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 .