A unit holding fee is required when there is an extended period of time in between lease signing and the actual move in date of the tenant. 

Once the lease is signed and the holding fee is collected the unit is taken off of the market and held until the move in date of the tenant.

If the tenant decides not to move into the property for any reason the holding fee is then forfeited to reimburse the property owner for costs associated with holding the property for the tenant. 

If the tenant takes possession of the property on the agreed upon move in date the unit holding fee is automatically converted into the security deposit for the tenant.