Often you run into situations when filling vacancies where you have a vacant unit, turnover is complete and now you've screened and selected a resident--but they are not available to move in immediately. You always want to avoid the situation of taking the unit off the market and holding it for this prospect who may ultimately change their mind down the road and leave you starting over now being a couple weeks of vacant days in the hole. To avoid this situation, it is a common practice for property managers to require and accept "holding deposits" which are intended to both reserve the unit for the prospective resident as well as provide some assurances to the manager should they change their mind before actually occupying the unit.
Should the prospect change their mind about moving in as agreed, the manager may keep at least some of the holding deposit to cover any losses. It is a recommended that you document the expectations with a pre-prepared form which answers questions such as, will it be applied to the first months rent?...how much of it is non-refundable?...do you as the manager have the right to back out if a better applicant comes along? It's a great tool and widely used, but clear documented communication cannot be underestimated. For more information on this topic take a look at the Department of Consumer Affairs piece on "California Tenants" (2010) http://www.dca.ca.gov/publications/landlordbook/catenant.pdf.
Should the prospect change their mind about moving in as agreed, the manager may keep at least some of the holding deposit to cover any losses. It is a recommended that you document the expectations with a pre-prepared form which answers questions such as, will it be applied to the first months rent?...how much of it is non-refundable?...do you as the manager have the right to back out if a better applicant comes along? It's a great tool and widely used, but clear documented communication cannot be underestimated. For more information on this topic take a look at the Department of Consumer Affairs piece on "California Tenants" (2010) http://www.dca.ca.gov/publications/landlordbook/catenant.pdf.
RSS Feed