This Letting Agent’s Holding Deposit Agreement is for use by a letting
agent in Wales when collecting a holding deposit prior to entering into an
assured shorthold tenancy agreement on behalf of the landlord. The letting
agent must have the authority and consent from the owner of the property
prior to entering into this agreement on its behalf.
This Template Agreement acknowledges receipt of a holding deposit, it
confirms that the letting agent 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 deposits in Wales. Not
all agents 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 letting agent must not
collect more than one week’s rent. If a letting agent collects more than
one week’s rent, this will be a prohibited payment and the agent 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
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 (acting reasonably) fail to enter into a tenancy agreement
within 15 days of receipt of the holding deposit paid by the prospective
tenant(s) (‘the Deadline for Agreement’) (unless an extension is agreed),
the holding deposit must be repaid within 7 days of the Deadline for
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. The prescribed information and the way in which it must be
provided will be specified in future regulations. The Welsh Government have
powers to make regulations on the prescribed information in the future.
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.
Agents will also not be able to evict a tenant on behalf of the landlord
using the section 21 eviction procedure to regain possession until they
have repaid an unlawfully retained holding deposit.
There is a Landlord’s Holding Deposit Agreement (Wales) which can be used
by landlords collecting holding deposits and it can be found in the New
Tenancy Forms, Letters and Checklists for Residential Landlords subfolder.
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