Topic: 3 CANCELLATIONS IN 14 DAYS???

I have been under new ownership for 2 months now. They have an online application that, I assumed, covered things like 1. Non-refundable application fee; 2. Refund of security deposits; 3. A few other important points.

I realized yesterday, it doesn't. There's no criteria on it, either.

I have had 3 cancellations after paying their security deposit and they all expect to get it back. Reason #1, they didn't read or sign anything that said it was non-refundable and will be applied to their account at move-in.

I'm calling the Magistrate this morning to get his take on this, since we are a state that recognizes verbal agreements.

There is also the issue with 1 of these applicants that paid more than the standard deposit because of credit issues.

I don't think we should keep more than the standard amount and refund the rest.

This is now 4 apartments I have had to re-lease in the past month. I had another applicant move in and back out in 10 days.

That's a lot of extra work for nothing.

Any suggestions? I'm incorporating a holding fee agreement immediately for them to sign when they give me their deposit.

Know anyone looking for an apartment? I have 2 available, AGAIN!!!

Obviously, review the online documents and make suggestions of what needs to corrected.I think taking the interim step of having them sign an addendum when you receive payment for the deposit is a good stepping stone, but do they have the option of paying the deposit online and bypassing the written document? You may most likely have to eat the cost of the refunds that folks are demanding now, but you can avoid paying out again in the future.

The bigger question (for me, anyway) is why so many cancellations? Are you losing them to competition? Is the screening process not going quickly enough? Are they not qualified?

One cancelled because she is having a troubled pregnancy and has to cut back her hours. They didn't feel they could afford the apartment after that.

The second one said they had a death in the family. Not sure about that one. They had the power turned on in their name and were on their way to pay rent and get keys.

The third was separating from their spouse and I think had cold feet.

Truth or lies? Not sure!

Sounds like just a run of bad luck. Would any of them been willing to "postpone" their application (deposit stays on file, re-verify information before move-in... kind of waitlisting them)?

How much is the holding deposit? Is it low enough to be affordable for your market, but high enough to hurt if they have to forfeit?

I find this concept troubling. Is this about taking care of the customer (the resident) or taking care of yourself/the owner of the apartment? If you need to "trap" people or take their money because you want it (versus giving them a great place to call "home"), well, that is kind of sad. And, to the extent that you had the proper things in place and they came to you with the same stories of wanting to back out (death in family, troubled pregnancy/hours cut, going through a separation) and you would either hold them legally to whatever you made them sign, or take their money in clearly what is a troubling time for them, well, maybe your company is not such a great place to work......not being generous to humans who fall on these type of hard times is heartless. So, I would hope that you are just feeling some pressure here, looking for a place to vent, and that your owner is not some heartless person running a "Potterville" apartment building.

Robert,

If we didn't hold people to legally binding documents, we - as an industry, not just an individual property - would all be out of business. Not to mention the fair housing implications if we were not to set standards and hold all residents/applicants equally accountable.

I'm going to go out on a limb here and suggest that perhaps you do not work in the industry?

Robert,

Keeping the deposits says nothing about the person or company other than they try their best to cover expenses incurred.

Backing out from a signed contract should always have penalties. Would-be renters never understand the costs associated with vacant apartments, and always feel that it is their right to back out at the last minute and get all deposits fully refunded.

I am in this business, and have been subjected to similar dealings in the past. No excuse is good enough to warrant a refund of a deposit. Period.

I hope this issue has been resolved, but wanted to share my simple idea on a possible solution to this topic. I know laws vary a bit state-to-state so I think contacting your Magistrate is the best idea, for options. Question, does your approval letter/welcome letter contain any information about cancelations? I am a firm believer in keeping things simple, but I added our cancellation verbiage to our welcome letter and recommend that our leasing agents send this to the future residents right away. After all, communication is one of our very best tools.
Our new online application did not have this policy either, but it did mention that they "agreed to our terms and conditions". So, that saved refunding those fees. But, isn't it all about how they feel and perceive things? As our Reputation Manager, I tend to care about those things. :)

Reporting live from Memphis, Jeremy L.

We are in the process of changing the information in Appfolio to reflect the non-refundable deposit that is due upon approval of the application.

Two of the 3 applicants already signed their leases. One canceled the day she was supposed to sign.

We kept $200 of the deposit from the 2 applicants who had signed leases. We returned the one who didn't because she applied online and there was no statement about default.

I lost a month's rent on 2 units because of this. First time in 3 years. For a small community of 47 units, that hurt.

Any adult should understand that breaking promises is not OK. I value my customers enough that they can always count on me to keep my promises, but my respect will wane if not returned.

We, as owners and property managers, cannot properly provide for the needs of our customers without income. So we have to collect fees, rent, and deposits, in order to provide heat, light, maintenance, etc. It's not a matter of generosity, it's a matter of necessary expenses.

Personally, I love helping those in need and spend the majority of my free time volunteering. But providing for the needy is not a duty of landlords. People going through troubling times are better served by a social service agency.

We don't "make" customers sign anything; but in order to provide a safe and habitable home for all of our neighbors, we can only house those that express their choice to live in our community by signing an agreement to do so.

We don't make people sign a legally binding contract to try and trap them. I collect an application fee so I can pay a screening company to make sure the applicant will be a suitable member of my community. The fee is not refundable because if someone chooses to apply despite not meeting (or reading) the criteria, that is their own choice. I staple a copy of our rental requirements on top of every application so it cannot be ignored. Deposits are 100% refundable. It is up to the resident. If they keep their promises, they can get every penny back.

In most states; landlords are required by law to treat all customers exactly the same, and hold all of them to the same level of accountability. We cannot make exceptions of generosity for those with the best sad stories without violating fair housing laws.