Hi, prospective tenants have paid a holding deposit via Rent Now.
I have requested references - but this is going really slowly and feeling increasingly uneasy about the tenants as there is clear lack of comms from them. ( back ground is the tenants wanted to move in asap - so there should be at least some presumption of urgency on their part )
Looking at the Open rent guidance ( after the horse has bolted ! ) it seems that if the tenancy does not go ahead - then the holding deposit would most probably back to the tenants and I’ve lost X weeks rent ? ( unless they fail right to rent, or pull out themselves? )
Looks like trying to ‘claim’ it far from certain?
Is it better to clearly define that a holding deposit would be non-refundable ( and clarify criteria and timescales ), and if the tenant agrees, then get them to pay the holding deposit direct to you?
It would not be legal to refer to the holding deposit as non-refundable. There is a whole appendix on holding deposits in the Tenant Fees Act, which I would suggest you read.
David 122 - thanks very much, I will definitely go through that.
So I’m taking it there is no realistic way to retain a holding deposit - even if the tenant ‘fibs’ etc. - as I’d expect to seek to retain it will involve a legal process, and fees for that are likely to dwarf the actual holding deposit amount.
I’m in the bad landlord situation of the property being empty, and ready to let immediately - so all time on references ( which naturally are critical ) is costing potential rent. So when the tenants are not responding promptly / failing to provide info. it is really frustrating.
I presume I could propose to increase the rent before any a tenancy is signed, acknowledging that the tenants have to agree - only by a marginal amount ( £40 pcm ) but over a year that would cover the extra week they have wasted being slow with references.
Tim, we went through this before, and don’t take holding deposits anymore. We continue to show the flat till T is ready to sign tenancy agreement and pay a 5 weeks’ security deposit - and are very open about it. They pay their first rent the day before the tenancy starts and they receive the keys.
We don’t do ANY checks with OR and refund all holding deposits placed through it. We give TT the list of documents to send us and are very clear that we don’t hold the flat for anyone till security deposit is paid and tenancy agreement is signed. The same way, TT are free to keep viewing (and many of them do anyway, while sending the documents).
The first one who passes the checks, will get the place. TT know that it’s in their interests to provide all documents fast. Usually it’s electronically, many have all references ready in advance. This way TT, who are slow to send the documents, don’t waste our time.
From our personal experience, the amount of time-wasters is about 95%, and comes from all types of backgrounds. Majority of people who view our flats, say they love them and want them. Then they disappear. Or in the past placed deposit through OR and then disappeared. Or sent some stuff and then disappeared. It doesn’t happen anymore. We treat our applicants the way they treat us. I believe it’s only fair, as long as they know the rules. It’s up to them whether to accept them. And they do because they play the same game. But, unlike us, they’re often not open about it.
There are ways for a landlord to retain a holding deposit and they are spelled out in the legislation.
Query on Holding Deposit processes. The Holding Deposit was paid direct to Open Rent.
the tenant has failed to act reasonably and has not supplied information for reference checks to be carried out.
But - I now see the Tenant Fees Act specifies that:
If you are asked to pay a holding deposit, you should always obtain
confirmation in writing from the landlord or agent of:
• the amount of deposit you have paid
• the agreed rent
• the specified date for reaching an agreement (‘the deadline for agreement’)
• other agreed material terms you will be renting the property on
So if none of that has been done ( don’t think Open Rent advised on this…) then presume all chance of retaining the Holding deposit is lost?
Anyone with any experience of this?
I’m at 14 days since the holding deposit was paid.
Would be nice if there was scope to at least retain the £20 paid for each tenant’s reference - accepting that is peanuts in the scheme of things…
I have no experience of taking a holding deposit through OR, but I would have to assume that their process complies with the Tenant Fees Act requirements. I would suggest you contact them about whether you can retain the deposit.
What about that I paid a holding deposit for a property, the landlord said she will send me the contract to sign within 2 days, they are having a whole building of flats that they are renting, so I went saw the float I agreed to take it, I paid her into their business account holding deposit, 2 days passed I called her no answer, I can’t reach her, I messaged in WhatsApp no answer back. Is this right to do as a landlord? as well I have to move soon and I lost other views due to this, it’s harder to find a property to rent then to let in a property. So all this goes both ways, now I have to go and chase my own money back coz they are not serious and they are losing people time and money
I suspect you have been scammed. Did you view the property? Where was it advertised?
Yes I have seen the flat, and as well I meet the lady I talked to and the landlord, the property I found it on OpenRent.
But you did not pay thru Openrent ?
No, I paid into their business account, which for me it was a bit odd, but I won’t leave like that I know where their building is and I will go to give me my money back as I can see they know the stuff in there and they have the staffs phone number etc, I can see it’s theirs property.
Contact Openrent as ask them to intervene.