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  • Property-a-holics

    New problem since June 1st 2019

    I was chatting with a fellow investor today about the fees ban and he mentioned an interesting problem he'd seen:

    2x different potential tenants interested in the property, so 2x 1-weeks rent equivalent taken so that credit checks etc. could be started.

    Both potential tenants passed (which was a surprise) but now one of them has kicked off because they thought the property was all theirs! Of course the 1x weeks rent would be refunded.

    So from a potential tenants point of view they think that paying the 1-weeks rent means it's all done and dusted/reserved as far as they're concerned!

    So if you had 2x potential tenants both interested, what would you do?

    Interesting times.

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    I'd personally pick which I think best Tennant 
    End of the day it's your property
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    Its not my property, but thanks for your reply.
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    I would ensure going forward the terms are made cleared before the deposit is collected. I would just put this down to another item on the checklist for better communication. 

    Not that it was bad before but just another way for a landlord to be upfront and be explicitly clear to manage tenant expectations
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    Saagar

    Disclaimer: I'm not a legal expert or an advisor on any subject. A mere landlord using open forum to share ideas and experiences.

    If this has happened since June 1st then you have broken the law which clearly states only one holding deposit can be taken per property.  You also need to ensure that prospective tenants understand and agree what happens to that deposit if they are successful and under what circumstances money could be deducted from that deposit if they are unsuccessful. 
    If either of those prospective tenants report to trading standards then there is a possibility of a £5,000 fine for the landlord, per first offence!
    This is terribly drafted legislation folk, designed to trip landlords up every step of the way.
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    Thanks for your thoughts, but just to re-iterate, IT'S NOT ME!

    However, I'm sure a lot of LL's could get caught out by this 1 holding deposit per property.

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    If you are taking multiple applications for your properties, the best option is to not take a holding fee until you have a satisfactory applicant who is able to proceed, once agreed then take the Holding Fee which does indeed guarantee them the property.

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    Agreed. A timeframe for the tenant to provide information (eg. within 48 hours) to then move forward with the holding deposit would be the way forward. If they don't provide the required info within that time then the next stage is not reached.

    Add into the equation a GDPR statement as well, nothing like a bit more Govt.-induced red tape!

    And again, just to re-iterate, IT'S NOT ME!

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