A tenant can back out of the offer process by cancelling their offer. We know things can change which is why PropertyLoop doesn't charge renters any fees for backing out of a tenancy, like how many other agencies may. If the home hasn't been reserved and taken off the market yet, you can back out of the offer process without any penalty or costs.
However, if the home has been reserved and taken off the market, backing out at that point means the owner has missed out on valuable time on the market and potential offers from other renters. If you back out of the offer process after reserving the home, some or all your holding deposit will be deducted based on how much time has passed.
It takes about a week, 7 days, from when a renter reserves a home to when they sign the tenancy agreement. Therefore, the holding deposit will be split into seven payments that will be returned to you on a pro-rata basis. If you back out earlier in the process, you'll be refunded most of the holding deposit, less a small amount. If you back out at the very end, right before the tenancy agreement is signed, you'll most likely lose all of the holding deposit. If you're backing out of a tenancy because of a dire situation or emergency, please explain so when cancelling the offer.
We know this can be disappointing for renters and that's why we do everything we can during the offer process to be transparent about the home you'll be renting. From 3D Photorealism Tours and verified media to direct, instant communication with owners, we want you to know from the beginning exactly what you're getting into and better yet be happy with it. This severely reduces the chances of renters backing out of a tenancy.
Jennifer has accepted an offer and reserved the property by paying the holding deposit, a fee of one week's rent, which in this scenario is £700. If she changes her mind and decides to back out two days after the home is reserved, £200 will be deducted from her deposit. Logically, this means £500 from the deposit will be refunded to Jennifer within 24 hours of her cancelling the offer.
£700/7 days (how long the process takes on average) = £100
£100 * 2 days (how much time has passed since I've reserved the property) = £200
£700 - £200 = £500 (remaining deposit that will be refunded to me)