First Ever Viewing, Been Asked To Hold Til Friday??

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    First Ever Viewing, Been Asked To Hold Til Friday??

    Hi there,

    I am completely new at this and i have my first viewing tomorrow. The gentleman has asked me this question, but i don't know what to tell him when i see him tomorrow (it was a phone message). He wants to know if he likes the house can he pay a deposit on Friday and will i hold it for him. I am unsure what he means.

    I've read the articles on this website which say continue to market until yoU get that all important first months rent plus bond and an agreement signed. Do you think he will be asking me to stop showing people the house? What do i tell him?

    Many thanks in advance!
    S. x

    #2
    Even if you take a holding deposit, confirm the amount in writing, with the address of the property and the applicant's name and address, and use words on the receipt "subject to contract" and "holding deposit" which means you can withdraw at anytime before a tenancy is signed and exchanged.

    Make sure you undertake independent referencing yourself or use tenant verify (look on the left of this page) and do not accept any bits of paper showing what a fine fellow he might be. There are rogues aplenty out there. Also don't rush to get him in if he likes it, take your time and go at your pace. If he gets his way at an early stage then he is in control when it should be you.

    There are many threads on the forum dealing with all aspects of choosing a tenant so have a good look at them by using keywords in the search facility.
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

    Comment


      #3
      Originally posted by Nello9 View Post
      Hi there,

      I am completely new at this and i have my first viewing tomorrow. The gentleman has asked me this question, but i don't know what to tell him when i see him tomorrow (it was a phone message). He wants to know if he likes the house can he pay a deposit on Friday and will i hold it for him. I am unsure what he means.

      I've read the articles on this website which say continue to market until yoU get that all important first months rent plus bond and an agreement signed. Do you think he will be asking me to stop showing people the house? What do i tell him?

      Many thanks in advance!
      S. x
      It is unreasonable of him to expect you to keep the property for him until next Friday with no evidence of commitment on his part. The rule is that if he wants the tenancy, he must demonstrate his goodwill by paying a non-refundable holding deposit immediately (not in six days' time).

      Asking for the first month's rent well in advance is more problematic as recent court cases have established that it must be treated as a deposit. When would the tenancy begin?

      Just ask for the holding deposit; when he signs the tenancy this becomes the tenancy deposit and must be protected.

      Tell him politely that you cannot hold a property for anyone without some financial surety and that if he cannot produce any until next Friday he will have to take his chance that the property might have 'gone' by then.
      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

      Comment


        #4
        Thanks to both of you for your advice! I will definitely look around the forum using the search facility. What you've said makes perfect sense.

        He said he would like to move in on 21st December if we likes the house and everything goes well.

        Just a quicky last question - How much should i ask for a holding deposit? I will also look at past posts, but just in case i have trouble finding the info. I have a duplicate book so i am all set with the receipt. I will make sure i write the terms "subject to contract" and "holding deposit" on there.

        Thanks again!

        Comment


          #5
          Whilst there may be ways of making a "holding deposit" non-refundable, having a document which says on it "subject to contract" is not one of them. That is an indication that there was not at the time the document was made an intention to create a contract. If there is no contract there can be no basis on which to retain money paid by the other party.

          Deposits may be divided into two not completely mutually exclusive types. Before getting to them it is important to remember that where there is a breach of contract the aim of the remedies available is, so far as possible, to restore the injured party to the position he would have been in if the breach had not occurred. Accordingly, where damages are awarded they cannot exceed the loss incurred. To put it another way, the injured party cannot treat a breach of contract as an opportunity to generate some extra cash.

          The first type of deposit is where parties enter into a contract and the person who is to receive the goods or services ("customer") makes a payment on account. If all parties comply with their obligations the deposit stays with the supplier. If the customer defaults, the supplier has something to fall back on to cover his losses. However, if his actual loss is less than the deposit he must refund the difference to the customer, even if the deposit is described as non-refundable. If the supplier successfully sues for breach of contract, the deposit is taken on account of any damages awarded.

          The second type is where the customer is given the use of something which he is expected to return in the same condition in which he took it and/or where periodic payments are made. The sole purpose of the deposit is security for the performance by the customer of his obligations. If the customer complies with his obligations the deposit is returned to the customer. The observations above about damages not exceeding loss apply.

          There are therefore two basic rules:

          1. A deposit needs to be supported by a contract.

          2. A deposit can never be absolutely non-refundable.

          When it comes to letting, time is money - rent lost for a void period can never be recovered. It is understandable that landlords want to cover themselves and discourage time-wasters and those who change or cannot make up their minds. But the law is on the whole against them, saying:

          either,

          1. Commit yourself to something and take a deposit which will afford you some security in the event the tenant is in breach;

          or,

          2. Do not commit yourself to anything and take what may be described as a deposit, but pay it back if the tenant withdraws.

          So what can a landlord do? Entering into a conditional contract or granting an option are possibilities, but, apart from requiring some careful drafting, are rarely appropriate to the grant of a short term residential tenancy. That leaves a lock-out agreement.

          A lock-out agreement is one where the landlord agrees in exchange for money not to deal with a third party for a specific period. Whilst the sum paid may be described as a non-refundable deposit it is not a deposit at all, but the consideration payable by the prospective tenant and accordingly, on that account, non-refundable. Of course it will be refundable if the landlord fails to keep to the bargain and the agreement may provide that the sum paid is to be treated as a payment on account of rent or whatever if the tenancy contemplated proceeds. The benefit to the proposed tenant is very little since he does not get any guarantee that he will get a tenancy; all he gets is the assurance that the landlord will not deal with anyone else for a given period, something almost impossible for the tenant to police. Accordingly the OFT are not keen on lock-out agreements and, bearing in mind the principle that consumer law allows a man to make an unwise choice, but not an uninformed one, you need to be sure that the proposed tenant understands exactly what he is getting for his money. Since no sensible person will, other than for a nominal sum, enter into a lock-out agreement if he understands its full implications, it more or less follows that a court will assume, unless the contrary can be shown, that anyone who signs a lock-out agreement does not understand it.

          Comment


            #6
            Thanks very much for that - interesting reading!!

            Please correct me if i am wrong about this, but i have read around both articles and threads on here and i have thought about the following:

            If the prospective tenant does decide he wants to take the house i will give him a copy of the application form (from here) and ask him to send the funds to cover the credit checks when he returns the application form - i am thinking that this will show he is serious in itself. Since he doesn't plan on moving in until 21st December, which is almost 4 weeks away i think there is little point in taking any kind of deposit from him. I'll just say that i want to get it let out asap, so unless he is able to sign and pay sooner (can he do this while waiting for his current arrangement to end?) i will just continue to find a tenant. And if someone takes it before him then that's just how it goes.

            I just don't want to make promises i can't keep, and from reading about holding deposits, they might be good if the tenant can move in pretty soon, but not for such a long time. I could hold it for these four weeks, him change his mind and me have to refund his holding deposit despite me having paid another mortgage payment in the meantime.

            Is this reasonable? I just want to be fair and honest.

            Thanks.

            Comment


              #7
              That sounds perfectly reasonable and it is perfectly in order for him to sign a new tenancy contract (for your property) before his current tenancy ends. As long as he honours his commmitment to both contracts, he is doing nothing wrong.
              'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

              Comment


                #8
                There is of course no reason why a contract cannot be signed now for a tenancy to begin on 21st December.

                Comment


                  #9
                  Thanks again. The viewing went well and he seems like a decent guy. I gave him the application form and he called me later on and explained that he would never pass the credit checks and explained why and asked whether it matters. I have referred him to the agent we had asked to do an intro for us but what would you say to that? I know a few people who wouldn't pass a credit check personally and they rent with no problems. I'm just wary.

                  Comment


                    #10
                    It's not just a credit check but follows the applicant for the last 3 years of his life, and whether he has been an upstanding 'citizen'. If he is unlikely to "pass" by his own admission that should be a warning sign.
                    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                    Comment


                      #11
                      Processing such as is carried out by Tenantverify and similar companies checks the applicant's rent payment record, debts, salary/income and ability to pay the rent being asked for the property they want to rent. They also ask for a character reference.

                      On which of these things does he think he will 'fail'?
                      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                      Comment

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