Landlord Question and Answer Forum

I have a guy that paid his app fee ($30) and deposit ($800) to hold one of my duplexes (11/18/15). I approved him (11/20/15), and deposited his deposit check (12/8/15). I sent him the lease agreement, and move-in was set for 1/1/16. He didn't send the signed lease back, but I usually collect on move-in day anyway (maybe not a good idea?). He called me 12/30/15 and said he would not be moving in and wanted his deposit back. I explained to him that we will not be able to return it until we have another tenant lined up. The deposit would have to cover the duplex being empty. He called this morning and asked for it again, I told him I haven't found a tenant yet, and he said he would be going through civil court. Everything I have read says we have the right to keep it (to cover the loss of rent in January). I would LOVE some legal advice or resources for Texas laws. Thanks!

If the lease was not signed then then you must give back the deposit. The only deposit that may be held is the application fee. If you hold the deposit you may be taken to court and you could be held accountable.

Posted by Richard W, PA on Wednesday, January 13, 2016

Call a laywer because I suspect you will have to return the deposit. For instance, Was it written clearly to him that the "Deposit" was non-refundable and that the property was on HOLD? AND how long was it on hold (you need to state how long on hold and when you expect the lease to be signed after approval). There are only a FEW circumstances where you can accept non-refundable money and it gets so complicated that's its almost NEVER worth using it. Once you approve a tenant you NEED to get a signed lease within 1-5 days from approval. I doubt you will be able to keep his deposit as you cannot just mail a lease to a potential tenant and STOP trying to find tenants. He has a right to change his mind AS you have a right to get a signed lease by another tenant IF he doesn't comply with your time period to sign a lease. You have the right to keep the money to cover loss of rent IF he had signed a lease but again you have no contract with him. SO I hope you will change your current process and let people know (preferable in writing how your application process works, stating what is expected of them once approved - that is, that a lease is expected to be signed within 72 hours. You need to MEET your tenant and go over the lease and WITNESS the signing. (If you don't witness it how do you know WHO signed the lease)? That will be your next court nightmare - a tenant claiming he NEVER signed the lease. Lastly, google Texas Landlord/Tenant Law; read and keep it and re-read before each new tenant search. ALSO the tenant/landlord act may not be specific regarding NON-REFUNDABLE deposits; hence find a good attorney who you can call with questions. (Well worth paying $100 for a 20 minute conversation that may keep you out of a costly court scenario). Good luck.

Posted by David & Joanna D, PA on Tuesday, February 2, 2016