Holding Deposit or Security Deposit

[Nicholas Bolcon]

Hello BP, as always your input is appreciated.

To start I'm in RI in case anyone has familiarity with the local laws.  

I had applicants that passed my screening finally. They can't move in until June 1st which I think is reasonable for giving notice and not renewing their old lease. But of course that means I won't have it on the market for a month before they move in. Should I immediately have them sign a lease to start on June 1st and collect security deposit? Or should I get a holding Deposit equal to the security deposit (which is also one months rent)? 

I'm wondering which protects me best. RI law says security deposit can't be deducted from for future unpaid rent. I'm not sure what that means in the case of breach of lease and never moving in. 

Any advice is appreciated!

[Steve Vaughan]

I used to have a holding deposit, but changed it to Holding Agreement since deposits by definition are refundable.

My agreement states this money will convert to a security deposit when they move in, but is forfeited if they don't.   

When asked to hold vacant a full month, I try and get them to split the vacancy with me.  It hasn't happened in a long time but I have done it for an exceptional applicant. 

Having the deposit the exact same amount as rent could cause confusion with your tenants.  They may see it as a last month's rent.  Misunderstandings are not good.  I'd make it a little different.