Application has liquidation damage clause

[orcatwin]

My son signed an "Application to Rent" agreement that has a paragraph stating that "I agree to lease the unit on the terms specified in the lease agreement, and agree that in the event I am accepted, and change my mind and do not move into the premises or stop payment on my deposit check, the sum of one months rent will be due as liquidated damages since other prospective tenants will have been turned away....." This clause was disregarded by my son since he had not signed or seen the lease agreement and felt it did not apply.

The application was submitted on 8/21 and he was approved on 8/24 when his circumstances changed and notified the landlord that he will not be able to take possession of the property on 8/28. The Landlord has kept his deposit and is demanding my son pay the balance of one months rent.

Does he have a valid argument since he did not know the contents of the lease agreement. Is it common practice to put this type of clause in the application? Any feedback would be appreciated.

Thank you,

 

[Gail_in_Georgia]

Was the lease agreement to be in writing or an oral contract? Was the deposit your son provided a security deposit or a "holding fee"? Did your son agree to take the rental unit (the fact that he provided a security deposit would imply this)?

These issues tend to come up frequently; someone is approved for a rental, no lease is signed yet the unit is removed from the market and then the tenant changes their mind (for whatever reason) regarding renting the property. The landlord is then back to square one. To address this, many landlords call the security deposit a "holding fee".

With no lease, a tenant would be considered to have a "tenancy at will" or be a month to month renter. Such tenancies can be typically be terminated with a 30 day notice.

Gail