Is The Deposit Refundable?

There are some things in life that are just a given - things that we just accept that will happen, whether we like them or not. Taxes are a great example. Every year, we pay them diligently while we often grumble that the government is taking too big of a bite.

Another lesson learned in the "things to expect in life" category would be that if you reserve something with a deposit - that deposit is probably not refundable if you change your mind. The idea that a company will take your money, even if no services are rendered simply baffles many people.

When we recently read an article about an Arizona family wanting their deposit back that they paid to reserve a space for their elderly mother at an assisted living facility. "A Valley family says they need help getting a cash deposit back from an assisted-living facility so they contacted 3 On Your Side for help" the article begins.

This is an emotional issue for sure, and having to put any parent or loved one into an assisted living or care environment can be one of life's biggest emotional challenges. As we all know, during times of stress or heightened emotion, we don't always think clearly, or take the time to ask the proper questions, to read the fine print, or to ask for something in writing.

Unfortunately and very sadly for this family, their mother died before being able to move in, and after they paid the deposit. Now the family wants their $500 deposit back. The facility said that the deposit would hold the room for 2 weeks, and a week into that period, the unexpected and unimaginable happened with the mother's passing.

A family member was quoted as saying ""They should have told us up front that it was non-refundable and I think we would have certainly questioned that and said, 'Well, what if for some reason she can't occupy?'"

The owner of the assisted living facility went on to say that Ross and his family knew the deposit was non-refundable.

Our Take:

What exactly is a deposit? One definition we found says that a deposit is "a payment given as a guarantee that an obligation will be met." The facility in question had an obligation to hold the room for the 2 weeks. By holding this room, however, they may have passed on another potential resident moving in, and thus lose money by keeping the room vacant in hopes that the resident who paid the deposit will move in. This is exactly why they would go through the trouble to collect a deposit - to protect themselves from loss. The family did not keep their obligation to occupy the room

A person paying a security deposit for an apartment who breaks their lease will most certainly lose most of, if not all of that deposit - because an obligation was not met.

We feel that it is the responsibility of any person, facility, or any other company who collects a deposit to, in writing, make very clear whether the deposit is refundable or not refundable. We also feel that it is the equal reasonability of the person paying the deposit to ask the appropriate questions about the deposit, and to get in writing the terms and conditions of the deposit, signed by the owner or manager of the company or facility in question. Simply taking someone's word for it is not sufficient, and will most certainly lead to conflict and misunderstandings.

We also feel that if the discussion as to the "refundability" of the deposit did not take place, then the assumption has to be made by the persons paying the deposit that it is not refundable, and that they will not get their money back if they change their mind or default on the agreement.

Often times, it is the knee-jerk reaction of the media and the casual observer that it is the "company" that is being "evil" and taking advantage of the consumer. It is much easier to take this view if there are emotional issues involved such as the one described above. However, for any company to be successful, they must take certain measures to make sure that they don't incur unnecessary losses. We believe that this is absolutely reasonable, but that it must be done within the boundaries of the law, and it also, for the sake of everyone involved, must be in writing, and agreed to by both parties...signed and dated.

- by the staff at Assisted Living Directory