From tenancy deposit schemes to the different types of payments you’ll need to make to secure a property, getting your finances figured out can be difficult if you’re a first-time renter. We’ve built a simple guide for you to help break deposits down for you that little bit easier. As experienced lettings experts, we can always be on hand to advise you and to help provide any tenancy deposit solutions you may be searching for.
What is a Holding Deposit?
In order to reserve a particular property, prospective tenants might be asked to pay a holding deposit to the letting agency.
- A holding deposit is taken to a reserve a property when the letting agency accepts your offer.
- The purpose is to cover administrative costs and to prevent prospective tenants from making multiple offers on various properties, potentially costing letting agencies/landlords money.
- A property may be listed with multiple letting agents, in this case, a holding deposit does not completely guarantee that the property will be let to you as it will not be completely off the market.
The holding deposit is usually the same amount as one week’s rent. If everything goes well and you become a tenant, this deposit may be used towards your first rent payment, alternatively, it may be used towards your security deposit.
A holding deposit is not compulsory, however, if you do agree to give one, make sure you ask for clear terms and conditions when receiving the invoice. You should also ensure you receive a receipt.
What is a Property Deposit Agreement?
A property deposit is taken in case you break or damage anything during your tenancy, and in case of non-payment of rent. By law, your property deposit must be protected by a deposit protection scheme (see below).
Usually, this deposit is either equal to your monthly rent or more depending on the property being rented. For example, if the property has been recently renovated or is a new build, the deposit may be higher. You may also have to pay a higher deposit if you have a pet.
Your landlord is legally required to enter into a tenancy deposit scheme – this is so that your deposits paid can be protected. Tenancy deposit solutions are therefore mediated by a third party. Property deposit agreements are, therefore, far simpler and fairer than they have been in years prior.
Protecting Your Deposit
Since 2007, it has been a legal requirement that property deposits be protected. This ensures that landlords send deposits to a deposit protection scheme where it is held until the end of the tenancy. There are three such schemes currently operating in England. Family Homes use the Tenancy Deposit Scheme (TDS), which is backed by the government. Your deposit is held by the TDS until you move out and the amount of deposit to be returned is agreed.
The Tenancy Deposit Scheme (TDS) was created to protect tenants – and they ensure that they receive the correct amount of their deposit back. The TDS is responsible for providing a wide range of tenancy deposit solutions, and for mediating between all parties.
- If at the end of your tenancy, you and your landlord agree on how much of your deposit is to be returned, they must do so within 10 days. If there are any disputes, your deposit will remain protected by the TDS until the dispute is resolved.
- An impartial adjudicator at the Tenant Deposit Scheme can assist you in resolving disputes, basing their judgment on evidence provided.
- This ensures that your deposit is returned fairly.
How we can help..
Family Homes are an established letting agent in Sittingbourne. We have been in business for over 28 years and are the leading and largest independent specialists in property lettings and management in the area. If you need any advice, Family Homes are more than happy to help. We can talk over the phone or we can arrange an appointment. Simply fill in a contact form or call us on 01795 47 34 34.