Deposit w/o lease signed, tenant changes mind

[James Fowler]

Hello all,

We are in Illinois, but I'm assuming this may be good for myself and others down the road to hear responses to.

Have a qualified prospective tenant who was to sign a lease a week from now, and had paid a deposit to hold the unit weeks before that.

A deposit held for a unit with verbal and written transaction record enough to hold firm to that commitment? Our is there legality I'm unaware of, setting the tone why we would must give that back?

We have turned down others for this unit since taking the deposit, and the owner may not be willing, unless legally required.

Does anyone have any insight to a situation like this?

[Ryan B.]

When I get a tenant approved, I have them provide $$ and they sign an "option agreement" that states the provided money stays with me if they back out.  If they follow through and sign a lease, then the money becomes their deposit.  So, I don't know what language you used around the situation when you took money from them and took the property off the market.  I'd tell the person that you'll put the property back on the market and try and get a renter that will move in on the same timeframe that they were supposed to.  However, if you don't get such a renter, then you've been damaged by their actions and by you taking the property off them market in reliance on their agreeing to rent the place.  I'd explain that the money they provided is used to offset your damages.  If you can get a renter in there for any portion of that first month, then your damages are potentially less, and you may be able to return a portion.