Ever got confused between holding fees, holding deposits, and security deposits? Here is a little explanation as to what holding fees are, what they mean, and why we use them!
What are holding fees?
Holding fees (Sometimes called holding deposits) are a small amount of money that you put down to reserve a property. By law, a holding fee can be no more than one weeks rent. Once a Holding fee is paid, the landlord or agency should stop advertising the property, and begin the tenancy admin.
Do I get my holding fee back?
If you enter into the tenancy with no issue, you will get your holding deposit back. Often this money is deducted from the first weeks rent. If something goes wrong with the landlord/agent and they are unable to let you move into the property, they should return your holding fee.
However, if you decide you don't want to move into the house after you have paid the holding deposit, you won't get the money back.
What's the point in a holding fee?
Holding fees are useful for both tenants and letting agents. When you pay a holding fee, the letting agent must take the property off the market, and cannot take a holding fee from anybody else. It also means that letting agents do not spend time on admin for tenants who pull out last minute.
Top things to remember:
The holding fee is different to the security deposit - make sure to budget for both!
Do not pay a holding fee unless you are certain you have found the house that you want!
Remember: A holding fee legally cannot be more than one weeks worth of rent.
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