Holding Fee Surcharge
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Holding Fee Surcharge (by S i d [MO]) Sep 21, 2022 3:48 PM
       Holding Fee Surcharge (by Robert J [CA]) Sep 21, 2022 4:44 PM
       Holding Fee Surcharge (by 6x6 [TN]) Sep 21, 2022 8:41 PM
       Holding Fee Surcharge (by GKARL [PA]) Sep 21, 2022 8:47 PM
       Holding Fee Surcharge (by Hoosier [IN]) Sep 22, 2022 3:07 AM
       Holding Fee Surcharge (by Sisco [MO]) Sep 22, 2022 6:33 AM
       Holding Fee Surcharge (by S i d [MO]) Sep 22, 2022 7:58 AM

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Holding Fee Surcharge (by S i d [MO]) Posted on: Sep 21, 2022 3:48 PM
Message:

I have been using holding fee surcharges for about 2 months now and it has worked out well. The way it works is this:

1) If an approved applicant wants the property but cannot move in right away, they must pay $X to hold it for up to 7 (seven) days, max.

2) Each day, I deduct the daily rental rate (monthly rate / 30) rounded to the nearest dollar from the holding fee that was paid. I don't actually do this daily, I just keep tabs on how many days it's held until lease signing day.

3) On move in day, the holding fee is bill for the number of days it was held * the daily rate, and the remaining balance is applied to their move in costs.

4) If the 7 days expires and they haven't completed the lease, then the full amount of the holding fee is forfeit to me as liquidated damages.

This not only helps them with a little flexibility, but it gets me paid for being flexible. I used to hold for free! Duh, what was I thinking?!?!

It also encourages them to get MOVING with their moving, since it does cost the daily rate. Otherwise, they could take their time since they were not paying anything.

The other thing is I haven't had a single person ask about getting their "holding deposit" back. Even when I clearly spelled everything out about it being a Holding FEE, they still would sometimes think of it as a deposit. Knowing that it is getting reduced DAILY seems to have removed that confusion.

For those who use holding FEEs, do you do something similar or better?

--184.4.xx.xx




Holding Fee Surcharge (by Robert J [CA]) Posted on: Sep 21, 2022 4:44 PM
Message:

I'm glad you have something that is working for you. But here in California a "Deposit" and "Holding Fee's" are treated differently. A "Deposit" has to be fully refunded. A "Holding Fee" requires the "applicant" to sign a "Contract/Form" that they agree to the daily deductions. But, you must have a way for the applicant to break the "contract" and limit their loss once they changed their mind and gave you "proper" notice.

For example they can not just call you and say, I don't want your rental any more. It needs to be followed up with either an email or text message, and you have to respond to confirm their wishes before you rent to someone else. Otherwise they can change their minds again and want to take the rental after you rented to someone else.

I myself no longer take "holding fee's" or "deposits". I keep on showing the rental and look for another renter until that applicant signs a lease and hands over all of the move-in fee's. That's like $2000 to $5000 up front. If they can't come up with the money, then they are not for me. --47.156.xx.xx




Holding Fee Surcharge (by 6x6 [TN]) Posted on: Sep 21, 2022 8:41 PM
Message:

Smart.

Have you had anyone but heads with the idea? --73.113.xxx.xxx




Holding Fee Surcharge (by GKARL [PA]) Posted on: Sep 21, 2022 8:47 PM
Message:

I do something similar but I have a date certain they must move in or the holding fee is forfeited. I'm willing to give them 15 days at max. If they're not in by then, they forfeit. Generally, my holding fee is equivalent to the SD. --173.255.xxx.xx




Holding Fee Surcharge (by Hoosier [IN]) Posted on: Sep 22, 2022 3:07 AM
Message:

I like your way better than mine….I charge the pro rated rent amount per week, with a 3 week maximum, and make sure to note it as non refundable. I collect the entire amount up front, but I do offer to apply half to first months rent if they move in, as I figure they are not causing wear and tear on the house for those weeks. --99.92.xxx.xxx




Holding Fee Surcharge (by Sisco [MO]) Posted on: Sep 22, 2022 6:33 AM
Message:

Very good! I like the 7 day maximum duration of hold. I am curious how this holding fee agreement will play out, will more people just skip it and sign the lease earlier?

--149.76.xxx.xxx




Holding Fee Surcharge (by S i d [MO]) Posted on: Sep 22, 2022 7:58 AM
Message:

Sisco, I had a person just do that yesterday. When I informed him that he had 24 hours to pay all move-in fund or the holding fee with the daily surcharge, his response was, "Okay, let's just do the lease." Paying = motivation.

6x6, I haven't had any one refuse yet. One question on my application is "If approved, can you pay the full security deposit and first rent payment immediately?" Most everyone answers, "Yes", probably because they think that's what I want to hear. I know I'm not catching any liars at this point: I'm catching people who are broke and admit it. Saves time as that's an automatic DQ. So then what happens is if they CAN'T pay right away, then I don't hold, or they pay prorated rent/holding fee as mentioned above. --184.4.xx.xx



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