Can I charge a retainer fee for a place I don't yet have available?

**Crumpy** · 19-12-2011, 03:21 PM

I'm just starting out and I have 2 children of my own- both under 5 and one is currently 10 months old. I have a prospective parent coming to see me about a place from the beginning of Feb for her 11 month old when my 10 month old will be 12 months old, therefore freeing up my one under 1 place. Can I charge a retainer fee from now to keep the place open even though, technically I don't have an under 1 place to offer until the start of Feb?

Thanks

**uf353432** · 19-12-2011, 03:25 PM

No not really good practise - you can only charge a retainer for a space that is available to prevent other people from having the space. You could charge a deposit though

**Crumpy** · 19-12-2011, 03:53 PM

Thought as much! So, I could charge a deposit from now to keep open a space? Isn't that just the same though? Finances really aren't my thing!

**uf353432** · 19-12-2011, 04:15 PM

You can charge a deposit which is a one off payment to secure the childs place. You can keep the deposit until the end of the contract less any monies that are due to you if a parent didn't pay all of their final invoice.

So for example I charge a weeks deposit. The deposit stays on account when the child leaves my care I return the deposit back to them - if they had incurred any costs since the last invoice or had failed to pay their last invoice - their deposit would be used for any monies I am owed.

Bit like renting a flat from a landlord you get the full deposit back as long as you paid all the rent and left it in a reasonable condition.

If you wanted you could say that the deposit is not refundable in the event that they don't take the place with you - that could be classed as compensation for loss of earnings because you turned down other enquiries because they wanted the space. But if you decided to not continue with the contract by the start date - you would need to refund the deposit immediately.

**rosebud** · 19-12-2011, 04:22 PM

I would take a deposit but it would act as the first months fees. So parents pay a full months fees now to reserve the space, if they change their minds this is non-refundable but if all goes as planned they have already paid for the first month. This ensures that they are fully commited to taking the place and that you are protected should they change their minds and have turned work down in the meantime but they are not paying for something which you can't provide. (as with a retainer)

**rickysmiths** · 19-12-2011, 04:56 PM

I take a four weeks fees Deposit when a Contract is signed to secure the place for the time required. If they then don't use the space they loose the deposit. If I can't offer the space when the time comes I would return the deposit.

When the contract starts I keep the deposit until the end of the contract and use it to cover the four weeks fees for the notice period. This means a parent can't leave without paying the notice period and it means being paid in advance and holding a four week fees deposit insures you against non payment and gives a couple of weeks to get things sorted before you are out of pocket.

I also say in my policy now, that they loose the deposit in full if they leave within the first 6 months because we had a spate of parents earlier in the year using cms as a stop gap while waiting for a nursery place. I also alter the deposit when I revise a contract for a change of hours. If they reduce hours in the first 6 months they also loose that portion of the deposit. If they increase they top it up to represent 4 weeks fees.

**miffy** · 19-12-2011, 05:55 PM

Originally Posted by rosebud

I would take a deposit but it would act as the first months fees. So parents pay a full months fees now to reserve the space, if they change their minds this is non-refundable but if all goes as planned they have already paid for the first month. This ensures that they are fully commited to taking the place and that you are protected should they change their minds and have turned work down in the meantime but they are not paying for something which you can't provide. (as with a retainer)

That is exactly what I do

Miffy xx

**jane5** · 19-12-2011, 07:20 PM

I do what rickysmiths says.

Now I may be wrong but I think that you could charge a retainer in this case because even though you only have 1 place for an under 1 year old and you are using it for your own child, you still are saving the under 5 space for this family and you could fill it with some one else.

Some body else may say differently but I think you could charge because I believe Ofsted will let you have a variation for under 1's for new business.

**Playmate** · 19-12-2011, 08:06 PM

Personally I have never charged a retainer only a deposit, but I have never held a place open for longer than 8 weeks. As the child is due to start in 6 -7 weeks you are unlikely to turn other work away in that period, especially over Christmas. I think it would be unfair to charge a retainer, a deposit would be much better practice

**Crumpy** · 19-12-2011, 08:31 PM

Thanks so much people, I am going to go with the deposit to be used as the first month's fees - this is all hypothetical at the moment though as I don't even know if they want to take the place or not!

**rickysmiths** · 19-12-2011, 08:57 PM

[QUOTE=Crumpy;1026281]Thanks so much people, I am going to go with the deposit to be used as the first month's fees - this is all hypothetical at the moment though as I don't even know if they want g

Remember that doing it this way you have nothing in hand for potential non payment or to insure you are paid for your notice period. You only have to read loads of threads on here to see how many times parents try to leave without paying for notice.