" It is also their guarantee that they will fulfill all of their pre-tenant obligations and rent the home by a mutually agreed-upon date. If for some reason they back out, the deposit to hold is forfeited to the landlord to use to cover lost rent during the holding period, as well as advertising and other costs associated with getting the home re-rented to another qualified applicant. However, when the new tenant fulfills their obligations, the deposit to hold usually transfers as their security deposit to be held during their tenancy. It is best to require the deposit to hold as soon as your new tenant has been approved. "

― Brandon Turner , The Book on Managing Rental Properties: Find, Screen, and Manage Tenants With Fewer Headaches and Maximum Profits