A holding deposit is money paid before the tenancy is agreed. This guide follows that payment from receipt to refund, lawful retention or transfer, so you can identify what should happen to it at each point.
Key steps for tenants
The cap is one week’s rent for the property.
The usual deadline for agreement is 15 days unless changed in writing.
A refund or lawful transfer into rent or deposit should be documented.
Ask for written reasons if any amount is withheld.
Check the amount and deadline
The maximum holding deposit is one week’s rent for the property as a whole, even when several tenants apply together. The default deadline to enter a tenancy agreement is 15 days after payment, unless you and the landlord agree a different date in writing. Ask whether the listing will be withdrawn while checks take place.
Know when it should come back
It must generally be refunded if the landlord decides not to proceed or the agreement is not completed by the deadline through no fault of yours. With your consent, it can instead go towards the first rent payment or tenancy deposit once the agreement is signed. It is not automatically an extra fee.
Understand the limited reasons for retention
A landlord may be able to retain it if you withdraw, fail a Right to Rent check, do not take reasonable steps to enter the agreement, or give materially false or misleading information relevant to suitability. They must give the reason in writing within the required time. A small irrelevant error is not a blanket reason to keep it.
Challenge a disputed deduction
Ask for the written reason, the dates and the evidence. Keep the advertisement, application, emails and payment record. If you disagree, contact the local council or seek advice about a First-tier Tribunal application.
