Holding Deposit

A Holding Deposit is a temporary payment made by a prospective tenant to reserve a property while background checks, credit checks, and referencing are being completed.

Under the Tenant Fees Act and the The Renters' Rights Act, a holding deposit is legally capped at a maximum of one week's rent. Once paid, the landlord or letting agent must stop marketing the property to other applicants.

Key Rules

• The One-Week Cap: The payment cannot exceed the equivalent of one week of the advertised Monthly Rent.
• The 15-Day Deadline: Landlords have 15 days from receiving the funds to complete referencing and finalize the written terms for the Assured Periodic Tenancy. This window can be extended if both parties agree in writing.
• Refunding the Money: If the application is successful, the holding deposit is usually rolled into your main Deposit or used toward your first payment of Monthly Rent.

Frequently Asked Questions

Under what circumstances can a landlord keep my holding deposit?

A landlord or agent can only keep your holding deposit if you voluntarily withdraw your application, fail a Right to Rent check, provide intentionally false or misleading information, or fail to take reasonable steps to sign the agreement before the 15-day deadline.

What happens if the landlord decides not to rent to me?

If the landlord pulls out of the deal for reasons unrelated to your honesty or cooperation, they must refund 100% of your holding deposit within 7 days.

Can a landlord ask for extra rent upfront alongside a holding deposit?

No. Under the The Renters' Right Act, landlords cannot ask for or accept any advance rent before the tenancy agreement is signed, and rent in advance is capped at a maximum of one month.