Is a rental application a binding contract?

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Is a rental application a binding contract?

I gave a lady an application and a deposit however I found a bigger house for less money. The lady says that she doesn’t have to give me my money back because the rental applidation is a binding contract.

Asked on January 2, 2012 under Real Estate Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Providing a deposit does create a binding agreement: the landlord agrees to provide the apartment or home for rent, and the renter agrees to rent it.

Rememer, a deposit is designed to hold the apartment or home. The would-be renter can recover it if it is the landlord who cancels the deal, or the deal becomes impossible for some reason. (And if the landlord canceled the deal without some mitigating circumstance, the would-be renter may be able to recover additional compensation, too.)

However, if the would-be renter tries to pull out of the deal, then the landlord may keep the deposit; the deposit encouraged the landlord to hold the rental for the renter by providing a guaranty of compensation in the event the renter tried to pull out of the deal.


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