| Lettings advice 11:04 - May 21 with 1088 views | Sarge |
Have had an application accepted on a tenancy and spotted there is a 'non refundable holding fee' equivalent to 1 week's rent. Usually I see this listed as a deposit which is refunded once the tenancy is confirmed but this doesn't appear to be the case here. Is this still legal since the tenancy fees changed in 2019? |  | | |  |
| Lettings advice on 11:14 - May 21 with 1032 views | handslikeplates |
Nicked this from the Government’s Housing Website as it puts it better than I can.
When a tenant has made an acceptable offer on your property, you might want to take a holding deposit to “reserve” it for them while you carry out the credit checks, verify their references and prepare the tenancy agreement.
Only when they’ve paid a deposit can you be sure that they’re serious about taking the property and that they haven’t put offers on other places at the same time. It’s not unusual for tenants to change their minds about a place, especially those renting rooms in house-shares.
A holding deposit can be as much or as little as you feel comfortable with, but to give you an idea of what’s “normal,” letting agents usually ask for £100 to £500, depending on the value of the rent.
It’s important that you explain to the tenant that if they back out of the deal they might lose some or all of their holding deposit. You should put this in writing by creating a holding deposit agreement for both you and the tenant(s) to sign.
Once the tenant is ready to move in, you can deduct the holding deposit from the first month’s rent.
You mustn’t make the mistake of stating the tenants deposit is “non-refundable”, as this could be in breach of trading standards regulations.
If the tenant changes their mind and doesn’t take the property, you must grant a holding deposit refund and return their holding deposit minus any costs you’ve incurred on their behalf and any loss of rent you’ve suffered as a result of their action.
Unless you ask a tenant to pay separately for credit checks, you can deduct the cost of these from the holding deposit along with the cost of preparing a tenancy agreement, inventory and check-in report if they decide to back out of deal.
If the tenant changes their mind shortly before they’re due to move in and you’re left with a void as a result, you can also deduct the cost of the lost rent from the tenants’ deposit.
Incidentally, this doesn’t need to be protected in a government authorised scheme because holding deposits are not kept for the duration of the tenancy. |  | | |
| Lettings advice on 11:27 - May 21 with 978 views | Sarge |
| Lettings advice on 11:14 - May 21 by handslikeplates |
Nicked this from the Government’s Housing Website as it puts it better than I can.
When a tenant has made an acceptable offer on your property, you might want to take a holding deposit to “reserve” it for them while you carry out the credit checks, verify their references and prepare the tenancy agreement.
Only when they’ve paid a deposit can you be sure that they’re serious about taking the property and that they haven’t put offers on other places at the same time. It’s not unusual for tenants to change their minds about a place, especially those renting rooms in house-shares.
A holding deposit can be as much or as little as you feel comfortable with, but to give you an idea of what’s “normal,” letting agents usually ask for £100 to £500, depending on the value of the rent.
It’s important that you explain to the tenant that if they back out of the deal they might lose some or all of their holding deposit. You should put this in writing by creating a holding deposit agreement for both you and the tenant(s) to sign.
Once the tenant is ready to move in, you can deduct the holding deposit from the first month’s rent.
You mustn’t make the mistake of stating the tenants deposit is “non-refundable”, as this could be in breach of trading standards regulations.
If the tenant changes their mind and doesn’t take the property, you must grant a holding deposit refund and return their holding deposit minus any costs you’ve incurred on their behalf and any loss of rent you’ve suffered as a result of their action.
Unless you ask a tenant to pay separately for credit checks, you can deduct the cost of these from the holding deposit along with the cost of preparing a tenancy agreement, inventory and check-in report if they decide to back out of deal.
If the tenant changes their mind shortly before they’re due to move in and you’re left with a void as a result, you can also deduct the cost of the lost rent from the tenants’ deposit.
Incidentally, this doesn’t need to be protected in a government authorised scheme because holding deposits are not kept for the duration of the tenancy. |
Ta so from that and other things I've read this 'non-refundable holding fee' is illegal. It must be refundable under certain conditions and no more than a week's rent. As this is written it's not refundable under any circumstances and isn't deducted from the rent. Will challenge them on this. | | | |
| Lettings advice on 12:06 - May 21 with 893 views | handslikeplates |
| Lettings advice on 11:27 - May 21 by Sarge |
Ta so from that and other things I've read this 'non-refundable holding fee' is illegal. It must be refundable under certain conditions and no more than a week's rent. As this is written it's not refundable under any circumstances and isn't deducted from the rent. Will challenge them on this. |
Yeah, if you end up not taking the property through your own choice it’s possible for the landlord to make ‘reasonable’ reductions from this so called deposit to cover costs, if you complete the process and become a tenant the holding fee should be returned or deducted from future payments. No such thing as a standard ‘non-refundable fee’. | | | |
| Lettings advice on 23:05 - May 21 with 694 views | HARRY10 |
| Lettings advice on 11:27 - May 21 by Sarge |
Ta so from that and other things I've read this 'non-refundable holding fee' is illegal. It must be refundable under certain conditions and no more than a week's rent. As this is written it's not refundable under any circumstances and isn't deducted from the rent. Will challenge them on this. |
It would give me cause for concern that the landlord is either ignorant of this (so what else ?)
or deliberately 'trying it on'
either should tell you all you need to know | | | |
| Lettings advice on 23:17 - May 21 with 681 views | Sarge |
| Lettings advice on 23:05 - May 21 by HARRY10 |
It would give me cause for concern that the landlord is either ignorant of this (so what else ?)
or deliberately 'trying it on'
either should tell you all you need to know |
So I spoke with the agent, they confirmed in writing it was a deposit, refundable under certain circumstances and if the tenancy proceeds, taken against the first month’s rent. So all above board and fine but don’t know why they worded it the way they had. | | | |
| Lettings advice on 23:21 - May 21 with 672 views | HARRY10 |
| Lettings advice on 23:17 - May 21 by Sarge |
So I spoke with the agent, they confirmed in writing it was a deposit, refundable under certain circumstances and if the tenancy proceeds, taken against the first month’s rent. So all above board and fine but don’t know why they worded it the way they had. |
doesn't smack much of competence
more fool, than knave | | | |
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