Would property management be entitled to entire holding deposit in California upon retracting intent to move?

Question

My wife and I signed a document stating the $300 deposit would be applied to the Security Deposit upon approval, and would be considered 'non-refundable'. We did not sign a lease after receiving approval late on a Monday, and we then informed them we are no longer interested on a Wednesday afternoon, at which point they stated we would receive no portion of the deposit back.

California Civil Code Section 1950.5 - According to this state law:

There is no such thing as a “nonrefundable” security deposit. No matter what it’s called all money you pay in addition to your first month’s rent is refundable.

The document we signed did not contain verbiage for 'reasonable daily market value', and I feel they should list reasonable costs for deductions.

The good thing is, this was made out by check and I put stop payment on it, but I want to know how things would stack up if they decide to go to small claims. I honestly feel that 3 business days reasonable to allow rescinding w/o penalty.

Answer 1

Simply is not true, please again refer to the civil code 1950.5, no matter what it is called a "holding deposit", "holding fee" it is all refundable and  is all considered a deposit in the eyes of the law. However, there may be deductions for lost rent or advertsing  or whatever. Big red flag if you run across someone that uses the term nonrefundable. Please take to small claims to regain unfair monies lost  and to teach the jerk a lesson. It is nothing but theft.  I am a landlord, own rentals myself and my tenants stay a long time because I am fair. But I heard recently this just happened to some hard working young students, they were told one thing, paid the "nonrefundable deposit" and given a lease with very different terms than discussed. Gives all landlords a bad name.