Case study: Rent deposit refund
“Good day
If you advertise your rental place online and someone pays a deposit saying that they’ll pay rent the following week when they are moving in but when the following week comes they get to the place and decide they don’t like it… ‘it’s smaller than imagined’ she says. Or they don’t like the neighborhood.
Are they entitled to the portion of their deposit back? Or should I hold them accountable for the one month’s rent as they have entered into a month-to-month agreement when they paid the deposit?”
Mc Naught and Co says:
When you pay a deposit for something it is a commitment to paying the whole amount and is intended to show good faith that you are indeed making the commitment or entering into a contract, whether it be to lease the premises or buy something. If you later change your mind, you have broken your contract and can be held accountable for it, and for the rental.
The only relief possible is if the landlord relets the property, or in the case of a sale, again sells the goods. In this case they have lost nothing (except perhaps re-asvertising expenses) and would then need to refund the deposit (less the extra expenses).
It is also preferable, when taking a deposit, to simultaneously send a written contract to the tenant asking that it be signed and returned. This then sets out all of the terms of the lease and the tenant’s commitment.
