After having finalized where and who you want to live with, the next step for you is to secure the property you and your housemates have agreed on. Securing a property is important if you don’t want the landlord to show it to other potential tenants. Generally, the landlord requires a holding fee or a deposit from the tenants, and you will have to pay it in order to make sure no one else rents the property while you prepare to move in. The holding period is usually decided by the landlord and the holding deposit often equals one month’s rent, but can vary depending on whether you are renting solo or with friends.
When making a holding deposit, you need to take certain things into consideration. Check whether your deposit will be adjusted against the first month’s rent; if so, you should ask for a receipt stating the same. Moreover, you need to clarify the terms of the deposit. If for instance, you change your mind about renting the property and want your deposit back, the landlord maybe entitled to keep some or all of it. The landlord has the right to keep some of your deposit if he/she has incurred any loss due to your change of mind. If however, the landlord agrees to pay back the complete deposit if you don’t rent the property, you must ensure that the same is written and signed with a receipt.
You should also realize that paying the holding deposit does not necessarily give you the right to move in. You will have to pay the first month’s rent and any security deposits before you are formally recognized as a tenant. However, during the holding period, the landlord cannot rent out the property to another tenant. If, the landlord does rent it out during the holding period, you will at least be entitled to the whole of your holding deposit and should consult an attorney for any other legal remedies you may have.
It is also common practice for landlords to ask you for a guarantor, who will be contacted in case you default on your rent payments. This is a practical measure to protect the landlord’s interests, and you can name any adult, parent or guardian, as long as they consent. Before you hand over the deposit and sign the tenancy agreement, make sure you read through the whole document carefully and seek explanation for clauses you don’t clearly understand.