Western Australia Holding Deposits
In WA, Holding Deposits are known as Options or Option Fees. The maximum Option Fee varies from $50-$1,200 depending on the premises. The Option Fee must be credited towards the first rent payment or be refunded to the tenant when the tenancy begins.
This guide covers landlords (or head-tenants) and tenants (or sub-tenants) in a Residential Tenancy. This applies to the majority of share accommodation and residential property rental situations. To confirm it covers your situation visit What is my share accommodation situation?
What is an Option Fee?
Holding Deposits are known as ‘options’ or ‘option fees’ in Western Australia. Paying an Option Fee grants a prospective tenant an option period where the rental premises is held for them while they make a final decision to enter a tenancy agreement.
Whats is the Option Period and the maximum Option Fee?
The maximum amount for an Option Fee varies:
- When the weekly rent is $500 or less the maximum is $50
- When the weekly rent is more than $500 the maximum is $100
- When the weekly rent is $1,200 or more and the premises is located south of Shark Bay (i.e. South of the 26th parallel) the maximum is $1,200
The landlord and prospective tenant can agree to an Option Period of any length.
Is a receipt required by law?
Although not required, it is recommended that the landlord give the tenant a receipt for an Option Fee. The receipt should state:
- Names of the parties,
- Address of the premises, and
- Period of the option.
What happens to the Option Fee
When the landlord may keep the Option Fee:
- If the tenant does enter the agreement, then the landlord must put the Option Fee towards the rent payable under the agreement. Alternatively, the landlord can simply refund the Option Fee.
When the tenant is refunded the Option Fee:
- If the tenant chooses not to enter the agreement, the Fee must be refunded within 7 days,
- If the landlord refuses to enter the agreement, or
- If the landlord enters an agreement with a different tenant.
Transferring money safely
When paying your deposit, bond or rent by cash make sure you get a receipt. With modern phones this can be as simple as an SMS or email confirming the amount, date and what it is for. Keep a copy of this incase you need it later.
Never ever transfer money to a bank account outside of Australia or use a untraceable money transfer system such as WESTERN UNION. If anyone asks you to do this on any website it is likely to be a scam and you are almost guaranteed to lose your money.
If this ever happens on Flatmates.com.au report the member immediately so we can investigate and take the appropriate action.
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These legal guides provide a brief summary and introduction of the laws and regulations affecting share accommodation. They do not cover all cases in all legal jurisdictions and might not apply in your specific share accommodation situation. It is important that you use this information as a guide only and seek independent Legal Advice or consult the Relevant Acts. We do not accept any liability that may arise from the use of this information.