Can a tenant cancel a lease before it begins?

The landlord and tenant agreed on lease terms and tenant gave the landlord a security deposit.  However, before the written lease was signed, the tenant cancelled the lease.  Is this scenario, the tenant would not be entitled to a return of the security deposit because, even without the written lease, the landlord and tenant still had a month to month lease.

Attorney Tom Olsen: We occasionally get emails from people who have, what you might call an oral lease, a handshake lease. The tenant gives the landlord a check for a security deposit, and then prior to move-in day, the tenant changes her mind and says "By the way, I'm not going to rent here. Can I get my security deposit back?" How's that normally shakeout?

Attorney Rob Solomon: Not well. The shaking is confusing, to begin with, because nobody really knows what that money was in the first place. I think tenants seem to think that that was some sight sort of deposit. If they didn't end up renting the place, they get it back. The landlord thinks it's a true security deposit which means that when the lease-- when it didn't happen when the lease didn't occur, the first month's rent was not paid, and so the security deposit came into play. But it's a perfect example of why things should be in writing even though it's legal not to have them in writing, that kind of confusion is what you're likely to see when you don't put things into writing.

Attorney Tom Olsen: Does it occasionally happen where landlord and tenant meet and they say "Yes, we agree. I going to rent your house." and the landlord says "Okay, I'm going to prepare written lease for you to sign." and at that moment in time, the tenant gives the landlord the deposit but no written lease has ever signed before the tenant cancels the lease. Will that still be a lease?

Attorney Rob Solomon: It's a lease but I think the court would interpret that as a month-to-month tenancy. Since the lease was never signed, there was never an agreement for what typically would be a year's lease but apparently, the parties reach some agreement in what-- when we're into oral agreements in which something happened, courts interpret those as month-to-month tendencies.