Existing tenant is on AST via OpenRent. Has been in property for 7 months and given one month’s notice. Move-out date: 1 May 2022.
New tenant (found via a friend-of-a-friend) has viewed the property and has verbally agreed to move-in after existing tenant moves out. We have purchased a standard AST for this purpose.
My question: if we draw up a new AST with start date 5 May 2022, at which point do we initiate the Security Deposit with mydeposits for the new tenant once it’s been signed by both parties? The new tenant wants us to get everything ready this week (by 8 April) but are we legally allowed to have two security deposits in govt protection schemes concurrently? Have tried to search for the topic without any success.
We are not taking a Holding Deposit as the tenant is adamant that she wants to secure our property and wants to show commitment by signing the AST and placing the 4 weeks of Security Deposit.
When you say you have purchased a standard AST, do you mean you have bought Openrent’s Rent Now service? If so, Openrent will automatically open the mydeposits account once contracts are signed, and deposit and first month have been paid. It is normal to have two security deposits in protection concurrently, particularly where the expired and new tenancies are close in terms of dates. Deposits should be returned within 10 days after the tenancy ends. Not sure why you are not taking a holding deposit? I would request this asap, since this money (equivalent to 1 week rent) is returned to the tenant when the let goes ahead, usually by putting it towards the rent or tenancy deposit.
I was also wondering where you got your AST. What about all the other docs you need?
Its not a good idea to sign the tenancy agreement before the other tenant has left. If for some reason they didn’t leave, it would put you in breach of contract with the new tenant and they could sue you for their costs.
I suggest you insist on a holding deposit and do everything in the days between the tenancies.
Thanks for your input. No, my wife bought one online for £4.99. I am now thinking of just going through OpenRent because I like the automated steps. I guess my only concern is having the existing tenancy still ‘live’ and creating a new one running alongside it within the OpenRent platform. Hope this is easy.
It’s good to know that it’s possible and legal to have two security deposits concurrently.
I suppose we should take the time to be organised and take a holding deposit then. I think we were of the opinion that if this prospective tenant backs out at such an early stage, we would not have much difficulty in securing someone else (based on the overwhelming demand last year). And if the tenancy is signed and secured at an early stage, we can safely skip the need for a holding deposit.
I would recommend joining the NRLA. They have a wide range of guides and model documents, including tenancy agreements free to members that I think you would also find the advice service helpful.
I also like the automation from Openrent’s Rent Now service. It also makes the holding deposit process easier as Openrent hold it on your behalf and if the let goes ahead, they apply it to the rent/deposit, and if it doesn’t then they simply return it to the tenant.
Re your concern about existing tenancy running alongside this new one on the Openrent platform, this hasn’t been a problem for me. As David suggested, to avoid risk of breach of contract if existing tenant doesn’t move out on time, you could sign the contract only once they have actually moved out but you could still take holding deposit from incoming tenant in the meantime and use the time to complete referencing etc.