Letting IP privately - holding deposit

[Lotana]

I've never rented out an IP privately and got a newbie question.

I advertised it on the web and started receiving calls. If after asking a few questions they want to take a look - I'll show them the property (it's vacant). If they say they want it from, say, 1 Feb, should I insist on them signing a RTA or just take a holding deposit? If deposit - then how much? Is it refundable?

Thanks,

Lotana

[asy]

Hiya Lotana...

If you take a bond on a residential property you MUST...

that's MUST !!!

Pay it into the residential tenancies bond authority, AND you must issue the tenants with a condition report and the appropriate bond receipts.

It is NOT mandatory to take a bond, that is, you can let tenants into the house without one, it's up to you, but if you take a bond you HAVE TO pay it to the RTBA...

hope this helps,

asy :D

[asy]

ooops

sorry,

on re-reading your post says DEPOSIT, not BOND... (asy gets glasses cleaned now...)

If you receive a deposit, you may refund it. BUT you may not receive two deposits on one property. (That's as I remember the legislation) I'm sure JoannaK will give you a more definative answer as soon as she sees the question!!

asy :D

[JoannaK]

Hi Lotana,

Asy is correct, you are only able to take one deposit on the property, and it can not be more than equivalent to one week's rent. Once you take the deposit the property is held in the tenant's favour for the period of the deposit. If they change their mind during the hold period you are entitled to withhold part of that deposit on a pro rated basis,

eg if a house is $700 per week and the tenant leaves a $600 deposit, then the tenant has reserved that property for 6 days. On day 3 the tenant changes his mind, you are entitled to keep $300 of that deposit and you must refund the rest.

You can not hold the deposit for longer than 7 days and the tenant is supposed to sign the lease within the deposit period with the deposit being deducted from the balance of monies owing for bond and rent in advance.

Of course, it's entirely up to you if you agree to have the tenant move in in Feb as your example states, but you are certainly allowed to tie them to a lease now that doesn't start till that date.

I hope this helps.

[Lotana]

Johanna,

Thank you for simple and clear explanation.

Regards,

Lotana