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Old 10-30-2011, 07:03 PM
 
Location: Southern California
1,435 posts, read 679,983 times
Reputation: 243

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Does anyone know if a holding deposit is refundable in California? I put down a $200 holding deposit on a room rental and signed a rental application (not an agreement or lease). The receipt I got for the deposit does not call it a holding deposit and does not say it is non-refundable. The rental agreement did not even mention the holding deposit. I changed my mind the very next day, literally less than 20 hours later. The landlord claimed he was out $50 or more since he had to re-advertize and since he turned down three people. Our discusion got a little heated and now he is refusing to return any of it. Do I have a case if I take him to small claims court? What civil code or law pertains to this? Thanks.

-Chris

Last edited by cmforte; 10-30-2011 at 07:36 PM..
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Old 10-30-2011, 07:25 PM
 
Location: The Triad (nc)
17,595 posts, read 23,805,174 times
Reputation: 14787
Quote:
Originally Posted by cmforte View Post
I put down a $200 holding deposit on a room rental and signed a rental agreement. The receipt I got for the deposit does not call it a holding deposit and does not say it is non-refundable.
Do they call it a fee? Or use that term anywhere?
(which is what is should be and that also makes it un-refundable)

Quote:
Do I have a case if I take him to small claims court?
Almost certainly.

What civil code or law pertains to this?
No idea. Google it.
hth
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Old 10-30-2011, 07:36 PM
 
Location: Southern California
1,435 posts, read 679,983 times
Reputation: 243
Quote:
Originally Posted by cmforte
I put down a $200 holding deposit on a room rental and signed a rental agreement. The receipt I got for the deposit does not call it a holding deposit and does not say it is non-refundable.

Quote:
Do they call it a fee? Or use that term anywhere?
(which is what is should be and that also makes it un-refundable)


Quote:
Do I have a case if I take him to small claims court?
Almost certainly.

What civil code or law pertains to this?
No idea. Google it.
hth
It was not called a fee. On the receipt it was called simply a "deposit." And the rental application (not an actual rental agreement/lease) does not even mention it.

I have Googled CA laws/codes pertaining to holding deposits.. Can not find one.

Thanks though.
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Old 10-30-2011, 09:05 PM
 
4,919 posts, read 10,661,719 times
Reputation: 5788
The LL can keep the holding deposit for any amount they incurred to rerent the place if it says refundable. If the LL said it cost $50 because you backed out, they get to keep $50. Had they rejected you, its all refundable. If its non refundable, they can keep it all. I think if it doesn;t say one way or other, it follows security deposit rules for the amount they can keep which is actual expenses.
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Old 10-31-2011, 06:15 AM
 
2,063 posts, read 3,137,642 times
Reputation: 2685
Post in my case.

I've paid a few 'holding deposits' but only when the LL 'put it in writing' that it would be applied to the first months rent. Had a few LL that refused to do that...I took that as a red flag of their good intentions towards me and I didn't rent from them.
K
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Old 11-01-2011, 02:11 AM
 
Location: The not so Wild West
966 posts, read 1,682,146 times
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I don't think the LL used correct procedure, so I think a court would award you full refund.

What we do is when someone turns in an application we require a "holding deposit" equal to the first months rent. This separates out the looky loos. If you want the unit you need to put some skin in the game, otherwise we aren't going to waste our time clearing your application.

HOWEVER and a big however, it is not called a holding deposit. It is NOT a deposit, nor a fee. In CA BTW - application fees are capped I think this year at $45? We don't charge a fee so I forget.

It is "Earnest Money" - this is a standard real estate contractual term - same as if you are buying a house. A lease is an estate in real estate for a limited period, but many of the same rules apply as to purchasing. You put some money down to ensure you finish the deal.

IF we approve the application the earnest money funds are applied to the first months rent. Note: A separate deposit is required prior tomove in along with any other fees or requirements (utilities, etc). If we deny or for some reason can't provide the unit (prior tenant won't move, whatever) we return the earnest money in full imediately.

IF we approve someone and they subsequently do not sign a lease or move in, we keep all or a reasonable portion to cover our costs and losses incurred.

The key word is "reasonable." If someone changed their mind the next day would not be the same as 10 days later after the unit was off the market, prepped for occupancy, and a whole advertising campaign had to be started again.

Print this, give it to the LL, suggest he learn the law. Ask for your money back or go file a SC case.
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Old 11-02-2011, 10:46 AM
 
15,704 posts, read 21,088,727 times
Reputation: 6728
I believe you have a chance since we clearly have in writing that until moving in the security deposit is not refundable....but than again if the judge is not siding with you than you will lose the filing fees that might be higher, so weigh your gain and loss and decide than....
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Old 11-08-2011, 09:11 PM
 
Location: Southern California
1,435 posts, read 679,983 times
Reputation: 243
Quote:
Originally Posted by jamies View Post
I don't think the LL used correct procedure, so I think a court would award you full refund.

What we do is when someone turns in an application we require a "holding deposit" equal to the first months rent. This separates out the looky loos. If you want the unit you need to put some skin in the game, otherwise we aren't going to waste our time clearing your application.

HOWEVER and a big however, it is not called a holding deposit. It is NOT a deposit, nor a fee. In CA BTW - application fees are capped I think this year at $45? We don't charge a fee so I forget.

It is "Earnest Money" - this is a standard real estate contractual term - same as if you are buying a house. A lease is an estate in real estate for a limited period, but many of the same rules apply as to purchasing. You put some money down to ensure you finish the deal.

IF we approve the application the earnest money funds are applied to the first months rent. Note: A separate deposit is required prior tomove in along with any other fees or requirements (utilities, etc). If we deny or for some reason can't provide the unit (prior tenant won't move, whatever) we return the earnest money in full imediately.

IF we approve someone and they subsequently do not sign a lease or move in, we keep all or a reasonable portion to cover our costs and losses incurred.

The key word is "reasonable." If someone changed their mind the next day would not be the same as 10 days later after the unit was off the market, prepped for occupancy, and a whole advertising campaign had to be started again.

Print this, give it to the LL, suggest he learn the law. Ask for your money back or go file a SC case.
thank you. This LL was trying to be nice to me since I was trying to flee a tenancy situation where one of my roommates was a violent drunk (this situation changed) and so he was going to let me move in quickly and with a low deposit or "earnest money"...I'd hate to make him bitter and not want to help another person like me because of this situation. On the other hand, I could use the money back and don't want to be a push-over.

By the way, he was going to sub-let a room in his apartment to me and, wanting to help me, wasn't going to tell HIS LL about this. Again..he was trying to be nice and help me..I don't want to make him bitter.....this is something to think about....
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Old 11-08-2011, 09:15 PM
 
Location: Southern California
1,435 posts, read 679,983 times
Reputation: 243
Quote:
Originally Posted by bentlebee View Post
I believe you have a chance since we clearly have in writing that until moving in the security deposit is not refundable....but than again if the judge is not siding with you than you will lose the filing fees that might be higher, so weigh your gain and loss and decide than....
This is something to think about. Maybe this guy could counter-sue me for his "expenses" because of this and/or for his filing fees and for taking time off work to go to court? We're only talking $200....not a whole heck of a lot..but again, I don't want to be a push-over. I already told him I would sue..shouldn't I keep my word?
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Old 11-09-2011, 07:14 AM
 
Location: St Thomas, US Virgin Islands
22,478 posts, read 27,048,543 times
Reputation: 23029
Quote:
Originally Posted by cmforte View Post
I already told him I would sue..shouldn't I keep my word?
Unless you signed a document saying you were going to sue him which was notarized, filed in court and countersigned in blood then I think you can change your mind.

My advice is to eat some crow before this gets TOO nasty, go to him and apologize but explain you weren't thinking rationally and then ask him how he would feel about a compromise. Ask him if he'd settle for $75 and a handshake. $200 is simply NOT worth going to court over particularly when you say he was really trying to do you a favor.
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