Tenant provides deposit to hold unit. Backs out. Advice?

[Bobby Walters]

A question for you veteran landlords....

I have a very nice condo that is highly sought after by prospective tenants. I had someone who wanted the unit, and called me stating that he wanted to lease it, and would bring me a check to "hold the unit for him". He gave me a $1000 check to hold it --- this is the amount of the security deposit. He also completed an application and background screening, which was accepted by me and such was communicated to him via email.

However, prior to signing the lease agreement, he backs out on the deal. Because I held the unit for him, I have time lost and potential rent lost on account of his reversal.

Do I have any recourse to keep all or a portion of the security deposit as consideration for the time and lost rent due to him backing out?

[Jon Holdman]

My "hold deposit" form state multiple times in large, bold letters the money is non refundable. The formatting will be messed up, but here's the text.

Nonrefundable Deposit to Hold Property

______________________________________________________________________

______________________________________________________________________ [Tenant(s)] are agreeing to a deposit of $_______ paid to _____________ (Landlord) to hold his/her position to rent the property located at: __________________________.

This deposit shall be paid as follows:
( ) In Full Amount of $__________
Or as otherwise described here:____________________________________________
______________________________________________________________________

All of this deposit will apply towards the rental of said property (it will become the Tenant’s security deposit) provided Tenant signs a lease with Landlord by __________ , ______. This deposit is non-refundable, and Tenant must pay his/her first month’s rent of $ ____________ before moving into the property on _____ ,_____.

Time is of the essence. If a lease is not signed or payment of first month’s rent is not received by Landlord on time then Landlord may at his/her discretion cancel agreement with Tenant. In this case the Tenant shall forfeit his/her deposit as liquidated damages to the Landlord. In the event of a major unexpected occurrence, Landlord may at his/her discretion refund all of the Tenant’s deposit and cancel this agreement. All option payments and first month’s rent must be in the form of cash, certified funds or money order.

Tenant understands that he/she does NOT have a valid lease for said property UNTIL he/she signs the lease and pays the first month’s rent.

IF he/she does not make these payments on time, he/she loses all claims to lease said property. In no case may the Tenant enter or otherwise occupy said property until ALL conditions and terms in this agreement have been fulfilled.

_________________________________ ______/_____/_____
Tenant Date

_________________________________ ______/_____/_____
Tenant Date

_________________________________ ______/_____/_____
Tenant Date

_________________________________ ______/_____/_____
Landlord Date