What to Know About Holding Deposits
Holding deposits are used for different purposes. You might give a holding deposit to reserve the property that you are moving into. You might give a holding deposit when you have already signed the lease agreement as a security deposit against the value of one, or two months rent. Generally, it is considered to be a payment that you will get back when you move out of the property, unless there is evidence of damage that you have clearly caused.
A holding deposit is required after interest is shown in a property to secure that interest and move towards tenancy within the domicile. Getting an upfront holding deposit is a smart approach to ensure a potential tenant’s early commitment. Likewise, upon finding a new place to reside, the prospective landlord would seek a holding deposit whilst lease arrangements are negotiated. So, in this article ,we included a few things to know about holding deposits…
What exactly is a holding deposit?
The holding deposit can be known as a holding charge. The Tenant Fees Act (2019), abbreviated as the TFA, sets out the requirements for holding deposits. A holding deposit is a refundable payment provided to the landlord or the broker by the renter. A holding deposit must be paid once the overall parameters of the lease have been agreed upon.
What is the cost of a holding deposit?
This is generally the sum of the lease for a week that you pay to a rental office or owner in order to prove your serious interest in a leasing and to secure a certain apartment or house. Since 2019, the TFA in England prohibits most renting fees and limits the max amount of lease deposits. The statute allows for refundable holding deposits that cannot surpass a week’s valuation of rent. Holding deposits can’t surpass more than one week’s rent for joint renters, no matter how many people apply on their behalf. If you are being asked for one month in advance and one month’s deposit, make sure that it is a security deposit, and not a holding deposit.
What follows when you make a deposit to reserve your place?
Following the payment of the holding deposit, a timeframe for the agreement must be met. As soon as the holding deposit was already deposited, the renter has 15 days, except as otherwise stated in the agreement, to sign the lease agreement with the landlord and finally begin leasing the property.
There are several scams to be aware of in regards to holding deposits. Some people ask for money in advance. Some ask for money to be transferred overseas. Others ask for money without giving a receipt or supplying any evidence that the payment has been made. Some even worse scammers ask for money for a property that they know is for rent, but they are not the broker for that property.
Always be careful when handing over money.
