When you have been to a viewing and are sure you want to accept the offer of the accommodation you will start a process of documentation and payment to create a tenancy contract that is legally binding.
The viewing represents the property OFFER being made to you.
Your verbal or written confirmation that you wish to proceed is the ACCEPTANCE of the offer.
You should be shown the Tenancy Agreement before you are asked for the Holding deposit.
If you pay the holding deposit before looking at the tenancy agreement terms you will have entered into a legal agreement for that property by securing your intention to proceed with the payment. This removes it from the market whilst reference checks and preparation for a tenancy agreement are undertaken. Because a legally binding contract is created at this stage you are responsible for:
- not wasting a landlord or agent’s time i.e. if you know that you cannot to afford to rent the property.
- reading any tenancy agreement and being aware of the obligations under the tenancy before you pay a holding deposit.
- understanding that when you pay a holding deposit, this creates a binding conditional contract between you and the landlord. Under this contract, it is usual for you to agree and be bound to provide honest representations as to your income, tenancy history and references, and to enter into the tenancy under the terms agreed with the landlord.
- not providing any false or misleading information to try and obtain the tenancy – you risk losing your holding deposit.
- providing any information required to support your tenancy application in a timely manner.
- making known to the landlord or agent at the earliest opportunity if you are aware of any potential issues that may affect your tenancy application (i.e. previous County Court judgements).
- carrying out any reasonable requests made by the landlord or agent to progress the tenancy.
before paying a holding deposit, you should ensure that you clearly understand the landlord or agent’s requirements, the terms you are agreeing to rent the property and the circumstances in which you may lose your holding deposit.
A landlord/agent cannot ask you for more than one week’s rent equivalent as a holding deposit (this cap is based on the total agreed rent for the property). For example, if there are three tenants who are jointly liable for the agreed total weekly rent of £240, the landlord or agent cannot charge each tenant a £240 holding deposit. The maximum this group of tenants could be asked to pay as a holding deposit between them would be £240.
A landlord/agent should stop advertising a property once a holding deposit has been paid. Landlords and agents can only accept one holding deposit for one property at a time. They are not permitted to take multiple holding deposits for the same property.
If you are asked to pay a holding deposit, you should always obtain confirmation in writing from the landlord or agent of:
- the amount of deposit you have paid
- the agreed rent
- the specified date for reaching an agreement (‘the deadline for agreement’)
- other agreed material terms you will be renting the property on
You will be able to use this as evidence should you need to challenge a landlord or agent’s decision to retain your holding deposit.
Refund / Retention of Holding deposit
Refund of Holding Deposit in full within 7 days if:
Retention of Holding Deposit if you:
you and the landlord enter into a tenancy agreement
provide false or misleading information which the landlord or agent can reasonably take into account when deciding to let a property
the landlord choosing to withdraw from the proposed agreement
fail a right to rent check
the ‘deadline for agreement’ passing without a tenancy having been entered
decide not to proceed with a tenancy (i.e. you ‘withdraw’ from a property) – unless a landlord or agent imposes a requirement that breached the ban or acted in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them
fail to take all reasonable steps to enter into a tenancy agreement (and the landlord or agent takes all reasonable steps to do so, for example, clearly requesting information required to progress the tenancy). A landlord or agent must return the holding deposit where they impose a requirement that breaches the ban or acts in such a way towards you that it would be unreasonable to expect you to enter into a tenancy agreement with them.
If a landlord/agent does not have legitimate grounds for retaining, or does not provide you with notice in writing setting out why they are retaining, your holding deposit within 7 days of deciding or within 7 days of the ‘deadline for agreement’ passing, you will be able to recover your holding deposit via your local authority (usually trading standards) or the First-tier Tribunal.
Even when a landlord or agent is entitled to retain your holding deposit, they should consider whether it is necessary to do so.
A landlord/agent must set out in writing why they are retaining your holding deposit within 7 days of deciding if this is before the ‘deadline for agreement’ or within 7 days of the ‘deadline for agreement’ passing, otherwise they forfeit the right to retain your holding deposit and must return it you.
Unlawfully retaining a holding deposit is a civil offence with a penalty of up to £5,000.
The landlord/agent is responsible for:
- providing you with clear information about why they are requesting a holding deposit, including the sum that is required and the circumstances where you may lose all or part of the deposit.
- not wasting your time, being clear about their expectations and checking that you meet the basic income and credit requirements before taking a holding deposit from you. They may do this by having an informal discussion with you about the requirements to let the property, e.g. acceptable level of income. If they consider that you will not be a suitable tenant, they should not take a holding deposit from you.
- providing you with a copy of the tenancy agreement before taking the holding deposit.
- stopping advertising the property (they cannot accept multiple holding deposits for the same property) once a holding deposit has been paid.
- defining what they consider to be credit worthiness – you should have a clear understanding of what might count against you so that you have a fair opportunity to provide any relevant information. If this includes previous missed and late rent payments, a landlord or agent should make this clear to you.
- not unlawfully discriminate against you based on your disability, sex, gender reassignment, pregnancy or maternity, race, religion or belief or sexual orientation.
The Landlord /agent is likely to conduct ‘background’ checks which could include credit referencing and character referencing and the Right to Rent check. The Right to Rent check is a home office requirement which has to be made on all tenants to ensure they are legally entitled to be in the UK and renting property. You will either have a The landlord will have to keep a record of you.
They may also be checking the credit worthiness of your guarantors.
As part of the contract signing process you might be asked to provide a UK-based guarantor - someone (parent/guardian/family member/friend) who is willing to sign an agreement to pay for any rent or damages, if you (the tenant) leave or fail to pay. You can find more information here.
Some students might not be able to provide a UK-based guarantor and may be asked to pay more rent and/or deposit instead.
Check the wording of the guarantor form or agreement. Many guarantors are unaware they are often undertaking the liability of the whole joint tenancy. Guarantors should not assume they are only guaranteeing a 'share' of the obligations. With Joint tenancies consider getting the guarantors to communicate with each other before signing the contract.
It is advisable that no one sign a contract or guarantor agreement until everyone is ready to sign.
Be cautious of guarantor forms or agreements using legal terminology.
Guarantors should be sent the tenancy agreement and additional guarantor paperwork. It is important both tenant and guarantor read and understand the paperwork.
Students can arrange a contract review appointment with the Student Advice Centre to look over this for you.
The Tenancy Agreement
Landlords will usually have two weeks (14 days) to enter into a tenancy agreement with you once they have received a holding deposit. The ‘deadline for agreement’ is the 15th day after the holding deposit has been received. You may agree a different ‘deadline for agreement’ with them in writing (which could be more or less than 15 days).
Contracts can vary significantly in length, detail and style. They can range from a couple of pages to being 30+ pages. These form the core and standard terms that you will be bound by.
Ensure anything that was agreed or promised at the viewing is added to the tenancy agreement.
Remember you cannot simply cancel or break the contract because it no longer suits you.
You will have statutory rights and obligations in addition to your contractual ones.
Types of Tenancy Agreement:
Generally, if you rent a property in the private rented sector as an individual or group you will usually be an Assured Shorthold Tenant. This is the most typical type of tenancy students have in the private rented sector. Typically:
- Students are usually offered a standard fixed term of 12 months, although you may be able to negotiate a shorter term. If you sign a fixed term contract you are liable to pay rent for the full period.
- You will have either ‘exclusive possession’ of a room, or more typically, the whole property. The landlord/agent can only access the area you have exclusive possession of if they give you 24 hours notice in writing
- If you rent from the University or live with your landlord you will have a different type of tenancy/licence and notice/access rights.
- Contracts can be written or verbal and both are valid and binding.
- If you are sharing and you are all listed on the same contract this is a joint tenancy and usually means you have joint and several liabilities. It is important to understand that this means you are individually responsible for the whole contract and payments as well as collectively. This liability often carries over into the guarantor’s liability too.
- >You may be sharing but just have your name on a contract and have sole liability for your room but joint liability for communal areas.
The Student Advice Centre run a tenancy contract review service if you are unclear about any aspect of your contract.
Use the online Shelter tenancy checker to help you work out what type of tenancy
Energency Performance Certificate (EPC)
If you make a request to view the property, the full Energy Performance Certificates (EPC) must be provided at the time when you are viewing the property. Additionally if you request information about a property they must provide this when they first make information available in writing.
EPC’s These indicate the energy efficiency of a property and could indicate to you how expensive your bills will be.
Last updated: 16 November 2020