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What is a holding fee or holding deposit?

  • Updated
Once you have accepted the tenant's offer you are able to request that a holding deposit is paid by the tenant, this amount is paid before the referencing step and is paid direct to you as landlord. You can only hold one holding deposit so once this is taken no other viewings or lettings activity should be conducted until you accept or decline the current tenants application.
 
We would always recommend the landlord provides at least 15 days time between taking a holding deposit and the presumed start date of a tenancy to allow time for all the relevant checks to be completed.

 

How much can I take as a holding deposit? 

A holding deposit can only be a maximum of one weeks’ rent for the property you are advertising.

To calculate this you should take the monthly rental figure 'R' and do the following sum:

R X 12 / 52 = 1 weeks rental sum to take as holding deposit

 

When must a holding deposit be refunded in full?

Where the tenancy does not go ahead, but the applicant was truthful and timely in responding to information requests, then the money must be repaid in full within 7 days of the deadline being reached or the landlord backing out.

Repayment does not need to be in full if;

  • the applicant backs out before the tenancy agreement is granted;
  • fails right to rent checks and it was not reasonable for the landlord or agent to know they would fail;
  • the tenant has provided false or misleading information which would impact on the decision to let the property to them;
  • the landlord tries their best to get the information needed to proceed but the applicant fails to provide it within the 15 days;

Landlords and agents who choose to retain a holding deposit should protect themselves by making sure they have written evidence that they asked relevant questions on earnings, etc that will have an impact on their decision making in granting a tenancy. The NRLA's tenancy application form is ideal for collecting this evidence.

 

For further information on holding deposits, including your legal obligations, please visit this page: https://www.nrla.org.uk/resources/pre-tenancy/holding-deposit-form .

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