An urgent question and seek your answer asap.

A lease might be signed tomorrow, but the lease starts 9/1/2022.

It is more than three weeks.

Do you charge a holding fee for the time being from 8/7 to 8/31?

if you do, what is the reasonable charge for a holding fee?

Thank you.

I charge a holding fee that I feel certain they will not walk away from $300 - $500.

Until they sign the lease and pay First Last and SD, I require and hold onto the Holding Fee.

My Holding Fee document they they sign makes it clear that if by August 30 (in your case) they have not sign the lease and paid all monies, the Holding Fee will be forfeited.

And I want the Holding Fee NOW or I will continue to show the apartment.

I use the Holding Fee to "set the hook", so they won't keep looking at apartments and try to get a better deal.

If you are not pro-rating the rent for August, just collect Sept rent and security deposit for September when you sign the lease.

A holding fee is no good, it allows the person to back out of the contract with little consequences. Instead I keep on showing the vacancy until the lease is signed and the person pays the full MOVE-IN FEE's -- First and Security.

Well,

What would you do in this case:

the potential tenants met qualifications, but, their movein date is for another say 25 days, yes, they will pay the security deposit, and sign the lease.

Then the first month rent on the day of moving in, 9/1/2022.

So, it means I kept the property for them for almost a month free?

I will hold up to a month if the tenant is my desired description. Non smoking, no pets, one or two adults and zero to two under 8 children. Good job, good savings and a educated professional. This tenant stays longer, takes care of my property and is low tenant maintenance. I also keep my rents very attractive compared to similar properties. During Covid I lost zero rent but I’m not in Los Angels county.

I would have told them that I will continue to show the place and rent it to the first person who pays and signs a lease. In this market there is no reason to loose nearly a months rent, there is a good qualified tenant who will take it nearly immediately.

I've changed how I do my holding fee. I used to charge $400 (my rents max out at $800/month) to hold for 2 weeks. If they signed the lease and paid the rest, I'd credit the full $400 toward the move in. So I'd "eat" up to 2 weeks vacancy, utilities, and mowing. If they failed to follow thru, the entire $400 was forfeit as liquid damage.

Now I still charge the fee and handle it the same, but the difference is I bill the daily rent rate against it after 24 hours. So if I hold for 5 days, they have $275 left to apply toward move in. This covers my costs while encouraging them to move in sooner rather than waiting while I rack up expenses.

If you've had a hard time find qualified tenants (it's taken a while)and these are really well qualified, I understand why you would hold it for them.

However: be careful. The words you use are VERY important. If you take a

"DEPOSIT", they can keep looking for another place and if they back out on you, you HAVE TO RETURN IT.

If it is a "NON-REFUNDABLE HOLDING FEE" and they back out, then you KEEP IT.

Personally, I do not sign a lease until they have paid all move-in funds, including first mont's rent.

I will use holding agreement, but much prefer to actually have them pay all move-in funds and sign the Rental Agreement. Then it is first month's rent and security DEPOSIT - but if they back out, you are legally allowed to keep the deposit because they are bound by the contract and didn't give proper notice.

In MA, a "Deposit" is legally refundable if they do not move in (just giving keys is not moving in). Moving in is what's called "taking possession". If they don't "take possession", they don't owe any rent (and you must return all Deposits).

In MA, a Holding FEE (not Deposit) is not refundable.

So, charge them a Holding Fee for an amount equal to First Month's rent. Set the hook.

Tell them, "I'll Hold it for you if you pay a Holding Fee so I feel comfortable cancelling all the remaining appointments that I have for this apartment".

If they won't pay Holding Fee, keep showing the apartment.

Alice, you have received good advice on how to handle a holding fee.

I think that we LL’s can get too motivated to make a deal work that we lose sight of the unreasonable requests that the prospects are asking. They need to be moved in 23 days.

Your prospects should lease your house and pay the deposit and first lease payment today. If they are really so strapped for cash that they can’t, you probably shouldn’t deal with them.

Alice,

If the home is vacant I do not do a hold.

We stay square with FairHousing by treating everyone the same.

The home stays on the open market until someone signs the lease and pays. The rent start today.

When presented with that policy they usually sign.

You must know that prospects who wait often flake out. While waiting they find something they like better. HOLD is a way for them to stall and avoid commitment.

People DO walk away from their hold fee and the LL is left starting all over.

This forum is full of posts where the hold backfired.

Why sign a lease before they move in?

They are asking you to hold it - they should be paying for that. I can hold for a couple of days but split that cost between both parties.

I like brad's advice

"If the home is vacant I do not do a hold.