Letting Agent’s Holding Deposit Agreement (England)

This Letting Agent’s Holding Deposit Agreement is for use by letting agents in England when collecting a holding deposit from a prospective tenant prior to entering into a tenancy agreement. The letting agent should obtain the authority and consent of the landlord/property owner before entering into this Agreement. 

What This Agreement Does 

This Template:

• Acknowledges receipt of a holding deposit;
• Confirms that the property will not be marketed to other prospective tenants while the Agreement remains in place;
• Sets out the circumstances in which the holding deposit will be repaid or retained; and 
• Establishes a clear period for entering into a tenancy agreement.

The Tenant Fees Act 2019

The Tenant Fees Act 2019 (“the Act”), applies in England and imposes strict rules regarding holding deposits. While not all agents choose to take a holding deposit, where one is taken, a written agreement is strongly recommended. Key provisions of the Act include:

•  A holding deposit must not exceed the equivalent of one week's rent. Any amount above this will constitute a prohibited payment and a breach of the Act. 
• One holding deposit may be taken per property.
• A holding deposit must normally be repaid within seven days beginning with entry into the tenancy, unless the payer consents to its use towards the first rent payment or tenancy deposit. For an assured tenancy, do not require, invite, encourage or accept any prohibited rent payment before the tenancy has been entered into by both parties; the permitted initial-rent window is after signing and before the first day of the tenancy. For more information on the Renters’ Rights Act please refer to the Guidance: Renters’ Rights Act for Residential Landlords
•  If the person who paid the holding deposit consents to its use towards a tenancy deposit, the amount applied is treated as received on the date the tenancy agreement is entered into for the purposes of section 213 of the Housing Act 2004. Where that section applies, comply with the authorised scheme’s initial requirements and provide the required prescribed information within the statutory 30-day period.
• The Deadline for Agreement is the 15th day of the period beginning with the day the Holding Deposit is received. Any different deadline must be agreed with the Prospective Tenant(s) in writing. Unless a statutory retention exception applies, repay within seven days beginning with the relevant event: entry into the tenancy, the landlord’s decision before the deadline not to proceed, or the deadline if no tenancy is entered into. Written reasons for retention must be given to the payer within the statutory seven-day period. 

An enforcement authority may impose a financial penalty of up to £5,000 for a breach within section 8 of the Tenant Fees Act 2019. A further breach of section 1 or 2 can be a criminal offence only where the section 12 conditions are met, including a qualifying prior penalty or conviction for a different breach of the same section within five years. An offence can lead to an unlimited fine and may support a banning order; the authority may instead impose a financial penalty of up to £30,000. Unlawfully retaining a holding deposit does not become that criminal offence merely because it happens again. These are maximum penalties, not automatic fines.

Compliance is therefore essential for all letting agents operating in England. 

Why Use This Agreement?

Using a professionally drafted holding deposit agreement helps:

• Ensure compliance with current legislation;
• Reduce the risk of disputes with prospective tenants; 
• provide transparency around payments and deadlines; and 
• support a smoother transition into the tenancy. 

When Is This Template Not Suitable

If you are a landlord, you should download the Landlord’s Holding Deposit Agreement(England).

For landlords and lettings agents in Wales please download the Holding Deposit Agreement for Occupation Contract (Wales). 

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