“A Holding Deposit” Means H-O-L-D-I-N-G A Deposit

By: Wojciech Kic

There are many parallels between the worlds of sports, business, and politics. For
one, winning IS everything. Coming in second or third just ain’t worth it. The coaches, executives, and political consultants with different winning formulas are searched for all over the world. Once hired, to some CEOs it is all about the raw talent and they become famous for shaping that talent into a winning score.To others it is all about teamwork, the proverbial 12th man. Yet some others believe that winning simply means making fewer mistakes than the opposing team. Still, even the most winning leaders lose sometimes.

For an aspiring entrant into any competitive field having an opponent with a seasoned leader is intimidating enough. A leader with a winning resume alone is downright devastating.We are not going to try, opponents think.Thus, many a game is won deceptively through intimidation before it even begins.

As in sports, in business literature winning is often attributed to specific supernatural like characteristics. Mythological tenacity, brute strength, piercing looks, broad shoulders is what it takes to win. No mere mortal should delude himself into attempting to obtain these superhero qualities in a single lifetime. Yet, casual reviews with successful leaders reveal that this magic can be attributed to winning individuals only after reaching success. “Is that what it is called” quips the winner, “I did not know.” But looking back,
to when the game began no wizard had the ending right.

For those in the landlording business winning means securing a tenant for his property. There are many different formulas for attracting a tenant.The essence of many is a clean and market ready property.Those whose property is not market ready make promises to the tenants that they cannot deliver; others accept ten ant’s promises to complete the repairs for a slight reduction in rent that is always smaller than the ultimate cost of the maintenance. An alternative criterion may involve obtaining a tenant at a rent level that fairly reflects a condition of the property. An opposing effort includes pricing a property so high that even a seeming rent reduction still reveals an attempt to beat the market.

Intimidating a prospect into a lease is a skill many landlords take pride in.The ability to sell the Brooklyn Bridge is a skill many attempt to emulate. But while landlords believe that tenants innocently submit to the process as the cost of obtaining housing, landlords overlook the fact that they may engage an active opponent.

The process is not always so transparent. Many tenants bore with coy landlords and walk away without a fight in search of a better landlord. Other tenants, short on time, take what they can to fulfill the temporary need. But tenants with more time to play openly engage the landlord, by paying a so called “holding deposit.”

Holding deposits are very satisfying to most landlords.With the deposit in hand, landlord’s conclude the leasing process . . . it is time to pull out the “for lease” sign and smell the roses . . . and let these pesky late callers know with abundant confidence . . . “The property is now leased” . . . “You were late” . . . “Yes, I am holding a deposit” . . . the preparation, perseverance and landlording talent finally paid off . . . “TD”. . .”It is finally over.”

But after waiting a week or so, with the tenant’s deposit for the tenant to sign the lease the landlord is slowly growing uneasy. The tenant called several times, to indicate that she was coming to sign the lease, but every time something got in the way. The lease
is not signed yet and the landlord is perplexed. Finally, the landlord, desperate and confused, issues a sure to be winning ultimatum. Ms. Tenant, if you do not sign the lease by tomorrow I am keeping the deposit!

The landlord is slow in getting the message.The tenant will not show up tomorrow. The bitter landlord keeps the deposit and discouragingly places the “for lease” sign back on the property the following day. In no time, however, the landlord gets a demand letter from the tenant requesting a deposit refund adding the insult to the injury!

But the loss of effort by the landlord occurred way earlier. It happened, when the prospect handed the deposit to the landlord and called it a “holding” deposit.The acceptance of the deposit prompted the landlord to celebrate, thinking that the property is leased.The prospective tenant’s take on the landlord was correct. Playing with a loser ain’t worth it.

For landlords there is a cure; do not accept “holding” deposits. Instead, schedule an appointment to sign the lease and accept the deposit at a specific time. Anything different means just what it says: h-o-l-d-i-n-g a deposit.

In the world of winning there is no easier road to defeat than early celebration. Early celebration means the acceptance of a loss; it is the last attempt to salvage satisfaction from the soon to be over, already sensed, losing effort. But knowing when the game begins and ends helps the winners to concede victory less. Prompting the opponent into stopping play is what it takes to win.

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