Holding Deposit / Tenants Backed Out

[Nick K.]

I'm renting out a SFR in California. I had a young couple apply and pass the screening process. I offered a lease and they accepted. Because the move-in date was still a ways off, I offered to take a holding deposit/fee in lieu of full first month's and security deposit. Rent is $2500. Holding deposit is $1000, an amount which we both agreed was fair. I drafted up a short contract stating the terms and the move-in date. Conditions were that if they backed out of the lease, they'd forfeit a $200 cancellation fee and should move-in day come and I still don't have the unit rented, they pay a pro-rated daily fee for lost rent. If rented before the move-in date, I'd refund the remaining $800.

They backed out. Since then, I've re-marketed the property, made every effort to get it rented and now have new applications coming in. The thing is that the best qualified applicant's move-in date is AFTER the couple's move-in date. I plan to give the new tenant their desired move-in date and simply deduct the lost rent from the holding deposit. I'm also not factoring the $200 cancellation fee into the lost rent, because I consider it a separate charge for my time and energy of having to re-market.

At the end of the day, they broke their contract and should be held to any extent necessary. Although, I have also considered asking the new tenant to "meet me halfway" and move in sooner. Although, neither them or nor I owe the couple that backed out, anything. I've also considered letting the couple know about the expense they'll incur by backing out, and reconsider them as tenants, should they change their minds. But I stopped myself, because I really don't want them as tenants anymore, if they're willing to put me through this.

How would you have handled it? Thanks for the opinions.