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How much you can be charged on a holding deposit for a rental property?

How much you can be charged and when a holding deposit should be returned.

 

What is a holding deposit?

A holding deposit is a payment to a landlord or agent to reserve a property.

In most cases, you should get the money back if the landlord decides not to rent to you.

Only pay a holding deposit if you're serious about taking on the tenancy. The landlord or agent might keep the money if you decide not to go ahead.

Most other charges such as reference fees are banned from 1 June 2019.

How much you can be charged?

From 1 June 2019, a holding deposit can’t be more than 1 week’s rent.

How to calculate:

Monthly rent x 12 ÷ 52 = maximum holding deposit

Ask the landlord or agent to refund any money you've paid above this limit.

You can report them to trading standards at the council if they refuse and claim back any excess by applying to a tribunal.

What should happen when you pay

The landlord or agent should stop advertising the property.

They are not allowed to take a holding deposit from more than one person for the same property at the same time.

Entering into a tenancy agreement

You have 15 days from when you pay a holding deposit to enter into a tenancy agreement. This is called the deadline for agreement.

You can agree a different deadline with the landlord or agent in writing.

If you enter into a tenancy agreement, the landlord can either:

 

Your landlord or agent can normally keep the holding deposit if you either: