This Landlord’s Holding Deposit Agreement is for use by a private sector
landlord in Wales 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 Renting Homes (Fees etc.) (Wales) Act 2019 (“the Act”) (which affects
Wales only) introduced new rules regarding holding deposit in Wales. Not
all landlords collect holding deposits but if one is collected, it is a
good idea to have a written agreement.
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
the Act. Guidance published by the Welsh Government states that in order to
calculate the week’s rent, the monthly rent should be divided by 4.35.
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). If the holding deposit is to be applied to the
security deposit, then this must be protected within a tenancy deposit
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.
If a landlord or letting agent wants to rely on the exception to repayment,
certain information must have been provided by the letting agent (or
landlord) to the tenant before the holding deposit was paid.
This template agreement has been updated to incorporate the requirements relating to the specified information which must be provided before taking a holding deposit in Wales from the 28 February 2020 as set out in The Renting Homes (Fees etc.) (Holding Deposit) (Specified Information) (Wales) Regulations 2019.
Any breach of the Act is an offence and is prosecutable in the magistrates’
court and the offender will be liable to a fine (not subject to a statutory
limit). The enforcement authority may offer the offender a civil fixed
penalty of £1000 for certain offences as an alternative to prosecution but
this is entirely at its discretion.
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 (Wales) which can be
used by letting agents collecting holding deposits on behalf of landlords
in Wales and it can be found in the Residential Lettings Terms and
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