A holding deposit or holding fee is a payment to a landlord or letting agent to reserve a property, and you may be asked to pay it before you sign a tenancy agreement. Some landlords or agents ask for a holding deposit while they carry out pre tenancy checks. For example, referencing, affordability or credit checks.
This small financial commitment reassures the landlord or agent of your intention to proceed and complete the application and provide all documents without delay, allowing the landlord or agent to confidently remove the property from the marking and “hold” the property for you, while all the checks are completed.
Your landlord doesn’t have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed). Once you become a tenant, the holding deposit becomes a deposit which the agent must protect or part of your rent.
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Your letting agent must put your deposit in a government backed deposit protection scheme within 30-days of receiving it. This ensures your deposit is protected throughout your tenancy, and at the end of your tenancy your deposit will be returned to you providing you:
All deposit protection schemes are Government backed, the available schemes are
At the end of your tenancy the deposit must be returned to the tenants within 10 days of tenant and landlord agreeing how much they’ll get back. If the amount is in dispute the deposit is protected until the issue is settled.
Holding deposits
Your landlord doesn’t have to protect a holding deposit (money you pay to ‘hold’ a property before an agreement is signed). Once you become a tenant, the holding deposit becomes a deposit, which they must protect in accordance with the above.
At MRC we use DPS (Deposit Protection Service) rated excellent on Trustpilot with over 3000 reviews.
For more information visit https://www.gov.uk/tenancy-deposit-protection