Review our articles below to get the latest information and insights for your business and the industry!
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Review our articles below to get the latest information and insights for your business and the industry!
Got a question, click the Book a Discovery Call button.
What Is A Holding Deposit And Is It The Same As A Tenancy Deposit?
The first confusion arises when landlords think that a holding deposit and a tenancy deposit are, essentially, the same thing. This isn’t the case. Holding deposits (or holding fees as they are sometimes known) are sums of money paid by the prospective tenant when applying to rent your property in Oxford.
This deposit will secure the property and is made before the individual becomes your tenant. Legally, it can only be the maximum amount of one week of rent. Tenancy deposits, on the other hand, are paid right before the tenant moves into the property and can be a maximum of 5 weeks’ rent in England if the property’s annual rent is under £50,000 or 6 weeks’ rent if the annual rent is over that figure.
Scotland has different rules in that the tenancy deposit must be a maximum of 2 months’ rent while in Wales, the tenancy deposit represents any amount of money held by either the landlord themselves or their agent as a security against losses incurred due to the tenant’s actions, typically equating to about one months’ rent.
Tenancy deposits must be put into one of the deposit protection schemes approved by the government, and if the deposit isn’t stored in one within 30 days of its receipt, landlords may face penalties. Holding deposits, on the other hand, are not required by law to be put into one of the deposit protection schemes.
Reference Checks And Holding Fees
Once a tenant has paid a holding deposit, the landlord should carry out their checks on the tenant’s references. If they pass those checks, the next step is to sign the tenancy agreement before arranging a date for moving in. Should the tenant fail the checks, however, the amount paid as a holding deposit will come into play.
If the prospective tenant has knowingly provided inaccurate information which leads to them failing the reference checks, the landlord may retain the deposit. In a similar vein, if the tenant submits their application and progresses to referencing before backing out of renting the property, retaining the deposit is also often the preferred course of action. On the other hand, if it’s the landlord’s choice to no longer proceed with renting out the property, the tenant will receive their deposit back.
When Is A Holding Deposit Returned?
When everything goes smoothly with the tenant’s application being approved, references passed, and the agreement signed, then the tenant will receive the amount of their holding deposit in the form of a deduction from the first month of rent paid.
Are Tenant Fees And Holding Deposits The Same Thing?
Holding deposits aren’t fees that tenants are charged. Rather, they’re safety measures that protect landlords and their agents from any financial losses. A ban on tenant fees enacted in 2019 has caused some confusion about holding deposits. However, since tenants receive back the amount that they pay as a holding deposit, it isn’t deemed to be a fee. Therefore, it’s entirely acceptable and even encouraged to ask for one.
To find out more about holding deposits, please get in touch with the lettings team at Cardea Lettings and Management Ltd on 01865 570065.
If you’re a landlord in Oxford and you want to minimise the difficulties of managing your property by using the services of a lettings manager, knowing the right questions to ask is key to success!
At Cardea Lettings and Management Ltd we have years of experience in the field, so we can give you our expert insight into the top five queries.
1. Is There A Designated Team For Property Lettings?
If you’ve chosen a property manager that is part of a bigger estate agency which also handles lettings, you need to determine whether there is a specific team designated solely for rental properties.
How do I Start Being a Landlord
in Oxford?
Whatever your reasons for becoming a landlord, the following guide will help you answer the question of how to get started.
1. Being a Landlord is a Business
Many people find themselves thinking that if they had the money, they’ll just buy a few houses to rent out and live a stress-free life off the income.
While this is great in theory, it’s very rarely this straightforward. Being a landlord and owning rental property in Oxford doesn’t just mean waiting for the rent to flood in each month. There are taxes to pay, tenants to deal with and maintenance costs to consider.
November 7, 2022
How Should Landlords Deal With Emergencies?
If an emergency arises at your rental property in Oxford you need to respond rapidly and deal with it effectively to minimise the impact on the property itself and your tenants. There are several emergency situations which may spring up, from flooding to fires, so the team here at Cardea Lettings and Management Ltd has brought you some helpful information about which actions to take.
Expand your knowledge with the wealth of FREE resources we provide!
November 14, 2022
How Do I Know I’m Dealing With A Reputable Lettings Agent?
You may have read in the news that rental scams that involve fake lettings agents and bogus landlords have unfortunately been on the increase in recent years. If you’re looking for a property to rent in Oxford it’s important to be aware of this so that you ensure you are only ever dealing with a reputable lettings agent.