Ifa tenant has given first month’s rent and a deposit but then decide they no longer want the rental, amI required to return their money if the lease hasn’t yet been signed?

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Ifa tenant has given first month’s rent and a deposit but then decide they no longer want the rental, amI required to return their money if the lease hasn’t yet been signed?

Asked on August 15, 2011 Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If there was no lease at the time, the rental was month-to-month. (All oral agreements, or when there is not a written lease, are month-to-month rentals.) Therefore, the tenant must provide 30 days notice to terminate his or her tenancy. What this means for you is that you may keep one month's rent if they change their mind after orally or verbally agreeing to rent. You may only keep the security deposit (1) to pay for damage the tenant did to the premises; or (2) if the tenant doesn't pay the rent owed, you may apply the security deposit to that one month rent owed during the notice period. So assuming the tenant did not damage the place, you can keep his first month's rent, but not his security deposit, too.


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