Landlord is holding deposit

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Browsing through the internet, one can find a lot of cases that tenants complain about their initial deposit not returned by the landlord when they decided not to move in. Now, before we go ahead and file a complaint or a lawsuit against the landlord, let us remember that there are two sides of every story.


So, what is the purpose of the initial deposit? An initial deposit is a type of payment that you make so that the landlord/property manager will hold of showing the unit/apartment that you are interested to to other interested parties. It is sort of a reservation fee that you can sometimes take back if in case you decided not push through with the rent. Now, there are a few things to consider so that you can determine if you can get your deposit back:

  • Did you sign a lease agreement or an application form? Usually, you will have to sign an agreement when you do decide to push through. If you did sign an agreement and there is a clause with a grace period for backing out and you got over it, you’re stuck until the lease expires. But if you didn’t then you can still get out with a portion of the deposit but still depends on the agreement you had with the landlord.
  • Was there a receipt? Always make sure to ask for a receipt every time you make a payment. Not only does it help the IRS but it is also proof that you did pay for something.
  • What do your state laws say? In some states, the landlord is obliged to return your initial deposit minus the days without a tenant as a holding fee. While in other states, you cannot take your initial deposit back. So, remember to check with your state law before doing anything.

One of the initial deposit’s purposes is to convince the landlord not to rent to other tenants and while you make up your mind. Now, if you take back the deposit, what will take care of the few days of no business for the unit because you were making up your mind?

Edited on: Thursday, March 7th, 2013 12:50 am

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