Landlord’s Holding Deposit Agreement for AST (England)
This Landlord’s Holding Deposit Agreement is for use by a private sector
landlord in England when collecting a holding deposit prior to entering
into an assured shorthold tenancy agreement.
This Template Agreement acknowledges receipt of a holding deposit, it
confirms that the landlord will not let the property to any other person
until this agreement is cancelled, or expires (and the tenancy agreement
has not been entered into) and it sets out when the holding deposit is to
be repaid and retained.
The Tenant Fees Act 2019 (“the Act”) (which affects England only)
introduced new rules regarding holding deposits. Not all landlords collect
holding deposits but if one is collected, the Act highlights the importance
of having a written agreement.
Landlords must not collect more than one holding deposit per property at
any one time otherwise this will amount to a prohibited payment and the
landlord will be in breach of the Act.
The Act introduced a cap on the amount of a holding deposit to be collected
from prospective tenants to reserve a property. A landlord must not collect
more than one week’s rent. If a landlord collects more than one week’s
rent, this will be a prohibited payment and a landlord will be in breach of
Under the Act a holding deposit must be refunded within 7 calendar days of
the tenancy being entered into (although there is provision for the holding
deposit to be applied to the first instalment of rent or towards any
permitted security deposit subject to the consent of the prospective
tenant). If the prospective tenant consents to the holding deposit being
applied to the security deposit, then this must be protected within a
tenancy deposit protection scheme.
If the parties (both acting reasonably) fail to enter into a tenancy
agreement within 15 days of receipt of the holding deposit paid by the
Tenant (‘the Deadline for Agreement’) (unless an extension is agreed), the
Landlord must repay the holding deposit to the tenant within 7 days of the
Deadline for Agreement.
The template agreement lists the specific circumstances when the holding
deposit can be retained. You must write to the prospective tenants within 7
days if the holding deposit is being retained otherwise you forego the
right to retain the deposit.
Landlords can be subject to a fine of up to £5,000 for a first offence. If
a further offence is made within five years of the first, this will be a
criminal offence and a landlord could be liable for an unlimited fine. Some
local authorities may impose a financial penalty of up to £30,000 as an
alternative to prosecution.
Landlords will also not be able to evict a tenant using the section 21
eviction procedure to regain possession of their property until they have
repaid an unlawfully retained holding deposit.
There is a Letting Agent’s Holding Deposit Agreement (England) which can be
used by letting agents collecting holding deposits on behalf of landlords
in England and it can be found in the Residential Lettings Terms and
The Renting Homes (Fees etc.) (Wales) Act 2019 which is due to come into
force on the 01 September 2019 contains similar provisions regarding
holding deposits. A specific holding deposit agreement for use in Wales
will be produced prior to this act coming into force.
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