A holding deposit is not a general compensation fund for a landlord's time. The Tenant Fees Act sets the circumstances and process for keeping it.
Establish the timeline
- Record when the deposit was received and the usual 15-day agreement deadline, or a different deadline properly agreed in writing.
- Keep evidence of the steps both parties took to enter the agreement.
- Check the one-week cap and whether another holding deposit has been taken for the same property.
Identify the actual reason
- Distinguish the landlord withdrawing, the applicant withdrawing, failure to take reasonable steps and materially false or misleading information.
- A referencing result may reflect affordability or missing evidence rather than false information.
- Check whether the landlord's own conduct or changed terms affect the right to retain.
Complete the required process
- Apply the relevant refund and written-reasons deadlines, including the applicable seven-day requirements.
- If applying the sum to rent or the tenancy deposit, obtain the agreement required and record the transfer.
- Retain the calculation and communication in case the applicant challenges it.
Example: the landlord changes the rent
A fictional landlord raises the proposed rent after accepting a holding deposit and the applicant declines. Review the statutory refund position and the landlord's conduct. Do not describe the outcome simply as the applicant changing their mind.
What to do
- Record receipt and the applicable agreement deadline.
- Establish why the tenancy did not proceed.
- Refund or give the required written retention explanation within the relevant timescale.
Evidence to keep
- Holding-deposit terms, receipt and pre-tenancy correspondence.
- Deadline agreement, reason for the outcome and refund or retention notice.
Sources and guidance
- Tenant Fees Act: current statutory guidanceUK Government · checked 20 October 2026
- Rent in advance and depositsUK Government · checked 20 October 2026