When you fill out an application to rent an apartment, you will be asked to pay an application fee and a deposit. In most cases the deposit is an amount equaling one month rent.
If your application is approved and you sign the lease for the apartment, your deposit will be applied either to the security deposit or to the payment of rent.
If your application is not approved, this deposit will be refunded to you. The application fee, however, will not.
If your application is approved but you decide that you no longer want to rent this apartment, this deposit may be non-refundable or you may have a very hard time recovering the funds. That is why it is important for you to read the small print of the application carefully for any statement regarding the deposit being non-refundable. Also make sure that you have a copy of the application that you have signed.
Some states have a so-called "right of rescission" rule, according to which you have three business days to cancel the transaction and get the money back. In Pennsylvania, this rule does not apply to applications for residential leases.
Many students have brought to our attention situations in which they had either lost the deposit given to take the property off the market or had a very hard time recovering it.
We brought these situations to the attention of Jon Sirlin, attorney with the law firm Sirlin, Gallogly & Lesser, P.C. in Philadelphia, and are providing his answer below:
A student put a one-month deposit down for an apartment. The student changed his/her mind about renting the apartment within 24 hours; within 3 business days; after the student was given a copy of the Lease, which the student found unfair. The application says that the deposit is nonrefundable. Does the student have any chance of getting all/part of the deposit back? Is the law giving the student any protection?
Answer: "This question is definitely a fact sensitive one, to which I will try to provide a brief but comprehensive response. There is no specific statute which gives the Tenant a certain period of time to change his or her mind to obtain a refund of the deposit. The issue is one of contract, which (as a first year law student can attest) requires some "consideration" (e.g., something of value) to pass between the parties. A court might be persuaded to follow the plain language of the application and to find the deposit to be nonrefundable. However, the better view would be to determine whether the Landlord "gave" anything to the prospective Tenant in exchange for the "deposit". In my opinion, it would be unlikely that the Landlord "gave" anything to the Tenant unless it actually gave the Tenant a lease or specifically took the apartment off the market. Even in those cases, the Landlord should not be able to keep the deposit if it has not actually suffered a loss. My general answer is that in most cases, in the absence of a signed lease, the Landlord should not be permitted to retain a deposit if the Tenant cancels."(Jon Sirlin).