accepting a holding fee

[Patrick Bartlett]

Hello all

We are considering accepting a holding fee from a potential tenant that will go towards his security deposit when he completes payment of security deposit and first month's rent by a specified date. If he fails to complete payment then he will forfeit the holding fee. We were thinking to have him sign the lease with an addendum stating all of this and voiding the the contract if payment isn't made. Can we do this? Are we opening up a can of worms? Is there a form that you would recommend?

The reason we are thinking of doing this is he has been the best applicant so far. We had a friend show him the place, we are out of state, and they liked him. My wife has talked to him a few times to discuss the property and she likes him. 

thanks for any insight!

[Costin I.]

@Patrick Bartlett I'm half through reading Brandon Turner book on rental management - and just read yesterday their recommendation on holding fee/deposit. They also offer a form to be used for that.

We are in a similar situation, and probably will use that form. However, I would not hold the house for more than 14 days, regardless.