Move in date two months later how the holding deposit work?

Landlord Discussion
1

Hi, I wonder if anyone know how the Openrent holding deposit works? A potential tenant made an offer but will only move in two months later. They offered some upfront payment for the rent. And I wonder how it works if after two months later they decide not to move in. I suppose if the contract had been signed then they will break the contract, and in that case, what landlord can be compensated for the opportunity loss since Openrent will hold the deposit or some rent before moving in?

2

If the tenant pull out after signing the contract, what will happen to the holding deposit? Or what compensation will be to the landlord, in particularly if the moving in date is a couple of months later?

Also, using rent now, when the tenant need to pay the deposit and first month rent? Is it immediately after the signing contract?

3

Hi Kai,

Where tenancies aren’t starting immediately, it’s always best to ensure there’s a signed contract in place. That way, the obligations of both the tenant and the landlord are clear and contractually agreed to.

In the event that a tenant pulls out after the contract is signed, they would forfeit their holding deposit. More info on that here.

With Rent Now, tenants are prompted to make the payment of the final balance as soon as everyone signs the contract - this is also detailed in the contract.

Some landlords will often make specific arrangements for specific payment dates - for instance, with the rent coming nearer to move-in. This is all completely fine also. If payment isn’t coming upon contract signing completing, landlords and tenants can come to an agreement as to when it will.

George

4

Thanks George. I understand the holding deposit fee and I think it makes sense when the agreed move in date is soon even in a month time. However, if for two months later, one week’s amount of holding deposit seem not to be practically sufficient to cover the opportunity cost for the landlord.

Any advice from other landlords?

5

Not sure about how you would get paid, and slightly confused by the above responses:

  • The holding deposit is part of the first months rent, so is only refundable if the landlord withdraws from the proposed agreement
  • Once the agreement is signed by both parties, it is binding and the tenancy must go ahead, so the tenant is legally bound to pay the rent agreed for the agreed term, and a full DPS deposit has to be paid. If the tenant does not go ahead with occupying the property, you have two choices, a) keep the DPS deposit and first months rent or part thereof, on notifying the DPS as to what has occurred, or b) sue the tenant if they fail to pay for the full agreed term.

That is how I see it.

6

Thanks John. I agree with you and this is what I understand. The holding deposit is before the signing contract stage and should not be involved with the stage when the contract is signed.