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I receive e-mails everyday from folks about questions to renting out rooms.  Questions range from what to do in a given circumstance or how should I go about doing such and such.  These are all good questions and I respond to each and every one of them.

I want to share one e-mail I received from CM concerning the security deposit.  Her e-mail reads as follows:

Hi Mike I posted a roommate on the 1st of this month. He put $100 deposit
and then on the 9th he calls me after he said to take it off the site and
that he wanted it. I had 3 responses that day,but he gave me the money
first and he seemed nice, so i did. Now he wants the deposit back and now i
had to repost my room, no luck so far. What am i to do?

My response to her e-mail was as follows:

Thanks for reaching out, I've been in the situation where I've received
multiple responses on the same day.

I don't know exactly the order your event occurred, but as soon as I had
the deposit in hand, I would have taken down the post because he's locked
in and really wants the place.

In my experience if someone is willing to commit money as deposit(I would
do deposit and 1st month rent) they're showing an sincere interest.

The other replies you received could have been casual inquiries that may
not have panned out to actual roommates.

It's too bad you had to give back the deposit and repost your room - going
back a step when you were a just a mere step from securing a roommate.

She responded with the following e-mail:

But i haven't given him the money back yet. I spent it
thinking he was moving in. Now he wants it back..Would u give it back or

I followed with:

Tell him the room is still available for him to move in, if doesn't want
to move in, then you'll have to give the $100 back. To be frank, that
security deposit wasn't suppose to be spent.

CM and I went back and forth a bit more, arguing what happens with the security deposit.  Nevertheless, she’s standing by her actions because she called several apartment complexes and stated that apartment complexes don’t refund the deposit if the person backs out after 9 day of securing the place.  That’s a pretty weak argument for keeping the deposit.  In reality, the deposit should never be spent.

A lot of people verbally commit to something, but once money gets involved, people tend back out.  Think about it, when your friends ask you if you want to go to such and such concert, you say “Okay, I’m in, sounds fun.”

When it comes to putting down money, you begin to think twice.

That’s what the deposit is for.  It’s simply earnest money to show sincere interest.

Now, I’m not sure why this guy wanted his security deposit back, the best I can infer was that CM didn’t take down her advertisement and the guy thought the room wasn’t secured even with a good faith deposit.

I’m all about being fair, if I had a person secure my room, I would take down the advertisement.  There’s no reason to keep it up there any longer.  Additionally, the three inquiries may not have panned out to actual roommates.

That’s an e-mail I wanted to share with everyone.


One of my roommates is moving out at the end of the month.  I’ll be on the search for a new roommate.  The places I’m going to advertise are:

  • roommates.com(yes, I paid for 2 month subscription at $19.99 to view profile details)
  • craigslist.org

I wrote about why I don’t have friend or co-workers as roommates when I’m a live-in landlord.  If I find a new roommate, this will be the 12th different roommate that has moved in.

  • Linda January 20, 2013, 8:52 pm

    I completely agree, Mike. A security deposit is always to be held aside and should be refunded in full when the rental agreement is terminated, unless there are substantiated damages that need covering (and not normal wear and tear, either). I put the security deposits received from my roommates in a separate account and refunded them (with the interest earned…such as it was) when they moved out.

  • kathryn February 28, 2013, 8:29 pm

    My husband and I are landlords, and it will depend on your residential tenancy rules for your area.
    For us, as soon as we accept a security deposit, there is a legal binding contract.if they decide not to move in, and it happens for a variety of reasons, we start advertising the vacancy again.
    As soon as we have rerented the unit, we deduct any advertising costs, permitting costs allowed for subleasing (even if they are starting a new lease) and any days the unit is vacant where the tenant should have moved in.
    If there is anything left, we return it. If you have a certain amount of days to lodge a security deposit claim form, make sure you do it.This time period would start after a new tenant is found.
    As others have said, this SD money is always to be kept separate, and not for your perosnal use.


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