What is a holding deposit?
Once a potential tenant has viewed a property and definitely wants to move forward, a landlord may choose to take what’s known as a holding deposit. This creates reassurance both for the tenant and the landlord. In taking a holding deposit the landlord agrees to not move forward with any other applicant. In giving a holding deposit a potential tenant agrees that they will not pull out of the agreement (without losing their deposit)
There is no set amount for this at the time of writing this, however one week’s rent is often a good rule of thumb. Once received/paid the tenant should receive a receipt that states what this money is for, under what conditions it might be returned and what will happen to it when the tenancy begins.
Can it be returned?
The holding fee is only returned to the tenant if the landlord pulls out. If the tenant chooses not to take the property after applying and paying the holding fee it is not returned.
What happens to it when the tenancy begins?
Once the tenancy begins it normally becomes part of the security deposit.
For more help on matters like this visit our FAQ page – https://www.summitproperty.co.uk/faq/