Property Management Requirements Legit?

Question

Hello!

I posted this earlier in the "Renter's Forum" ...

I recently found a house being leased that I applied and got approved for. The house is managed by a property management company representing the landlord.

The house is already in move-in condition. A previous applicant was approved but backed out because of financial problems, I was told. It was verbally agreed upon that my intended move-in date of mid-February (about a month from now) is fine with the land-lord. The property management requires that I put a holding deposit of a sizeable amount so that the house can be taken off the market listings. This deposit is non-refundable if I decide to back out and not rent the house anymore. In addition, the property management requires that:

1. the deposit be made in money-order or cashier's check (ie, no personal checks accepted)

2. the rental agreement be executed near the official move-in date (ie, about 2-3 days prior)

Are the two requirements above legitimate? I'm concerned that after I put in my non-refundable deposit, I'll be "pressured" to accept the actual terms of the rental agreement when it's finally drafted. Because if we do not agree on something in the agreement and I refuse to sign it, they might say that I'm backing out and hence have to forfeit my deposit. How can I protect myself against this possibility? I'm willing to sign the actual rental agreement and put down the full deposit and first month rent anytime.

Thank you in advance for any inputs, and best wishes.

Ima Renter

Aaron Catt · Answer

Simply put, 1. Yes, and 2. Yes

Here's why.  If you tell me you are going to rent my home in the  middle of March and I stop showing it to prospective tenants/applicants and then you decide NOT to rent it for whatever reason then I am stuck holding the bag.  It would then be near impossible to make up for the lost time and the cost that I incurred by the vacancy.

This is very common practice and if you want to feel more protected, don't agree to the 'hold deposit' until you see a copy of the lease that you will be required to execute.  This lease needs to be called "exhibit A" in writing and that it is agreed that you and the management company will be signing 'exhibit A' lease at the time of move in.  This way, you know what you are getting into before you give them the deposit.

If you move forward with this (again, its very common) just make sure that you get copies of all of the paperwork with ALL signatures and a receipt for your deposit.

Lastly, keep in mind that you have just as many rights, if not more, than the owner when it comes to landlord/tenant law and if you need help understanding the lease that you have an attorney look at it before you sign it.

Chris L. · Answer

I may get hammered by other landlords but good tenants are hard to find here in Fort Wayne.
I have often offered the last week or two of the month rent free if the tenant takes the utilities.
Of course, I have collected security deposit and first month's rent.
I see this as a win-win for me.  Utilities now covered by the tenant and that allows them a few moving days without having to rent both places.  Establishes good will with the tenant and I find that most of the time, tenants will not move in until the first of the month anyway.
That is also fewer days that the place is left empty.  We have had a problem here with thieves breaking in and stealing the copper plumbing of empty houses.

Ima Renter · Answer

I did go ahead and asked if the place can be rented lower.  The rents in our area are have been quickly going down, anyways.

Ima Renter · Answer

Hello Guys, just to give an update:

I went ahead and proposed the above terms last Tuesday, which the property management immediately declined.  They insisted that if they entered into a lease agreement 3 weeks before the move-in date, they might get sued by the owner.  (Still I don't understand what the lawsuit would be based on, if the owner was to be informed of the proposal first and approved.)  So we mutually decide to split ways, and wished each other well.  Then today...

Property management gets back to me, saying it received an 'OK' from the owner to type the lease agreement before actual move-in date, but they will wait to hand over the keys until at or near the move-in date (I was ok with this all along, had previously told mgt. that I didn't expect to get the keys before move-in date).

So I guess I'm in better position than before.  There shouldn't be any risk of not being able to move in on the move-in date after the lease agreement is signed, should there?

Additionally, am I in a better position now to maybe ask for concessions, like a little lower rent?

Jeff Takle · Answer

Each state is different and some do not allow "holding deposits". Massachusetts, of course, is one of those. But, assuming it's legal...

You can always sue them in small claims court if they do try some kind of pressure situation at lease signing using the holding deposit. If you have a blank copy of their template lease, keep it. Go to the lease signing and try not to walk in with a chip on your shoulder.

I'd think most judges would side with a tenant if your worst case scenario happens. I agree with Jon's assessment of why the landlord likes this situation. Remember, landlords want the vacancy filled so it's also in their best interest to get the lease signed 3 days prior...you backing out is a bad thing for them, even with a holding deposit they're likely to lose money.

You still have leverage.

Jon Holdman · Answer

If I understand correctly, CA landlord/tenant law is very pro-tenant.  Evictions are lengthy and difficult.  That may well be why they don't want a lease until just before the actual move in.  As I understand, it can take several months to do an eviction in CA.  And, if you had a signed lease but didn't move in, they would have to evict before they could rent it to someone else.

I would also consider that deal.  But, like Mike says, I would only do it if I though I couldn't rent it sooner.  Since its getting toward the end of the month, I might propose back to you starting the lease on Feb 1.

Ima Renter · Answer

Thanks much John, Mark and Mike for the insightful inputs.  Your points pretty much cover both renter and landlord points of view.  John, I am in California, btw.  I am looking that far ahead to sign the lease because I really like this new place, and want to lock it in.  My current lease expires about the same time, a month or so from today.
            
            Why the property manager verbally said that a move-in date as far as month from now is okay, but at the same time declines to execute a lease agreement soon, remains a mystery to me.
            
            I plan to propose the following to them, and just walk away if they are not agreeable to it:
            
            -they write up the lease agreement as soon as possible and provide it to me; I'll review, sign and return it the next business day if all terms are agreeable; otherwise they find a new tenant
            
            -I give them a money order / cashier's check covering the sum of the full deposit and first month's rent on the same day I return the signed lease agreement
            
            The above proposal sounds fair to me.  It does not create a situation where I get the keys but not move in, because I will have committed with the deposit and first month's rent by then.  At the same time, I ensure that all lease terms are agreed upon before I commit and sign the lease.  Lastly, asking them to act on this proposal ASAP minimizes us wasting each other's time.
            
            Do let me know what you think of this.  Grateful to all of you!

Mark N.A · Answer

Mike - I like your policy of getting both the deposit and first month's rent before signing any lease.  I will do so from now on.

Wow! -- this may be the first time I've ever learned anything the 'easy' way.

Thanks.

Michael Rossi · Answer

I think that's a great solution and as a landlord, I would do that if I didn't think I could rent it before that time.  However, since the lease isn't effective until a month from now, you wouldn't get the keys until the move-in date shown on the lease.

Mike

Michael Rossi · Answer

I NEVER sign a lease with a tenant until I have both the deposit and the first month's rent in full and in CASH!  Doing otherwise simply invites the tenant to move in and not pay.

Mike