Holding Deposit
Step 1: Paying a Holding Deposit
– When you pay a holding deposit, you have 15 days to agree on a tenancy.
– The deadline can be adjusted if both parties agree in writing.
Step 2: Signing a Tenancy Agreement
– If you decide to sign a tenancy agreement, the landlord or agent has two options:
– They can return the holding deposit within 7 days.
– They can put it towards a security deposit or first rent payment, but only with your written consent, such as a ‘Holding Deposit Agreement’.
Step 3: Not Proceeding with the Tenancy
– If you choose not to proceed with the tenancy, the landlord or agent may retain the holding deposit if:
– You provide false or misleading information.
– You fail a right to rent check.
– You withdraw from the tenancy agreement.
– You fail to take reasonable steps to enter into the tenancy agreement.
– The landlord or agent must provide a written explanation if they withhold the holding deposit
Step 4: Non-Return of Holding Deposit
– If the holding deposit is not returned or a written explanation is not provided within 7 days, you have the right to take legal action to recover the money.
Important Note:
– A holding deposit is different from a security deposit, which is a larger amount paid to protect the landlord against damages or unpaid rent during the tenancy.
Security Deposit
Step 1: Understand the Deposit
– Typically, you and your fellow tenants will pay a single deposit to the letting agent before moving in.
– This deposit is considered as one for the entire tenancy.
– The landlord has the right to make deductions from the entire deposit at the end of th e tenancy, even if only one tenant is responsible for damage or unpaid rent.
– Note that a tenancy deposit is different from a holding deposit, which is paid to reserve a property
Step 2: Selecting a Lead Tenant
– All joint tenants should be informed about where the deposit is protected.
– Deposit protection schemes often request one person to be responsible for:
– Communicating with the deposit protection scheme.
– Raising disputes regarding deductions from the deposit.
– Some schemes return the entire deposit to the lead tenant, who then repays the other tenants.
– When paying the deposit, you can collectively choose a lead tenant among yourselves and request the landlord or agent to protect the deposit in that person’s name.
– If you do not decide on a lead tenant, the landlord may choose one, or the scheme may only deal with the first tenant to contact them.
– Keep the lead tenant’s contact details as the deposit will not be returned until after the tenancy ends.
Step 3: Deposit Protection Schemes
– If you have an assured shorthold tenancy (which is the most common type for private renters), your agent must protect your deposit with a scheme.
– In the case of joint tenants, the deposit is usually protected as a single deposit.
– The scheme may require you to choose a lead tenant as a named contact for the end of the tenancy.
– The lead tenant will be the person the scheme contacts when the tenancy concludes.
– It is possible for the landlord to agree to protect each share of the deposit sep arately.