Borderline Tenant Application

[Emilio Ramirez]

I've taken a cash deposit from a couple and verbally told them that they can have the apartment. Part of the acceptance was a $25 discount of rent from $850 to $825. In observing their behavior when they gave me the deposit I became a little concerned about their ability to pay. I have verified their income and it will be tight, but I have no written criteria for rejecting an applicant on income. A second applicant has applied and is much more financially able to rent the apartment. They are also able to pay the full rent. There has been no lease executed between me and the first tenant.

Since I've verbally offered them the apartment, do I have to rent it to them? Can I simply return their deposit and tell them that they weren't really qualified? I think if I ask them to pay the full $850 they will opt out. Or do I just have to rent to them now that I've taken a deposit and verbally accepted them? I've been looking at my state's landlord tenant law but can't come up with anything here. Any thoughts on the situation.

Much appreciated.

[Kelly Lynch]

I agree with Jeff! Your primary concern needs to be your rental. To hell with the tenant that has to squabble with you over $25 bucks a month. If you have a tenant that's sketchy on the finances, your best bet is drop them. You may even give them a little extra money back on top of their deposit! Give them so third party excuse like, "After showing your application to my partner, he doesn't feel you'll be a good fit for this rental."

In the world of business, verbally contracts are worthless. The Statue of Frauds states all real estate contracts have to be in writing. Use verbal contracts when negoitiating with your wife over where to go for dinner! :cool:
I work primarily out of Texas and I know the clerks and judges in the precincts where I have properties. I have been sued before by a tenant on a L/O deal for return of their option money and the judge only asked me one question, "Did I have a Purchase and Sale Agreement?" That was it! From there he tore into them and I just stood there trying not to laugh. I think judges realize that landlords and investors like us "vote" and most renters don't!
Most tenants aren't sophisticated enough to go to court and battle anything out. If they did all it would amount to would be a civil judgment that they can't collect on.
Next time no matter how desperate you feel about covering a payment, it's ALWAYS 10x worse dealing with a loser tenant. We've all been there and anyone up here who's been in this business long enough has "gone to a seminar" when trying to help someone who can barely scrape together the rent.