In order to reserve a property for an upcoming tenancy, an agency may ask the prospective tenant to pay a holding rent or deposit as a security downpayment. When the tenancy is created this holding payment is then used to pay the first month's rent or used as the security deposit. If the tenant defaults on the tenancy, then they forfeit the deposit downpayment and agency will take the money as revenue, by applying an appropriate fee.
- Record the receipt of the deposit amount from the tenant into the client account via the Record Receipt form.
- Do not allocate the money to any existing rent or charges, and untick the checkbox which will attempt to Apply Future Rent.
- The funds received will be stored as an overpayment credit on the tenant's account.
- You may add a memo or a note to the tenant and/or property to highlight that a holding deposit has been paid in relation to a potential tenancy.
- If the tenancy becomes active and rent or a deposit becomes due, the charge may then be paid using the overpayment.
- If the tenant defaults on the tenancy, the agency may apply a forfeit charge to the tenant, and use the tenant overpayment to pay this charge.
- This money then becomes management revenue which may be transferred to the office account.