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Deposit to Hold Apartment

The future tenant gave me a deposit to hold the apartment until they moved in. They wanted to make sure that I was not going to give the apartment to someone else so they gave me the money to hold it, in New York State. They are backing out and do not want to sign the lease or move in and are demanding their money back. Do I have to return their money back to them? What type of deposit would this be considered? A Security Deposit? And what rights would I have as  landlord in this situation? The deposit was only half a months rent.

I think as long as you stated clearly that it was a non-refundable holding deposit you should be o.k. to keep it.
Vanessa - you've probably taken action by now.  I hope that you kept the deposit.  You took the property off of the market and stopped showing it to other potential candidates.  You lost time and money.  They should not have given you a deposit if they weren't serious.
Never call it a deposit, make it a holding fee and spell out it is non refundable
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