Why are they needed?
When you apply for a property there is inevitably a time gap between your application and the actual moving in. The delay can be anything from a few days to a few weeks.
What causes the delay?
First – we have to process your application, do all the credit checks and take up all the references that are needed. This can take anything from two to five days depending on how quickly your employer responds to reference requests.
Second – you may have to organise your own affairs, stay out your notice in your present home, book removal firms, raise the money or whatever. This might take anything from a week to four weeks.
When you apply we agree a reasonable delay for you to take up the tenancy. Then once your application is in we take the property off the market and do not show it to anyone else.
How do we work out the amount of the Holding Deposit?
The amount of the holding deposit depends on how long the property is being held for you and the agreed rent for the property. Typically it is one week’s rent. If we find that we are unable to accept you for the tenancy we will return the holding deposit to you – you will have received a Holding Deposit Receipt form from us stating the exact terms and conditions under which the money is held. We can only keep the holding deposit for fifteen days unless you agree a longer period.
What effect does it have on us and the landlord?
Let us say that the agreed timetable for moving in is two weeks after you apply. That means that the property is off the market for those two weeks. During that two weeks the landlord is not receiving any rent but she is prepared to forgo that because you look like a good tenant. Now what happens if you find that you cannot move in on the agreed date? Perhaps you have found a better house elsewhere or your job has changed or many other things might have happened. In that case you forfeit an equitable proportion of the holding deposit as it is used to compensate the landlord for that loss of rent.
Another way of looking at it is that it reassures the landlord and us that you are genuinely wishing to move in.
Is it a Security deposit or Bond?
No, neither in part or in whole. It is a just a mark of your bona fides and to compensate if something goes wrong.
And remember: it enables us to reserve the property off the market until you move in. When you do move in that money is used to help pay your first rent.
The legal stuff
The full legalities of the Holding Deposit are written out on the Holding Deposit Receipt that you sign. Nothing in that document is affected by this web site which is here to help you understand why it is needed.