Can a landlord keep my deposit if I don’t move into a commercial property?

UPDATED: Oct 29, 2010

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Can a landlord keep my deposit if I don’t move into a commercial property?

I was trying to rent a commercial property. I gave $600 towards an $800 deposit. I was not able to rent the place so I told the landlord that I couldn’t do it and needed my money back. The landlords said that she wouldn’t refund it because she lost out on others renting it. We had not signed an agreement and didn’t have a move in date but she said that her lawyer told her that could take me to court and sue me for the rest of the deposit and first months rent. Is that correct?

Asked on October 29, 2010 under Real Estate Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If there was no lease--i.e. a lease was never formed between you--then you should not be liable for any rent. Also, if there was no lease, a security deposit (money deposited to make good for any damages done by you as tenant to the property) should be returned. However, if the deposit was to hold the premises--i.e. so the landlord would not rent it to another while you were seeking financing and/or negotiating the lease--then the landlord could keep it if you were the one pulled out of the deal. The purpose of a deposit like that is to reimburse the landlord for holding the property and foregoing other opportunities in the event the prospective tenant cannot or does not rent the premises. So the landlord should be able to retain the deposit and possibly even sue you for the other $200 you should have put down for it.

The only way the landlord would be able  to try to collect  the month's rent would be by showing that you and the landlord had formed an oral or verbal month-to-month lease for  that month; this could happen, but will depend on the circumstances, discussions, etc.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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