Security deposit as rental application deposit

Question

I'm considering renting a particular apartment in the Pittsburgh area and the landlord is asking for the security deposit of one month's rent to be submitted along with the rental application, before giving me a lease to sign. (There is no rental agency involved here, the landlord/owner is managing the rental directly.) Is this actually a common practice? Or is it at all likely to be a scam? I am from elsewhere in the US and have not encountered this before.

How can I protect myself from potential scams or headaches trying to recover my deposit if my application is not accepted? There is no language in the rental application describing the terms under which the security deposit would be returned. Would it be better to suggest to the landlord what I would consider to be a more normal scheme of paying a nonrefundable application fee (not deposit), then paying the security deposit and first month's rent when I sign the lease?

Added in response to comments: Everything up to this point seemed perfectly normal: I was shown around the apartment; a lot of improvements (painting, new tiles, etc.) were apparently in progress, although there was no work being done during my visit, presumably because it occurred on a weekend.

Answer 1

This should perhaps be obvious, but handing someone money without any sort of contract or agreement in place to govern the exchange is foolish. It sounds like that's what he's asking you to do - give him a security deposit and month's rent for a rental agreement that doesn't exist (yet).

If you don't have a lease contract in your hand, there's nothing to pay rent for, and nothing to secure with a deposit. Paying an application fee is common in some areas, although in those cases the application itself (which you fill out when paying the fee) describes what happens to that fee (i.e. it applies towards first month's rent if your application is accepted, if it's refundable or not, etc.).

If you want to give this landlord the benefit of the doubt and assume he's legitimate, you should explain to him that you won't be giving him a security deposit or first month's rent until such time as you're signing a lease or rental contract which describes the terms of how that money is managed. Or, at the very least, until he presents a rental application which includes terms describing what happens to that money (i.e. it's put into escrow until you either sign a lease or back out at which point it's returned).

Answer 2

It is not uncommon in apartment leasing to take a deposit at application that, upon approval, will be applied to the security deposit (or returned if application is declined). However, this up-front deposit is typically not the entire damage deposit and there should definitely be language in the application that defines how this deposit will be handled.

As for ensuring you're not dealing with a scammer there are a number of things you can do. You can investigate the property ownership as many landlords hold property in their name and in many places property ownership is a matter of public record. You can try talking to an existing tenant. You could ask to see a copy of property tax receipt or other proof.

I would not give a deposit without wording in the application/lease that explicitly states conditions under which I would get it back.