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CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10221
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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Is there anything in the first paragraph of this section of

Customer Question

Is there anything in the first paragraph of this section of my rental application that does not conform in any way to Colorado law? I did download it from a website of Colorado legal documents. If, after filling out the rest of this application and giving me the deposit, someone sends me a note saying that they have found a place that they prefer and will be renting that, can I legally keep the deposit. I had already informed other applicants that the unit was rented and pulled the advertisements for rental.
I, hereby agree to lease from Jane Doe, known as the Landlord, the above premises. As an indication of my good faith in making this offer, I hereby hand the Landlord the sum of $1200 (Twelve hundred dollars) in the form of certified check, cash or money order as a rental deposit on the premises on the understanding that if my offer is accepted, the deposit shall be retained by the Landlord as a Damage Deposit, in accordance with the provisions of the Lease Agreement, and if my offer is not accepted, the full Deposit will be refunded to me. However, if my offer is accepted and I cancel the application or fail to execute the Lease Agreement, when prepared and presented, then I agree that the said deposit shall be absolutely forfeited to the Landlord. This shall be considered liquidated damages and not a penalty. Acceptance of this offer will be deemed to have been made by the Landlord's execution of the acceptance section. I understand that I will need to provide the first and last month’s rent on or before the move in date.
1 No pets unless written permission given by the Landlord, pets brought onto the premises without written consent will immediately be just cause for lease termination.
2 All utilities are the tenants responsibility unless stated otherwise in the lease agreement. Utilities must be in the tenants name on or before occupancy date.
3 The premises is NON SMOKING. Smoking inside premises will immediately be cause for lease termination.
All statements that I have made in this application are true. I authorize the landlord to do a credit check and criminal background check. By signing this application ALL personal information is consensually given for use by us or o
Submitted: 4 months ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 4 months ago.

Dear Customer,

Thank you for using our forum. My name is ***** ***** I hope to assist you today.

While the holding deposit clause is not uncommon, the scope of the liquidated damages is likely going to be considered excessive (Courts dislike liquidated damages in all contracts, not just landlord/tenant damages where they are particularly protective, rather they prefer damages to be assessed at a rate that more closely approximates the injured party's actual damages following the other party's breach of contract).

  • Holding Deposits Some landlords may require a “holding deposit” from prospective tenants to show that the tenant is seriously interested in renting the apartment. Make sure that you clearly understand any terms and conditions associated with any holding deposits or fees. Generally, an owner who has taken an apartment off the market and held it for you based on your promise to rent (presumably turning away other applicants), can deduct reasonable amounts from a holding deposit to cover costs of keeping the apartment vacant (usually in the form of a daily rental charge) or costs associated with advertising.
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Customer: replied 4 months ago.
are you saying that even though a tenant signs this paragraph saying that they will forfeit the deposit if they change their mind they can actually demand it back and if it were to go to court they would win?
Expert:  CalAttorney2 replied 4 months ago.

The court may find that the damages clause is excessive (the amount exceeds the actual scope of the landlord's reasonable expected damages), and the amount would be subsequently reduced.

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