Holding Fee Agreement

A holding fee agreement is a contract between a landlord and a prospective tenant. This agreement allows the tenant to hold a property for a certain period by paying a small fee before making a final decision. This fee is usually one week`s rent and is non-refundable.

The holding fee is a way for landlords to safeguard against tenants who may change their minds after viewing the property. By requiring a holding fee, landlords can ensure that they have a serious and committed applicant before taking the property off the market for other prospective tenants.

However, it is essential to note that holding fees are not a security deposit, and tenants cannot assume that they will be returned when the tenancy agreement is signed. This fee is used to secure the property while credit and reference checks are being carried out on the tenant.

The holding fee agreement must be in writing, and the terms and conditions of the agreement must be clear and well-defined. This will help to avoid any misunderstandings or disputes that may arise in the future.

If the tenant fails the credit and reference checks, the landlord may reject the application and keep the holding fee. However, if the landlord rejects the application for any reason other than the tenant`s failure to pass the credit and reference checks, the holding fee must be returned.

The landlord must also sign the holding fee agreement and provide a receipt to the tenant. This receipt should include the amount paid, the date paid, and the property address.

In conclusion, holding fee agreements are essential for landlords to ensure that they have serious and committed tenants before taking the property off the market. Both landlords and tenants should understand the terms and conditions of the agreement before signing it. This will help to avoid misunderstandings or disputes that may arise in the future.