What Can You Do If a Tenant Cannot Immediately Move In to Your Rental?

When an approved applicant needs a later move-in date, you have two options: take a holding deposit to reserve the unit until the lease is signed, or sign the lease now with a future start date. A holding deposit needs written terms that say how much it is, how long you will hold the unit, and when you will apply it, refund it, or keep it. Some states cap or ban it: Washington limits it to 25 percent of the first month's rent, and New York and Massachusetts do not allow a separate charge to reserve a unit. A signed lease binds both sides, so if the tenant backs out, your claim is for lost rent rather than a forfeited deposit.

Holding deposit or signed lease: which fits?

A holding deposit does not give the applicant the right to move in. Until the lease is signed and the move-in money is paid, the applicant has only the reservation the written terms describe.

What should a holding deposit agreement say?

Put the terms in writing before you take any money, and give the applicant a receipt. Cover:

1. The amount, stated in dollars, and the state limit if there is one.
2. The hold period, with an end date by which the lease must be signed and the move-in money paid.
3. The rent, deposit, and fees the tenant will owe at signing.
4. What happens if the lease is signed: the holding deposit is credited to the first month's rent or the security deposit.
5. What happens if the applicant backs out: whether you keep all of it, part of it, or only your documented costs.
6. What happens if you cannot deliver the unit on time: the full amount is refunded, with a deadline.

What do state laws say about holding deposits?

If your state is not listed, check its landlord-tenant statute and your city's rental code. If you credit a holding deposit to the security deposit, it becomes part of the deposit and counts toward your state's cap; see how much you can charge for a security deposit. For the full New York and Washington rules, see New York security deposit laws and Washington security deposit laws.

What can you keep if the applicant backs out?

With a holding deposit, the written terms decide, within state limits. In Washington and Oregon, you may keep it when the applicant fails to follow through and your written statement allows it, subject to the refund requirements above.

With a signed lease, the tenant who refuses to move in has broken the lease, and you can claim the rent you lose until a new tenant starts paying, using the security deposit first. In New York and Texas, a landlord whose tenant leaves in breach of the lease must take reasonable steps to re-rent, and a lease clause waiving that duty is void. Advertise the unit right away and keep records of each listing and showing. Example: the lease starts August 1 at $1,800, the tenant backs out on July 10, and you re-rent from September 1. Your rent loss is August's $1,800, and you can apply the tenant's deposit to it before seeking any balance.

How should you document a delayed move-in?

Put every change in writing: the new start date, the holding period, the amount paid, and either side's decision to cancel. Send it by email or text so it is dated, and keep copies with the application and receipt. If the applicant disputes what you kept, that written trail is your evidence; whether to keep a record of tenant communication covers what to save. Once the move-in date arrives, follow the move-in steps in how to help your tenant get set up.