Consumer Protection Law
Consumer Protection Law Questions? Ask a Lawyer Now.
I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear about your situation.
A holding deposit is money paid by a tenant to the landlord not to rent the property to anyone else. When the tenant signs a lease, yes, that money is usually converted to a security deposit. However, if the tenant cancels for any reason, a holding deposit is forfeited as long as the landlord did not rent the property to anyone else. He's legally not required to return any of it. Even leaving it on Craigslist wouldn't mean he had to return the money, because he fulfilled his end of the bargain by not renting the place to anyone else.
You would have a stronger claim to that money if it was a security deposit, because you never signed the lease. The problem here is that there was no meeting of the minds. He didn't tell you about essential clauses that he was going to put into the lease, and which are not so standard that you should've expected to know to ask about them. If he's refusing to negotiate terms of the lease that he didn't tell you about, then the entire agreement fails, and he has no claim to keep any of the money you gave him. But that argument would support you much more strongly if you don't have anything in writing that calls that money a holding deposit.