MAKE YOUR FREE Initial Holding Deposit Form
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What is an Initial Holding Deposit Form?
An Initial Holding Deposit Form is used when an initial holding deposit is taken by a landlord (or agent) to reserve a property for a prospective tenant (or ‘contract holder’ in Wales). Initial Holding Deposit Forms set out the terms attached to an initial holding deposit and its potential return, and provide certain details regarding the proposed Tenancy agreement.
For use in England and Wales only.
When should I use an Initial Holding Deposit Form?
Use this Initial Holding Deposit Form:
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if you are a landlord or an agent acting on behalf of a landlord
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to take a holding deposit from up to 4 prospective tenants
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only when the property is in England or Wales
Sample Initial Holding Deposit Form
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INITIAL HOLDING DEPOSIT FORM
Details
Proposed ’s name:
- Proposed ’s current address: , ,
(the )
Property Details
Address of the prospective property (the Property): , ,
Proposed move-in date:
Total annual rent: £
Total Initial Holding Deposit: £
Landlord Details
Proposed landlord's name:
(the Landlord)
Tenancy Agreement Details
Last date for the parties to sign the tenancy agreement:
Breakdown of Initial Funds
Security Deposit amount: £
Rent in advance: £
Less the Initial Holding Deposit: £
Balance due on or before the tenancy agreement: £
Special Conditions
- This agreement is not intended to create a tenancy in respect of the Property and it does not oblige any party to enter into a tenancy agreement. Any party may cancel the reservation of the Property. Therefore, the Initial Holding Deposit is not a tenancy deposit subject to protection under the Tenancy Deposit Protection Scheme in accordance with the provisions of the Housing Act 2004.
- The acknowledges the receipt of the Initial Holding Deposit to reserve the Property.
- The Landlord shall not let the Property to anyone other than the . This will remain the case until the earlier of the:
- reservation being cancelled by either party;
- last date to sign the tenancy agreement.
- The Landlord will not take any additional Initial Holding Deposits from any parties other than the . This will remain the case until the Initial Holding Deposit has been:
- partially or fully refunded to the ; or
- allocated to the Landlord where these Special Conditions or Schedule 2 of the Tenant Feest Act 2019 allows for this.
- If a tenancy agreement is entered into between the parties in respect of the Property, the Initial Holding Deposit will be credited in its entirety against the rent payable under the tenancy agreement.
- If the reservation has been cancelled by either party, or a tenancy agreement in respect of the Property is not signed by the last date for signing of the tenancy agreement, the Initial Holding Deposit shall only be repaid in full as provided below.
- The Initial Holding Deposit will only be repaid in full if:
- the Landlord does not accept the reservation; or
- the Landlord withdraws the Property and cancels the reservation; or
- the provided accurate information to the Landlord, and the Landlord declines to enter into a tenancy agreement before the deadline specified above; or
- all parties have taken all reasonable steps to enter into a tenancy agreement, however, the tenancy agreement was not signed by the deadline specified above. Examples of reasonable steps include, but are not limited to
- providing sufficient information to obtain and collect references;
- contacting referees in a timely fashion to allow for responses;
- performing credit checks;
- providing the Security Deposit and rent no later than the deadline for signing a tenancy agreement; and
- attending an appointment to verify the 's right to rent status
The Initial Holding Deposit will be refunded to the within 7 days of the deadline for signing a tenancy agreement, or within 7 days of the Landlord's decision if this is before the deadline for signing a tenancy agreement.
- The Initial Holding Deposit does not have to be refunded if:
- false or misleading information is provided by the which the Landlord reasonably believes may impact their decision to offer a tenancy agreement to the ; or
- the cancels their reservation before the deadline to sign a tenancy agreement and the Landlord has acted in a reasonable manner towards the ; or
- the Landlord has taken all reasonable steps to enter into a tenancy agreement by the deadline specified above and the does not take all reasonable steps to enter into a tenancy agreement. Examples of reasonable steps include, but are not limited to:
- providing sufficient information to obtain and collect references;
- contacting referees in a timely fashion to allow for responses;
- performing credit checks;
- providing the Security Deposit and rent no later than the deadline for signing a tenancy agreement; and
- attending an appointment to verify the 's right to rent status.
- If the is entitled to retain the Initial Holding Deposit (partially or in full), the reason for this and the amount retained will be communicated to the . This will be done within 7 days of:
- the deadline for signing a tenancy agreement; or
- the date on which the Landlord decides not to enter into a tenancy agreement.
This will be done in accordance with these Special Conditions of Schedule 2 of the Tenant Fees Act 2019.
- Any cancellation of the reservation by the Landlord or the must be made in writing to be effective.
The Prospective
| _________________________________ | _________________________________ |
IMPORTANT: This reservation can be cancelled at any time by the Landlords or the (or any of them). On cancellation, the consequences described above will apply as appropriate.
About Initial Holding Deposit Forms
Learn more about making your Initial Holding Deposit Form
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How to make an Initial Holding Deposit Form
Making an Initial Holding Deposit Form online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your Initial Holding Deposit Form you will need the following information:
Parties
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Is an agent acting for the landlord? If so:
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What are the agent’s details (ie legal structure and name)?
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If the agent is a company, LLP or partnership, who will sign the Initial Deposit Form on behalf of the agent?
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What are the prospective landlord’s details (ie legal structure and name)?
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If the landlord is a company, LLP or partnership, and an agent isn’t acting for them, who will sign the Initial Deposit Form on behalf of the landlord’s business?
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What are the prospective tenant’s (or tenants’) details (ie name and current address)?
Renting
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What is the address of the property?
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What is the proposed move-in date?
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What is the proposed annual rent?
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What is the initial holding deposit amount?
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What is the security deposit amount?
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How much rent will the tenant(s) need to pay in advance?
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What is the last date for the parties to sign the Tenancy agreement?
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Common terms in an Initial Holding Deposit Form
Initial Holding Deposit Forms are used to take holding deposits for a rented property from prospective tenants to reserve a property. To do this, this Initial Holding Deposit Form template covers:
Tenant details
The start of the Initial Holding Deposit Form sets out the details of all prospective tenants. This includes their names and current addresses.
Property details
This section sets out the address of the property that is being rented out by the landlord. It also details the proposed move-in date, the annual rent and the initial holding deposit amount.
Landlord details
This section sets out the name and address of the landlord.
Agent details
This section will only be included if an agent is working for the landlord. It sets out the agent’s name.
Tenancy agreement details
This section sets out the last date on which the parties can sign a Tenancy agreement subject to this holding deposit. This is known as the ‘deadline for agreement’.
Breakdown of initial funds
This section provides a breakdown of the initial funds payable. This includes any security deposit plus any rent payable in advance (ie the first rent payment) minus the initial holding deposit. The balance due on or before the start of the tenancy is set out.
Special conditions
This section provides information on the Initial Holding Deposit Form, the initial holding deposit itself, and how it should be handled. This includes:
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the landlord not agreeing to let the property to someone else unless the Initial Holding Deposit Form is cancelled or the deadline for agreement passes
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the landlord not taking a holding deposit in respect of the property from another party
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if a tenancy agreement is entered into, the initial holding deposit being credited in its entirety against the rent payable under the tenancy agreement
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details on when the initial holding deposit will be refunded in full if a tenancy agreement is not signed
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details on when the initial holding deposit will not be refunded
If you want your Initial Holding Deposit Form to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review or change the document for you, to make sure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
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Legal tips for making an Initial Holding Deposit Form
Don’t charge any prohibited fees
The Tenant Fees Act 2019 sets out lawful fees that can be charged in connection with a tenancy. Examples of lawful fees include:
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a refundable tenancy deposit (capped at a certain amount)
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utilities and council tax (if included in the tenancy agreement), and
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holding deposits (capped at 1 week’s rent)
If any prohibited fees (ie fees other than the specified lawful fees) are charged, tenants can recoup the money through the courts and landlords may be subject to a fine of up to £30,000. For more information, read Tenant fees.
Carefully calculate the holding deposit amount
To avoid charging tenants a prohibited fee in relation to a holding deposit, landlords must make sure that a holding deposit amount is no more than 1 week’s rent.
To calculate the maximum holding deposit amount, multiply the monthly rent by 12 and divide this by 52. In other words, the formula for working out the maximum you can take as a holding deposit is (monthly rent x 12) ÷ 52.
For example, if the monthly rent is £1,040 the maximum holding deposit amount is £240. This is because:
1,040 x 12 = 12,480
12,480 ÷ 52 = 240
Bear in mind that, if you rent to multiple tenants and they are jointly liable for the rent, a holding deposit can only be charged on the total monthly rent they’re liable for. This means that you cannot ask each tenant to pay the full holding deposit amount, but that they together must pay the holding deposit. In other words, if you are renting your property to 3 tenants, you can ask them to pay the £240 initial holding deposit together. You cannot ask each of them to pay £240.
For more information, read Holding deposits.
Enter into a residential lease agreement by the date specified
You typically have 15 days from receiving the initial holding deposit to enter into a Tenancy agreement with your prospective tenant(s). The deadline for agreement (ie the last date on which a tenancy agreement can be entered into) will be specified in your Initial Holding Deposit Form and can only be extended if all parties agree to this.
If you wish to enter into a tenancy agreement with your prospective tenant(s), you should do so by the agreed-upon date. If the date passes without your entering into an agreement or extending the deadline, or if either party withdraws from the agreement, you should return the initial holding deposit in full unless not entering into a tenancy agreement was the tenant’s fault.
You should let your prospective tenant(s) know that you have decided not to rent the property to them within 7 days of your making this decision, if this is before the deadline for agreement. You should always tell them by the deadline for agreement. Failing to comply with this 7-day notice requirement results in you losing the right to retain the holding deposit.
For more information, see the FAQs ‘What is ‘the deadline for agreement’?’ and ‘What if a tenancy agreement isn’t entered into after a holding deposit is taken?’.
Understand when to seek advice from a lawyer
Ask a lawyer if:
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this document doesn’t meet your needs
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you are based outside England and Wales
Initial Holding Deposit Form FAQs
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What is included in an Initial Holding Deposit Form?
This Initial Holding Deposit Form template covers:
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the prospective tenant(s)
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the prospective landlord
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the landlord’s agent (if there is one)
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the property
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move-in details
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the holding deposit amount
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other money payable by the tenant before the start of the tenancy (eg a security deposit or rent due in advance)
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the last date on which the parties can sign a Tenancy agreement
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the terms attached to the return of the holding deposit
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Why do I need an Initial Holding Deposit Form?
Under the Tenant Fees Act 2019, stringent requirements are placed on landlords (and agents) with respect to holding deposits. Using an Initial Holding Deposit Form helps ensure that you (as a landlord or landlord’s agent) comply with the necessary requirements regarding holding deposits while helping you obtain early commitment from prospective tenants. For more information, read Holding deposits.
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What is a holding deposit?
A holding deposit is a sum of money requested from a prospective tenant by a landlord (or letting agent) in return for their holding a property for the tenant and taking the property 'off the market'. This allows them to hold the property for the tenant prior to checks being made and the tenancy agreement being signed, to provide reassurance that the tenant is serious about renting the property.
Once a tenancy agreement has been successfully entered into, a holding deposit should usually be returned to the tenant or used to, for example, form part of the security deposit or the first rent payment.
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How much can a holding deposit be?
Under the Tenant Fees Act 2019, the maximum holding deposit you can ask a tenant for is the equivalent of 1 week’s rent. If there is more than one tenant and they are all jointly liable for the rent, you should charge them the amount they all owe together. For example, if two tenants pay £200 a week combined, you can charge them a £200 holding deposit, not £200 each. Read Holding deposits for more information.
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What is the difference between a holding deposit and a security deposit?
A holding deposit is different from a security deposit as it is payable before a tenancy is entered into. A holding deposit is typically paid to reserve a property while a security deposit is a payment from tenants used to cover any damages to the property during the course of the tenancy. A security deposit, unlike a holding deposit, needs to be registered in a government-approved deposit protection scheme.
When a letting agent takes a holding deposit on behalf of a landlord, the deposit must be protected through membership in a client money protection scheme.
Under this Initial Holding Deposit Form, the holding deposit forms part of the security deposit if a Tenancy agreement is entered into. This deposit will then need to be protected in a deposit protection scheme.
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What is ‘the deadline for agreement’?
The deadline for agreement is the last date on which the Tenancy agreement can be signed. This will typically be 15 days from the day the initial holding deposit is received by the landlord or their agent unless the parties have agreed to extend this deadline.
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What if a tenancy agreement isn’t entered into after a holding deposit is taken?
If a holding deposit is taken but no tenancy agreement is entered into, the holding deposit should be returned to the tenant(s). The holding deposit should generally be returned within 7 days of the landlord deciding not to let the property to the tenant(s) or the deadline for agreement passing.
In certain circumstances, landlords may be able to keep a holding deposit (in part or in full). These include when a tenant:
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provides false or misleading information that the landlord reasonably believes may impact their decision to offer a tenancy agreement
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fails a right to rent check
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withdraws their intention to rent a property
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fails to take all reasonable steps to enter into a tenancy agreement and the landlord or agent takes all reasonable steps to do so
The reasons for not fully repaying a holding deposit must be set out in writing and provided to the tenant within 7 days of the landlord deciding not to let the property to them or the deadline for agreement passing.
A tenant is entitled to a full refund of their holding deposit where a landlord or agent imposes a requirement that breaches the tenant fee ban.
For more information, read Holding deposits.
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