A property manager receives a rental application with a holding deposit. If the application is successful but the applicant withdraws before signing the lease, what typically happens to the holding deposit?
Correct Answer
A) The landlord may keep the deposit, as the approved applicant withdrew.
When an applicant's rental application is successful but they withdraw before signing the lease, the holding deposit is typically retained by the landlord as compensation for lost opportunity and costs. This is because the applicant has breached their commitment after being selected as the successful tenant.
Why This Is the Correct Answer
A holding deposit secures the property while the applicant decides. If the applicant is approved and then decides not to go ahead, the landlord may generally keep it for the time the property was held off the market.
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