Thank you; a holding deposit is generally not refundable; however, a security deposit, which can not be more than 2 month's rent (Section 250.511a. No landlord may require a sum in excess of two months’ rent to be deposited in escrow for the payment of damages to the leasehold premises and/or default in rent thereof during the first year of any lease.) would be refundable because there would be nothing to hold the deposit for (as the security deposit is to help protect the landlord against property damage during the lease).
A lease can be oral, or written but in order for there to be an effective lease, there needs to be an offer, acceptance, meeting of the mind (agreement) and consideration (a promise).
Generally in landlord/tenant situations, any ambiguities will be construed against the landlord, particularly if it is a corporate landlord, since the court will expect them to be aware of issues that arise due to oral leases. Also, the party alleging there was in fact a lease (the landlord) has the burden of proof to establish there was in fact a contract (lease); so if it is ambiguous, it will be decided against the landlord.
The plaintiff/ consumer can bring a recovery action in small claims court: https://www.pabar.org/clips/bringingsuitBeforeDJ.pdf
One can review the application fee- if that states that a holding deposit is required and non-refundable, then that would prevail; but absent that, the landlord would have the burden of proving the existence of a contract that justified retaining the deposit.
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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.