Section 8 tenant's Security Deposit Forfeit in PA

[Sai T.]

Hello Everyone,

I have a somewhat confusing and complicated Security Deposit dilemma. Please just bare with me for a little bit. The Section 8 tenant saw the unit in the last week of June 06/28/16 and filled out the rental application. She told me that an Agency was paying her Security Deposit of $1,500/-. Her rent is $1,300/-.

On 6/29/16 the application approved conditionally to pay the security deposit by 7/5/16.  

There was talks back and forth for security deposit and typical Section 8 stories/drama!

Finally, on 7/14/16, the lease was signed with the following arrangements:

Lease start date of 7/10/16

Security Deposit of $1,500 due on 7/8/16

First month rent of $1,300 due on 7/30/16

I added this comment in the lease "The Security Deposit will be forfeited, if the lease is not signed by 7/30/16"

I also collected the Security Deposit check of $1500 from the Agency.

Unit was removed from the market.

From 7/14/16 till 8/10/16, I asked almost everyday about the move in date, and rental packet but everytime her answer related to awaiting some sort of response from the current landlord.

Finally, I told her that I had many prospective tenants that were intrested in renting and were declines I'm losing rent, paying real estate taxes and utilities expenses.

We need the August rent. She said Section 8 does not pay the rent until she moves in. So I said okay but somebody needs to pay the rent/holding fee.

She can not move in and wants her Security Deposit back. I said the security deposit has been forfeited and to read the leasing agreement for more info. The Agency's lawyers are reviewing the leasing agreement.

I am not sure what to do and what my options are. 

Thank you for help!