Landlords are allowed to take a ‘holding deposit’ from prospective tenants while they check them out but the right is hedged around with rules and regulations.
These are discussed in our FAQ here.
However for landlords and agents of properties in Wales, there is now an additional layer of bureaucracy as from 28 February 2020 you also need to serve ‘specified information’. As set out in the statutory instrument here.
The information to be provided, which must be given before the holding deposit is taken, includes:
We have now prepared a form which can be used – which in conjunction with a draft copy of the tenancy agreement and the tenant information form, will (if completed properly) provide all the information required.
Our form is drafted as a paper form to be handed to tenants personally. The regulations do provide for the information to be given electronically – although you will need to obtain the consent of the ‘prospective contract holder’ first. If you decide to do this, then you can use our form to help you draft your own electronic document.
These new rules mean that landlords and agents should prepare as much as possible in advance – including the form of tenancy agreement to be used.
This will however minimise the work to be done during the holding deposit period – when the time will be counting down to the end of the holding deposit period by when you need to have completed all your pre-tennacy work and be in a position to sign the tenant up.
Note that the form should be given to the applicant at least one day before payment of the holding deposit money, otherwise it may be hard to prove that it was given first – as is required by the regulations.
Landlord Law members will find the new form on the holding deposit documentation page.