A.D. Cantelmo Property Management
Our Business is Property Management in Orange County California
Holding
a property for a Tenant
Often when a Landlord and a
potential Tenant, comes to an agreement to rent a property, it may take a month
or so before the Tenant can move in. Often a Tenant needs to give a 30 day notice
where they are living. If a Landlord feels that this will be a good Tenant,
they may decide to wait, but in order to hold the property, they ask for the
security deposit to hold the property until the Tenant moves in.
Security Deposit
There is a misconception that some
Landlords have that if that Tenant changes their mind during the period between
the time the deal is made and the time the Tenant moves in, they will be able
to keep the security deposit they collected. Not true!
A security deposit is collected to
cover the Landlord in the case of a Tenant not taking care of the home and
leaving the property in need of repair, leaving the property dirty, or owing
the Landlord money. It is not security for the Landlord if the Tenant decides
not to move in the property.
Holding Deposit
If the Landlord wants to be
protected for holding the property, they need to collect a “Holding Deposit”.When you write up the agreement with the new Tenant, you need to specify that
if you are going to hold the property for a period of time, you are collecting
a Holding deposit. The holding deposit will allow the Landlord to keep some or
all of the proceeds collected depending on the costs that the Landlord incurs.
You need to be specific in the agreement so the Tenant understands that if they
decide to not to move in, they will be responsible for those costs. If the Landlord rents the property to someone
else during the holding period, then the Landlord must return the holding
deposit and may also be responsible for the Tenants cost that they have incurred.
What usually happens with the
holding deposit is that when the Tenant does move into the property, the
holding deposit turns into the security deposit. The most important thing to
remember is to make sure that the Tenant understands the difference between the
security deposit and the holding deposit and the Landlord must be specific in
the agreement.
A.D. Cantelmo Property
Management Specializes in Property Management in Orange County
Ca.