Prospective tenants may be asked for a deposit to reserve or hold premises they intend to rent. However, the lessor/agent can only accept a deposit from a prospective tenant if a copy of the proposed agreement and any bylaws or park rules have been given to the tenant. Under the Act, the only deposit that can be taken from tenants at this stage is a holding deposit (application deposits are not allowed).
The time period for which a holding deposit will apply is negotiated between the prospective tenants and the lessor/agent. When a period is agreed, it should be written on the receipt for the deposit. If no holding period is stated on the receipt, the Act states that the period is 48 hours.
The lessor/agent can only take 1 holding deposit at any one time for the property. On accepting a holding deposit, the lessor/agent must give a signed receipt and ensure the property is available if the person proceeds with the tenancy.
If the prospective tenant does not proceed with the tenancy and advises the lessor/agent within the holding period, the entire holding deposit must be refunded within 3 days.
The lessor/agent can keep the holding deposit if the prospective tenant fails to notify the lessor/agent of their decision not to go ahead with the tenancy within the agreed holding period. If the prospective tenant indicates that they will proceed with the tenancy but then fails to enter into the tenancy agreement, they will forfeit the holding deposit.
When a tenant signs a tenancy agreement after paying a holding deposit, the holding deposit becomes part of the rental bond. Any surplus amounts then become rent in advance.