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Temporary Contact? Landlord requesting Deposit before main lease contact signed

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  1. #1

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    Aug 2011
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    Temporary Contact? Landlord requesting Deposit before main lease contact signed

    Hi All,

    After expressing our interest in renting a place the landlord has requested that we give them a deposit. The agent is in typical agent fashion is pushing for the desposit. Comments such as "you will miss your chance", "we can't hold it for you" , "another tenant has seen it and will probably take it" etc.

    My first concern was the deposit would be non-refunable which means the landlord can put any type of language in the main contract. If we don't like and walk away we lose our desposit.

    The agent is proposing we give the landlord a deposit (which is equal to one months rent) sign a temporary contact and then sign the main lease contract.

    I am very sceptical about the whole thing. If others have been in this situation let me know if they agree or like my wife think I am overreacting.

    Thanks a lot


  2. #2

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    Feb 2010
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    One month's rent (generally the first months rent) is provided on signing a provisional contract.

    If you feel pressured then do it in your own time. There will be another property a around the corner.

    shri likes this.

  3. #3

    Join Date
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    Most agents won't hold a place longer than a few hours without a deposit of some sort.

    But you certainly don't have to give them a month's worth, maybe a few thousand would do until you sign the contract.

    shri likes this.

  4. #4

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    Quote Originally Posted by virago:
    One month's rent (generally the first months rent) is provided on signing a provisional contract.

    If you feel pressured then do it in your own time. There will be another property a around the corner.

    Thanks, the provisional contact is a one pager? Or is it close to the full contract with some minor items missing? Sorry I know that is a how long is a piece of string question but I'm a total newbie to this. Previously company & agent took care of everything.

  5. #5

    Join Date
    Aug 2006
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    The provisional is usually one or two pages long. There is usually an empty box on the form where you can add clauses which are specific for your contract, although most rental contracts in Hong Kong are pretty standard.

    But I agree, if you feel pressured, walk away. There will always be another property available, and there are always other agents.

    Thensome likes this.

  6. #6

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    all provision agreements that we have ever signed are 1 page. and yes, we've always been asked for a 1 month deposit.

    once both parties have signed, the terms are usually that if one party backs out they need to reimburse the other the deposit X2 (if memory serves).

    a couple of years, we thought we had to move, i signed the provisional agreement, handed over 1 month deposit. when the agent presented it to the l/l, the l/l decided they didn't want to rent. so, the agent refunded the deposit back into my acct within an hour! the agent only refunded the 1 month as the l/l hadn't signed the agreement yet.

    it is perfectly normal. but as Virago says, if you feel too much pressure, then don't sign... but you do run the real risk that someone else will.

    Thensome likes this.

  7. #7

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    Thank you all for your insight, feeling a little more relaxed now.


  8. #8

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    I know this is 2 years after the fact but in case someone is just reading this and wants another two cents worth:
    I am a property agent and I always make sure my tenant client reads a copy of the formal contract before signing anything.
    Either that or we go right to the formal contract.
    I don't like surprises and signing a provisional agreement with a deposit is dangerous if you don't know what is in store in the formal agreement.


  9. #9

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    Quote Originally Posted by gentlebob:
    I know this is 2 years after the fact but in case someone is just reading this and wants another two cents worth:
    I am a property agent and I always make sure my tenant client reads a copy of the formal contract before signing anything.
    Either that or we go right to the formal contract.
    I don't like surprises and signing a provisional agreement with a deposit is dangerous if you don't know what is in store in the formal agreement.
    it's 3 weeks after the fact....

  10. #10

    Join Date
    Jul 2007
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    Carang-- LOL-
    The Brit- that's a good question- some prefer to skip it- but here are some reasons for it:
    1. in a hot mkt like HK (even now when things are cooling rentals zing off the shelf) it's a way to very quickly tie down a property. A prov agreement takes only a few minutes and will take the prop off the market.
    2. also, for tenants who want to think about what items to request (furn removal, repairs, etc) it give s them tiime to consider that.

    caveats:
    1. a prov. agreement is actionable - meaning it does not force either party to take up residence - one can default on a prov. by losing the deposit or for LL, an amount = to deposit.
    2. so if you have negotiated a GREAT price, I recommend either going straight to a formal agreement or crossing out the default clause- once the default clause is deleted the prov agreement IS actionable

    Last caveat: Always always always put down a full month's deposit if you can- or as close to it as you can- when signing the prov agreement- LL will be less likely to default if he owes a whole month to you. Also make sure the clause is there re: defaulting party owing the agent- I know it seems greedy but actually it will dissuade the LL further from defaulting. Usually the default is because he can get a higher offer...

    good luck....


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