Custodial We hold the deposit. Replacement Replace the deposit. Login Join now. Holding deposits. When can you take the holding deposit? Is there a limit on the amount of a holding deposit? What happens to the holding deposit when the tenant moves in? Back to Content Hub. Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website.
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Get new laws directly to your inbox. A full guide to how holding deposits work can be found here. Landlords are only allowed to keep the holding deposit for 15 days, unless both parties agree another deadline in writing. If the landlord has failed to accept or reject the application by the deadline, then the money must be returned to the tenant in full.
If the landlord is happy with the referencing report, they will go ahead with the tenancy. In this case, the tenany will get the holding deposit back.
The money is usually put towards the other move-in costs; namely, any rent paid in advance and the tenancy deposit.
Rather, the value is simply taken off the amount they need to pay for the other move-in moneys. This is normal and nothing to worry about. If the landlord decides not to proceed, then the holding deposit should be refunded in full. Landlords are no longer allowed to deduct any fees or costs of referencing from your holding deposit. It goes to the landlord or agent to cover them against any loss of time and money. There is a chance they will refund the tenant some or all of the deposit, but they may be entitled to keep it.
It is, of course, worth asking them to return it, as they may be happy to. The tenancy deposit is sometimes called a security deposit. It a sum paid at the start of a tenancy. It is refunded to the tenant at the end of the tenancy, but the landlord can make deductions from it to pay for:. When the tenant pays the tenancy deposit, the landlord must register it with a government-approved deposit protection scheme.
This information is called the prescribed information. The size of the tenancy deposit is limited by the Tenant Fees Act. The landlord must refund the excess amount if renewing the tenancy, however. Once the agent or landlord receives the deposit, they'll remove the property from the market so that no new renters can enquire.
Essentially, the holding deposit reserves your potential new home while you go through all the details related to renting a home. And once you've passed credit checks and signed the AST, you're ready to move into your new place. At this point, the holding deposit will be deducted from your first month's rent more on this later.
Remember where you found your property perhaps it was even on Movebubble? Lots of renters also probably saw it, and many of them may have viewed it too, either physically or via video. And that property was also likely advertised across plenty of websites.
With all those eyes on it, there's bound to be a lot of ongoing interest, especially if it's a high-quality home. After agreeing on a deal, you want to stop those prying eyes from looking at your place-to-be. And paying a holding deposit does just that. Think of it as paying a reservation fee to make sure that it's yours and no one else's.
There's no official legislation that says you need to pay a holding deposit, and a smattering of landlords may not even ask for one. Some Build-to-Rent operators also offer holding deposit-free renting. However, it's common practice to pay holding deposits in the rental market. If you refuse to pay one, the landlord has every right to renege on the agreed offer and let it to another renter.
Paying a holding deposit is a form of guarantee that you will move into the property should referencing go smoothly. If all goes well, you will get your deposit back, though there are different methods for which you'll receive it.
You will need to pay one month's rent upfront if you sign the AST and successfully move into the property. Should you fail the reference checks, are unable to find a guarantor, or the landlord decides not to go ahead with the deal, you will also be liable to receive the full amount of your deposit back. Should anything go wrong with the rental before you move in that isn't your fault, you're entitled to your holding deposit.
However, you won't get your holding deposit back if you are the one who decides against moving in.
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