Holding Deposit & the DPS

Heidi_Jane

Hi,

I have prospective tenants who have agreed to pay a holding deposit provided that I no longer advertise the property.

Must I now accept the deposit and lodge it immediately with the DPS. The deposit in 1/3 of the full deposit that I require before they move in.


The prospective tenants will pay the holding deposit and hand over the documents that I require to carry out their reference and credit checks. Do I have to issue the AST agreement at the same time?

Thanks.

tbs624

Hmmm - another new LL who is getting Tenants in before getting familiarised with L&T issues and obligations? :sad:

You are confusing your deposits - the deposit that has to be protected is a payment that tenants make to cover any damage that they do to your property etc - this is not the same as a holding deposit. You need to check this out before going any further - have a look here to help you understand the difference: http://www.direct.gov.uk/en/TenancyDeposit/DG_066380 and here: http://www.studenthousing.lon.ac.uk/problems/holding-deposits-campaign.html

You said in one of your previous posts that you were joining the RLA but it isn't enough to just pay your subscription - you will have all sorts of difficulties if you don't do your research. Missing one month's rent is nothing to what it could cost you if you get things wrong, especially if you are unfortunate enough to get tenants who know how to play the system, or a tenant is injured or worse because of an act or omission on your part. I think everyone is prepared to offer help on here but you will in effect be running a business and you have to comply with the applicable rules.

clutton_2

there is no facility within DPS to accept a deposit in stages ....

Vincenzo

I have prospective tenants who have agreed to pay a holding deposit provided that I no longer advertise the property.

That's all very well but what if their references are no good??? Normal protocol is to take the deposit, continue to advertise, check out the references and if YOU pull out, return the deposit.


Must I now accept the deposit and lodge it immediately with the DPS. The deposit in 1/3 of the full deposit that I require before they move in.

No. The deposit should be lieu of part of the first month's rent.

The prospective tenants will pay the holding deposit and hand over the documents that I require to carry out their reference and credit checks. Do I have to issue the AST agreement at the same time?

Depends what you mean by 'issue'. You can give them a copy that they can read and sign if you want. BUT you should only sign it once you are happy with their references/credit checks and are ready for them to move in. I would suggest on the day they move in, along with the inventory and check in.

clutton_2

please get a letting agent and then spend 6 months researching before even trying to do this yourself - you clearly have no idea what you are doing - and i am sorry if this sounds blunt, but, its how your posts come across.......

theGrinch

its been a while, but i think you have 14 days to lodge it.

tbs624

theGrinch wrote: »

its been a while, but i think you have 14 days to lodge it.

Nope the OP is talking about a holding deposit - entirely different thing.

clutton_2

a "holding" deposit, as far as i know, has no legal status - How a LL / LA handles this is entirely up to them. LL might be saying "i will keep this money and not advertise the house to anyone else, and when your credit checks come back satisfactorily, you get the house, and the holiding deposit will form part of your first months rent - OR i will keep this and not advertise the house and if your checks come back not satisfactorily you get your money back and/or i keep some of the holding deposit for credit checks". When you give a receipt make sure it says what the holding depoist is for.

i personally never bother with holding deposits, too much extra bother. Get them to fill in a Tenancy application form, (www.landlordzone.co.uk) take a small credit check fee (this shows committment on the part of the tenant). Give them an AST to read and to take away. Then do all the checks you can. If they are ok - then get them to pay one months rent in advance, take another months rent in cleared funds as a deposit, sign two ASTs, give them one, lodge the deposit within 14 days of taking it.

theGrinch

tbs624 wrote: »

Nope the OP is talking about a holding deposit - entirely different thing.

when dealing with tenants, a holding deposit is a composite of the deposit and therefore falls under the DPS. hope that clears it up for you.

tbs624

theGrinch wrote: »

when dealing with tenants, a holding deposit is a composite of the deposit and therefore falls under the DPS. hope that clears it up for you.

Thanks for sharing how you personally do things.

A security/damage deposit must indeed be lodged within 14 days, but holding deposits are not affected. IMO the difference between the two types of deposit is perfectly clear, however, if you check back you'll see that the OP is a new LL. Many tenants are advised to use LLs who don't require the payment of a holding deposit. As Clutton has already said such deposits are unnecessary, a view that I concur with.