Holding fee on a rental in Texas

8 Replies

I did a search and didnt find info exclusive to Texas.

I have an applicant that qualifies and wants the property, it wont be ready for about 10 days. 

I am planning on collecting a holding fee of 250 to be applied to her security deposit upon signing of the lease.  Non refundable if she does not sign the lease on ready date, as I am stopping any advertising for prospective tenants.

Just wanted to know and make sure i have this right, as I do not have a document in place for this. I do have one to prorate the rent, that she will sign along with the lease. 

I would love to connect with Texas landlords! I am an out of state land lord (CA) 

The rental is in the Wichita Falls area. Id love to also discuss trends and anything else pertaining to the area! 

Thanks!

This is a touchy subject in Texas. You may want to consult the TREC website for more information. If you do not properly handle the money as a security deposit you may lose it in a court of law. Judges tend to favor renters when it comes to undocumented or incorrectly documented fees.

Holding fees are not common in Texas as far as I know. @Hattie Dizmond would have better insight. There is a member @Josh James that is in Wichita Falls and can help you with that market.  The @ sign isn't pulling anyone up for me.

Originally posted by @Mary lou L. :

I did a search and didnt find info exclusive to Texas.

I have an applicant that qualifies and wants the property, it wont be ready for about 10 days. 

I am planning on collecting a holding fee of 250 to be applied to her security deposit upon signing of the lease.  Non refundable if she does not sign the lease on ready date, as I am stopping any advertising for prospective tenants.

Just wanted to know and make sure i have this right, as I do not have a document in place for this. I do have one to prorate the rent, that she will sign along with the lease. 

I would love to connect with Texas landlords! I am an out of state land lord (CA) 

The rental is in the Wichita Falls area. Id love to also discuss trends and anything else pertaining to the area! 

Thanks!

 A holding fee is appropriate if you are holding the place empty, while the applicant makes up their mind.  It's not appropriate to charge them for your convenience until the place is ready.

For a fee to be appropriate, it would be a situation where the place is ready, and you're holding it for the applicant, and because of this, you potentially lost rent, if they change their mind.

I think what you're proposing is unreasonable.  If the place isn't ready yet, and you're not willing to commit to a move-in date for the applicant, then you can't hold them to some fee that didn't result in a loss for you.

What would be fair, is to sign a contract with them with a solid move-in date, and with a get out of jail free clause if you can't deliver it on that date due to no fault of your own.  That type of clause is fairly standard and fair.  In that case, the tenant has the option to get out of the lease, with all fees refunded, if you can't deliver it on move-in date - and you aren't liable for any of their potential costs, if you can't deliver it on move-in date.  If it's not ready, the contract is just invalid, at the option of the tenant.

In my opinion, it's always better to get a signed contract immediately.  I don't understand the trend to wait until move-in day to get a tenant to sign a contract.  If you don't have a contract, they can walk away.  So, sign one, with the get out of jail free clause.  I think it's the best option.

As a tenant now, since I retired a year and a half ago, I hate this trend of landlords not signing the lease until your move-in day.  It's scary and nerve-wracking to think I might not have an apartment sewed up with my stuff in a moving van outside, and my last place vacated.  I think the idea is that it keeps the landlord clear as far as the possibility of the previous tenant not vacating, but if you just put in the clause mentioned, that shouldn't be an issue.  

Anyway, I vote no on your holding fee.  Just sign a contract with them, or keep looking.  That's what I did.  I told everyone I keep shopping until I get a signed contract.  So, delay at your peril :-)

@Mary lou L. Here's the clause in the lease I used, I was referring to:

12. Possession of the Premises. If, after signing this Agreement, Tenants fail to take possession  of the premises, they will still be responsible for paying rent and complying with all other terms of this Agreement. In the event Landlord is unable to deliver possession of the premises to Tenants for any reason not within Landlord's control, including, but not limited to, failure of prior occupants to vacate or partial or complete destruction of the premises, Tenants will have the right to terminate this Agreement. In such event, Landlord's liability to Tenants will be limited to the return of all sums previously paid by Tenants to Landlord.

This is from the Nolo Press California Landlord Book contract that I used.  

So then should I just tell her she got the house and will contact her with a firm move in date and then sign and collect everything( security deposit, prorated rent for May). On that date? 

Should this be in writing? How would I word this? 

What I did was ask them when they want to move in.  And if that works for you, then just choose that date.

For instance, let's say you think you should have the place ready by May 15th, and that date also works for them.  

What I'd do is just write up a contract with the begin date to be May 15th.  I would collect prorated rent from May 15 - June 1st, and the deposit from them.  If they could only come up with the deposit, I'd take that, and tell them I'll exchange the key for the prorated May rent when they arrive on May 15th.

So, just write up the contract as if it begins May 15th.  If you are going to collect the rent on May 15th, put that in there, too.  Just say "Prorated rent for May 15 through May 31st, in the amount of $________ is to be paid upon move-in on May 15th, and will receive keys at that time."

Then also put in the clause I cut and pasted above.

So, you'd have a solid contract beginning May 15th.  And you have an "out" if it's not ready on that date.

I hope that made sense.  I'm about to run out the door to give blood (the exciting life of a retiree, LOL!).  I'll check to see if you have a question for me when I get back.

@Sue K.  we just told her that she got the house and will call her with a firm done date. Thank you for the clause! 

I decided against the hold fee. As it was pointed out the house isn't ready and I'm not losing any rent because it's not ready. 

I'm really tightening up my procedures with adding some items to the lease, move in/out checklist, and really trying to make it all professional looking. Even though I have one house I am really looking at it in a business way.

I picked up some bad habits like exchanging deposit for cleaning. I just wanted a tenant and since I didn't have a property manager I let a lot of things slide. 

Now I am lucky he lives next door!  

Does it seem you are busier now before you were a retiree?  Thank you for donating! 

Originally posted by @Mary lou L. :

@Sue Kelly  we just told her that she got the house and will call her with a firm done date. Thank you for the clause! 

I decided against the hold fee. As it was pointed out the house isn't ready and I'm not losing any rent because it's not ready. 

I'm really tightening up my procedures with adding some items to the lease, move in/out checklist, and really trying to make it all professional looking. Even though I have one house I am really looking at it in a business way.

I picked up some bad habits like exchanging deposit for cleaning. I just wanted a tenant and since I didn't have a property manager I let a lot of things slide. 

Now I am lucky he lives next door!  

Does it seem you are busier now before you were a retiree?  Thank you for donating! 

 LOL, well I keep just as busy, buy my time is my own now - ahhhhhhh.  No more trying to duck out the door to my car or the garbage cans, trying to avoid long-winded tenants who would way-lay me.  And it's so nice to know I really have a day off now.  When you're a resident manager, you can never totally relax, because the phone can always ring.  Being on call 24/7 just .... in a word....s*cks.  :-)

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