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  1. #1
    Join Date
    Aug 2019
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    Default Are Holding Deposits Binding in California

    My question involves landlord-tenant law in the State of: California.

    We put a holding deposit down on a specific unit in a large complex after received notice that our security cleared. Today, we were notified that the current tenant wishes to renew their lease so we have to move into a less desirable unit. They told me that this is California law. I canít imagine that is true, as it totally dismisses the purpose of the holding deposit.

    I would love to be better informed before I communicate with the renting office again. Thank you in advance for any insight you can provide.

  2. #2
    Join Date
    Nov 2009
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    813

    Default Re: Are Holding Deposits Binding in California

    It sounds to me like the current tenant gave notice that they would move out then rescinded the notice, which is at the landlord’s discretion to accept or reject. It would be helpful to know what city the building is in and what terms were specified for your holding deposit.

    I’m having trouble finding California law governing holding deposits, but from what I’ve read landlords can recover a “reasonable” amount to cover costs when a potential tenant backs out. However in your case the landlord has decided effectively to rent to someone else, and probably should refund the entire deposit if you don’t want the less desirable unit. If they don’t refund the deposit you would need to sue them in small claims court.

    I might be inclined to ask management what law they are referring to. Perhaps others with more specific knowledge can comment as well.

  3. #3
    Join Date
    Mar 2013
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    17,129

    Default Re: Are Holding Deposits Binding in California

    Quote Quoting Ellensue
    View Post

    We put a holding deposit down on a specific unit in a large complex after received notice that our security cleared. Today, we were notified that the current tenant wishes to renew their lease so we have to move into a less desirable unit. They told me that this is California law. I can’t imagine that is true, as it totally dismisses the purpose of the holding deposit.

    Here's the entire California landlord tenant statute.

    http://leginfo.legislature.ca.gov/fa...er=2.&article=

    Read it. Study it. Know it.

    I don't think you'll find anything in there that allows the landlord to keep your holding deposit and offer you a less desirable unit if he can't produce the unit you paid for.

    Unfortunately, a lot depends on what you signed when you handed over the money.

    Which brings me to my advice: NEVER hand over the money or sign anything unless the unit is turnkey and ready for move in.

  4. #4
    Join Date
    Jul 2018
    Posts
    1,648

    Default Re: Are Holding Deposits Binding in California

    Quote Quoting Ellensue
    View Post
    We put a holding deposit down on a specific unit in a large complex after received notice that our security cleared.
    I'm not sure what "our security cleared" means, but what were the terms of the written agreement pursuant to which you gave the landlord this "holding deposit"?


    Quote Quoting Ellensue
    View Post
    Today, we were notified that the current tenant wishes to renew their lease so we have to move into a less desirable unit. They told me that this is California law. I can’t imagine that is true, as it totally dismisses the purpose of the holding deposit.
    This doesn't make any sense. I think what you might be saying is that you gave the deposit a "holding deposit" relating to your desire to lease a particular unit in an apartment complex. However, that unit is currently occupied, and apparently you gave your deposit before knowing whether or not the current tenant would be staying or leaving at the end of the current lease term. Correct? If so, what does "this is California law" mean?

    In other words, you're going to need to be more clear in order to get any useful information.

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