The importance of Holding deposits

Landlord Discussion
1

I find it extremely frustrating when potential tenants ask me to send the lease agreement, (actually rush me send the lease for signing) only to back out especially when they had already confirmed their interest days ago and had discussed enough.

Not only does this waste time and effort, neither of which I can get back but it also causes me to lose other qualified applicants who may have been a better fit.

This is exactly why holding deposits are so important, particularly with student applicants. In my case, I’m fairly certain they were still shopping around for other options and I was a fool to spend time in drafting the lease agreement,

2

I don’t understand why it causes you to lose anyone. I’ve never used a holding deposit in nearly 30 years of letting property. I continue to let the property and take applications throughout the process, keeping all those who qualify fully informed of where they are in the queue. I only do viewings for applicants who meet my criteria. I only reference candidates who will pass referencing (based on paperwork I’ve collected) and only stop advertising after check in. This way, if someone pulls out at the last minute, I have the next applicant ready to go.

3

The student market is different

They are teenagers and friends break up or they have another house in mind and you are their backup just in case the first one falls through

You have to accept all groups and see which one lasts the test of time

4

Yep… although the OP only said “particularly with student applicants” so I took the rest of the post to apply to typical lets. And I’m not sure why that means they lose anyone else in the chain. When advertising, you’re best processing ALL qualified applicants simultaneously until the one at the top of the pile (you can set the criteria for that) needs paid references taking up. If that doesn’t work out within a few days, go with the next in the queue.

The problem with a holding deposit is that you freeze the process for everyone else and prioritise someone who may actually turn out not to be suitable. Then you really do risk losing other interested applicants.

I’m also uncertain why they spent any time drafting the lease agreement. If they want to see it, just send them a blank one (which we’ve all got on file anyway, right). Takes seconds.

5

thank you very much everyone..useful inputs.. Clearly I’ve done several mistakes !

6

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