Many tenants pay for holding deposits as prospective renters. It serves as a guarantee to take the apartment—the fee apartment holding covers for a month. After the period expires, you either sign the lease agreement or let the apartment go. If you do not sign, you lose the money and the renting space.
This article explains what an apartment holding deposit is, the reasons for this deposit, and the consequences of breaching the lease before moving in. Read on!
What Is An Apartment Holding Deposit?
A holding deposit is the amount of money paid by prospective tenants. When people view and agree to your terms and conditions about an apartment, they pay a certain fee. With this money, the landlord reserves the condo for them. It is taken off the market, giving the tenant enough time to carry out any possible checks such as references. They can also go through their apartment rights and credit as they have not signed the agreement.
A holding deposit indicates the tenants’ seriousness in renting the apartment. In most cases, it is non-refundable. When landlords agree to the fee, it is a sign of acceptance to the prospective tenant. When tenants carry out their checks and dislike the property, they can walk away without further agreement and payment. It would be best not to hold an apartment for more than a month without moving in or signing an apartment.
The landlord can take the apartment back to the market when the holding period exceeds one month. Such a situation occurs if you fail to sign a lease agreement. As the tenant, you can sign it, pay the rental fee as agreed. After the lease agreement, you decide on the moving-in date. Be sure to pay the fees as agreed to avoid contradictions from the landlord.
The Table Below Shows The Average Holding Fees Charges In Different States;
|State||Apartment holding fee charges|
Why Do Landlords Ask For Apartments Holding Deposits?
During the holding period, landlords have enough time to check on the tenants’ ability to pay rent. They can go through the presented document, among other essential checks. Before doing so, they let the tenant know about the activity so that it does not appear like stalking. At this point, the landlord can stop the tenant from taking the apartment in case of suspicious information.
The law on holding is different from state to state. For this reason, always go through what your state laws say before getting into one with any landlord. With this, you can determine whether there are limits to the fee and what happens after moving in. For instance, they deduct it from the first month’s rent in some states. In others, they do not refund. On the occasion of a refund, some state laws say that it must be done within seven calendar days of the tenancy.
What Happens When You Break The Lease Before Moving In?
Some people sign a lease agreement and take time before moving into an apartment. It may be due to limiting factors such as lack of moving services or remote jobs. Whichever the case, after signing the agreement, the tenant has a binding contract with the landlord. Breaking it could attract legal consequences despite the reasons.
There are a few instances when you are exempted from violating the agreement. Among these occasions is when you are a military officer. They happen to be assigned from time to time, hence high chances of not abiding by the lease agreement.
Other than such incidences, breaking a lease before moving in into an apartment leaves you with the following responsibilities;
Assigning Your Lease To Another Tenant
An impromptu break of the lease agreement leaves you responsible for assigning the apartment to another person. After assigning the new tenant, you both become responsible for the apartment, and everything stated in the agreement. Some state laws prohibit this option for security purposes. For this reason, you need to talk to the landlord and explain your situation. Only then can they give you the go-ahead of bringing forth an assignee.
Paying Rent Until The Apartment Gets A New Tenant
Provided you already signed the lease agreement, you become responsible for paying the rent until there is a new tenant. Most state laws agree with this due to inconveniences faced by the landlord. It is only fair for you to shoulder some of the associated burdens. It also helps tenants look for another tenant to take over the lease.
Other options which are not commonly considered include offering to pay brokers’ fees to the landlord. They can hire brokers who can find another tenant with that fee. Most people dislike this option as there is no guarantee to find a tenant soon enough. Landlords end up losing more than the one who broke the agreement. Ensure to give proper notice when breaking a lease before moving into an apartment. It shows respect and honesty. Doing so is likely to lessen the consequences.
When Do You Start Paying For The Apartment After The Holding Period?
During the holding period, you do not pay rent. After all, you have not yet signed the lease contract. You are not legally binding to the apartment. The date you sign the lease, that’s the time your rent starts counting. Ensure to list the date on your contract. Do not pay anything before the signing date if you move into the apartment.
For these reasons, landlords ensure that tenants sign a lease contract before moving in. Even when you have a holding fee, most states require you to sign before living in a rental apartment.
What Can I Do While Holding The Apartment Before Moving In?
The apartment holding period is critical. You can investigate the landlord and the building history before moving in. It gives you enough time to decide on whether to move in or not. Most people pay for this holding period to carry out the following;
To Ensure Everything Is Working.
It’s quite a turn-off when you move into an apartment only to find most utilities are malfunctioning. For instance, you see water heaters are not heating. Electricity outlets tend to be dysfunctional at times, only to find out after moving in. For this reason, make good use of the holding period to check out the apartment. Run the water from all faucets to ensure they are okay. Turn on and off the lights, open all doors, check the microwave and cookers to ensure they work fine.
Most people fear doing this as it seems disrespectful and discourteous. Why pay for a non-functional house while you could have avoided it? It is crucial to do due diligence for your comfort and safety while renting an apartment.
Go through the lease contract.
The holding period gives you more than enough time to go through the lease. It allows you to check every detail, including your tenants’ rights. A lease agreement contains all information on what to expect from your apartment rental experience. Consider counter-checking that all the items provided in the contract match those in the house. It helps you avoid future surprises of incurring costs from things that do not match their description.
During this period, you can negotiate the lease and seek protection where need be. For instance, you can discuss the penalties of breaking the contract before the end of your lease with the landlord. You can also get the answers on who incurs maintenance and repair costs in the apartment. During this period, you get a chance to know whether it is fully furnished or bring your items with you when moving in.
Ensure the apartment is pest-free and clean.
It may seem petty, but checking on the apartment’s cleanliness level is essential. People have different cleanliness levels. The previous tenant might have left the place in a wreck. By checking out the apartment during the holding period, you decide what action to take. For instance, you can choose to clean it before moving in. Alternatively, you can opt-out of the deal and not rent it.
It is better to find and deal with a disgusting mess before moving in than to find out later after lease signing. For this reason, ensure to check on the condition of the walls, bathroom, refrigerator, and kitchen. Some may be easy to clean. As for the permanent messes, you can have the management check and work on them before moving in. Doing so saves you incurring costs for damages caused by the previous tenants.
The standard holding period for an apartment is a month. It may differ depending on the state laws, which is also the case with the holding fee. A holding deposit is a fee paid to the landlord to keep an apartment out of the market and tenant can check it to ensure all facilities are working within this period including water and other utility services. This holding period also gives you enough time to go through the lease contract to ensure you understand everything it states before signing.