Please contact us to join our property mailing list and we
can keep you updated on our latest properties. Should you wish
to proceed with an application a simple guide to fees are set
out below.
Holding Deposit - One weeks rent.
(this fee will go towards your deposit or first rent payment)
What Is a Holding Deposit?
The holding is also sometimes called a holding fee. The rules for holding deposits are set in the Tenant Fees act, which we will call the TFA.
A holding deposit is a refundable payment made by the tenant to the landlord or their agent. The holding deposit should only be placed once the general terms of the let are agreed. That means:
- the move-in date
- the terms of the tenancy agreement
- the rent
- the tenants
- the length of the fixed term
- the rental period (e.g. monthly, weekly)
If the landlord wishes to change any of these things after you have paid the deposit, then you can refuse. If this prevents the tenancy going ahead, then you should receive the holding deposit back in full.
One you have paid the holding deposit; the tenancy is taken to be agreed subject to referencing. The landlord should not proceed with other tenants, and must not accept any other holding deposits.
The landlord or agent will hold your holding deposit while they run any referencing checks they may require. They may not charge you for referencing.
What Happens to My Holding Deposit?
Once the holding deposit is placed, three things can happen:
- the tenancy goes ahead
- the tenancy doesn’t go ahead because the landlord pulls out
- The tenancy doesn’t go ahead because the tenant pulls out
It's important to get the terms of the holding deposit in writing so that everyone knows what will happen in each of the three scenarios and how your holding deposit will be treated.
Landlords are only allowed to keep the holding deposit for 15 days, unless both parties agree another deadline in writing. If the landlord has failed to accept or reject the application by the deadline, then the money must be returned to the tenant in full.
1. The Tenancy Goes Ahead
If the landlord is happy with the referencing report, they will go ahead with the tenancy. In this case, the tenancy will get the holding deposit back.
The money isn’t usually returned to the tenant’s bank account, however. The money is usually put towards the other move-in costs; namely, any rent paid in advance and the tenancy deposit.
So, in practice, tenants don’t actually get the holding deposit returned. Rather, the value is simply taken off the amount they need to pay for the other move-in moneys. This is normal and nothing to worry about.
2. The Tenancy Doesn’t Go Ahead Because the Landlord Pulls out
If the landlord decides not to proceed, then the holding deposit should be refunded in full. Landlords are no longer allowed to deduct any fees or costs of referencing from your holding deposit.
3. The Tenancy Doesn’t Go Ahead Because the Tenant Pulls out
If you pull out, the landlord/agent can claim the holding deposit as forfeit. In this scenario, the tenant doesn’t get the deposit back. It goes to the landlord or agent to cover them against any loss of time and money.