Create an initial holding deposit form to take a holding deposit for your property from prospective tenants (known as ‘contract holders’ in Wales) to reserve the property. For the avoidance of doubt,... ... Read more
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How to Make an Initial Holding Deposit Form
Create an initial holding deposit form to take a holding deposit for your property from prospective tenants (known as ‘contract holders’ in Wales) to reserve the property. For the avoidance of doubt, references to ‘tenants’ also apply to ‘contract holders’ unless otherwise specified.
For use in England and Wales only.
An initial holding deposit form is a document used when an initial holding deposit is taken by a landlord (or agent) to reserve a property for a prospective tenant. In addition to the terms attached to the initial holding deposit (and its potential return), it sets out certain details in relation to the proposed tenancy agreement.
Use this initial holding deposit form:
where you are a landlord or an agent acting on behalf of a landlord
to take a holding deposit from up to 4 prospective tenants
only when the property is in England and Wales
This initial holding deposit form covers:
the prospective tenant(s)
the prospective landlord
the landlord’s agent (if there is one)
the prospective property
the holding deposit amount
other money payable by the tenant before the start of the tenancy (eg security deposit and rent in advance)
the last date to sign a tenancy agreement
the terms attached to the return of the holding deposit
Using an initial holding deposit form helps ensure that you (as a landlord or landlord’s agent) comply with the necessary requirements regarding holding deposits while helping you ensure early commitment from prospective tenants.
A holding deposit is a deposit requested by a landlord (or letting agent) to hold a property for a prospective tenant and take the property 'off the market'. This is to hold the property for the tenant prior to checks being made and the tenancy contract being signed and is designed to provide reassurance that the tenant is serious about renting the property.
Under the Tenant Fees Act 2019, the maximum you can ask a tenant for is one week’s rent. If there is more than one tenant and they are all jointly liable for the rent, you should charge them the amount they all owe together. For example, if two tenants pay £200 a week, you can charge them a £200 holding deposit, not £200 each. Read Holding deposits for more information.
A holding deposit is different from a security deposit, as it is payable before a tenancy is entered into. A holding deposit is typically paid to reserve the property while a security deposit is a payment from tenants to cover any damages to the property during the course of the tenancy. A security deposit, unlike a holding deposit, needs to be registered in a Government-approved deposit protection scheme.
Where a letting agent takes a holding deposit on behalf of a landlord, the deposit must be protected through membership of a client money protection scheme.
Under this initial holding deposit form, the holding deposit forms part of the security deposit, if a Tenancy agreement is entered into. This deposit will then need to be protected in a deposit protection scheme.
The deadline for agreement is the last date on which the Tenancy agreement can be signed. This must typically be 15 days from the day the initial holding deposit is received by the landlord or their agent unless the parties have agreed to extend this deadline.
If a holding deposit was taken but no tenancy agreement is entered into, the holding deposit should be returned to the tenant(s). The holding deposit should generally be returned within 7 days of the landlord deciding not to let the property to the tenant(s), or the deadline for agreement passing.
In certain circumstances, landlords may be able to keep a holding deposit (in part or in full). These include if a tenant:
provides false or misleading information which the landlord reasonably believes may impact their decision to offer a tenancy agreement
fails a right to rent check
withdraws from a property
fails to take all reasonable steps to enter into a tenancy agreement and the landlord or agent takes all reasonable steps to do so
The reasons for not (fully) repaying a holding deposit must be set out in writing and provided to the tenant within 7 days of the landlord deciding not to let the property or the deadline for agreement passing.
A tenant is entitled to a full refund of their holding deposit where a landlord or agent imposes a requirement that breaches the tenant fee ban.
For more information, read Holding deposits.
Last reviewed or updated 22/10/2021
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