everything at one of my tenants as i was out of town. I get a text that she has an emergency and her mom will instead and come in and drop the cash and she will sign the lease electronically. This is when I smelled something fishy, but this property has been vacant for a while, So i thought I will take a chance. But to my surprise her mom came down and deposited 3000$ cash with my tenant and they gave her a receipt acknowledging the deposit. I texted back this morning again asking for the lease, she said she will sign and send it ASAP. I just got a text few mins back that they are not interested in signing the lease as they have to do extensive renovations and requesting a refund of their entire money as they have not signed the lease. 

I asked my friend to inspect the property now just to make sure and he said everything is fine except they key is missing.

Based on your experience, Please advise what will be the best course of action... Thanks in advance for all your help!

[Bill Hamilton]

I would bet it is a scam. Possibly laundering money (as said above) or maybe the bills are fake. I am assuming this was actually cash rather than a cashiers check etc. I would call the bank first thing and ask them to examine the bills. I would also tell them the money was safely deposited in a bank as per normal procedure and that you don't keep that type of cash on hand. Let them know that as soon as the bank examines the currency and confirms the deposit is valid you will be more than happy to refund their funds. If they are above board they should be fine with that. I would also tell them that due to the unusual nature of the entire transaction you are going to arrange to transfer the funds to them at your lawyers office so there can be an officer of the court there to witness the transaction so there will be no question of whether or not they received their funds in their entirety. Also that whoever picks up the funds will have to present valid ID that matches the name on the lease (even though they did not sign it) so the lawyer can make sure the proper person is receiving the funds. If they balk at this, stand firm. That would indicate to me they are running a scam. I would bet your lawyer will have a few additional ideas.