When should a potential landlord cash a deposit check?
April 28, 2011 3:02 PM   Subscribe

We gave a check (for a security deposit) to a potential landlord to hold our spot in line. The landlord wasn't going to cash the check until she approved us for the house. We got the house (pending a signed lease agreement). When should the landlord cash the deposit check?

She wants to cash the check before even giving us the lease agreement to read. I, of course, want to read and agree to the lease agreement before seeing the check cashed. Is it normal to cash a deposit check before agreeing to a lease or is my instinct correct that we should hold off on cashing the check until we both agree to the terms of the lease?

We really want this house and don't want to spoil things by making a big deal of this unless the landlord is doing something really out of the ordinary. I've been out of the rental market for some time now and appreciate any help.
posted by jz to Law & Government (6 answers total)
As a datapoint in NYC I gave my broker the deposit and first months rent the night I read and signed my lease. However, I doubt there are hard and fast rules.

I'd just hesitate letting her deposit the check without any agreement at all because what if she backs out before giving you the lease or something. She'll likely give you your money back but you have nothing in writing to back that up.
posted by jourman2 at 3:05 PM on April 28, 2011

I've never seen anyone hand over a deposit before reading and signing the lease here in Western, NY. 4 different places and its always the same, Sign lease > give landlord security deposit and first months rent > receive key on moving day. So, I agree with jourman2 that its weird for a landlord to want to cash the check before signing the lease. Definitely push back but be polite about it and make sure you read over the whole lease before signing (really can't stress this enough).
posted by Sgt.Grumbless at 3:11 PM on April 28, 2011

I've rented apartments and houses over the years in several different states. Deposits were NEVER handed over to be cashed until I had time to read the lease and sign it. Don't do it. Would you give a car dealership money before agreeing and signing financial arrangements with them that will impact you for the next 5 years? No.

Note: I have given a landlord a check in advance of renting a place with a clear understanding that it would only be cashed AFTER I read and signed the lease.
posted by HeyAllie at 3:21 PM on April 28, 2011

Speaking as a (casual) landlord, I'd cash it after the lease is signed but not before. Among other things, the lease probably includes mandatory penalties for bouncing checks.
posted by rmd1023 at 3:30 PM on April 28, 2011

If you've given her the check, there's not much you can do. If she said she wouldn't cash the check until she approved you for the house and she has now approved you for the house, I would expect it to be cashed.
posted by ActingTheGoat at 4:15 PM on April 28, 2011

Yes. This is out of the ordinary!

Check your jurisdiction, for it may also be illegal.

- Wondering what you have in writing with this person?

- Wondering when you'll be signing the lease? Why does she need the money so quickly??

In general, it's a bad sign she needs your money asap. Does she have a liquid budget for necessary and expensive repairs that will be hers to pay if something major breaks - like a hot water heater or roof leak? I assume you can see how this would be bad news for you as a renter if your landlord is cash poor.

Proceed with caution. This may be nothing (just result of inexperience??) but it could be a red flag.

First month's rent should be money order or certified check, btw.

Good luck sorting this out.
posted by jbenben at 5:07 PM on April 28, 2011

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