Holding deposits

When a tenant shows interest in a property, landlords and agents will want, or need, to carry out certain checks before a tenancy can start. This often means that the tenant(s) will be asked to pay a holding deposit, to reserve the property.  

This guide is a summary of the holding deposit rules, which can be found in the Tenant Fees Act 2019 and its detailed guide here.  

Landlords will usually have two weeks (14 days ) to enter into a tenancy agreement with a tenant once a holding deposit has been received by the landlord or agent. This is before the ‘deadline for agreement’, which is the 15th day after the holding deposit has been received. However, you may agree a different ‘deadline for agreement’ with the tenant in writing (which could be more or less than 14 days ).

A landlord or their agent must:

• start the tenancy by the 15th day after receiving the holding deposit has been received. This is called the ‘deadline for agreement’ date or
• agree a different ‘deadline for agreement’ date with the tenant, in writing (this can be more or less than 14 days)

Enforcement and penalties:

• Unlawfully keeping part, or all, of a holding deposit is a civil offence with a penalty of up to £5,000
• Taking a prohibited payment can also lead to a penalty of £5000 for each payment
• Landlords are unable to serve a notice to repossess their property  until the unlawfully held fee has been returned
• Trading standards or the First Tier Tribunal (FTT) can enforce the Tenant Fees Act against landlord and agents

Here are some examples of decisions made.