Deposit query

[hayeschildcare]

Hi

Please could you advise what I need to do.

A parent has paid me a deposit (which was taken in November to hold a space open for her and would count towards December's fees) and the rest of Dec's fees in advance. After two weeks of trying to settle in her little boy to no avail she has decided not to continue with the contract which was due to start next week. I'm going to return December's fees to her but what about the deposit which I took to hold the space open for her?

I'm new to childminding so just a little unclear on a few things like this!!!

Many Thanks.

[tulip0803]

It depends whether you put on the contract that the deposit was non-returnable in the event that the parent decided not to take the place. If it says non-returnable on the contract then you do not have to return it. If you have not put non-returnable then you may have to return it - speak to your PLI insurer for clarification.

[Koala]

I was under the impression that a deposit was a payment for the place and if the childminder had the space available to the parent then the childminder has fulfilled her commitment and if the parent didn't take the place then the parent forfeits the deposit. I would keep the deposit and refund fees. A deposit is financial security to commitment - If the commitment isn't honored the deposit is lost. Why else would you take a deposit.

If the deposit was to save the space and you provided a place for the lo and parent changed their mind (no matter what reason) then the deposit is forfeited.

I always tell people the deposit is non refundable and confirm in writing once a deposit has been placed but I would have thought personally if I had paid a deposit and I changed my mind - no matter what - I would loose my deposit.

[Mouse]

I agree with Tulip, check with your insurance company. They'll want to know how it is written on the contract.

If you say the deposit is non-refundable, you may get to keep it, but if you say it's towards the first months fees and they don't come for the first month, you may have to pay it back.

I would at least want to charge for any settling in sessions.

[bunyip]

I agree with Tulip.

Strictly speaking, a deposit has to be returned unless your contract states it is non-refundable, and outlines the terms under which it may be withheld.

We can't assume the client knows the terms of the deposit unless we put it in writing, especially as CMs use deposits for different purposes, eg. : to ensure the child starts with you; to ensure they are still there after a month's settling-in; to ensure they get paid for final fees when notice is given; all sorts of reasons.

Taking what the OP says at face value, I'd say the parent has started the child with the CM, so the stated purpose for the deposit has been fulfilled (ie. to hold a space open for her) and therefore the deposit should be returned. I'd say the CM is obliged to return the deposit and only charge fees for the actual days when care was provided. But I'd need to see the contract to work out a more definitive answer.

Personally, I take a deposit at the time of booking. It is refundable if the child is still in my care once the settling-in period is complete. I therefore use it as credit against the second month's fees, not the first month's. I insist on payment in advance, so I'm never caught out working for free. But I admit I'm still exposed to the possibility a client giving notice at the end of the month and not using/paying off the notice period.

[Simona]

There is a difference between a deposit and a retainer to keep a child's space open

A deposit, usually 4 weeks, is kept during the time of care and 'refunded' at the end when notice is given...the same as when renting a property...the landlord keeps the deposit until the end
A deposit is also a buffer should parents not pay fees

A retainer is paid to keep a space for that child...this is not refundable and is not a payment against 'future childminding' fees...Pacey contracts used to be very clear on this.

A family may want the space for February but you have the space now so they pay the retainer and you guarantee the space for them

I know we do things differently but it is worth knowing the difference between the 2 and understand what they are for.