Once a holding payment has been accepted for a property, the landlord and/or agent have a limited period of time to proceed with the tenancy, known as the deadline for agreement. The deadline for agreement gives landlords and agents a two week deadline by which to enter into a tenancy.
Once the deadline has passed, the holding deposit may be used to compensate the landlord or returned to the tenant in full depending on which party is at fault for failure to reach an agreement.
To learn more about the deadline for agreement, see our FAQ down below.
What is the deadline for agreement?
The deadline for agreement refers to the amount of time that landlords or agents have to enter into an agreement with a tenant after a holding deposit is received. Under the Tenants Fees Act (2019), the deadline for agreement allows landlords and agents 15 days to enter a tenancy agreement with the applicant. The two weeks include the 15th day after the deposit was received. The deadline for agreement can be extended if both the landlord and prospective tenants agree to do so in writing.
What are the landlord’s obligations?
If the landlord enters into a tenancy agreement with the applicant, the deposit will be returned to the tenant within seven days or be put towards the tenancy deposit/first month's rent. The landlord can only put the money towards future payments once the tenant agrees to the arrangement.
If the landlord decides not to enter a tenancy agreement with the applicant, they must return the deposit or explain in writing why the deposit was retained. This must occur within seven days of the decision or seven days within the deadline for agreement (if the deadline has already passed). If the landlord keeps the deposit but does not write to the applicant explaining why the deposit was retained within seven days, they will need to return the applicant’s deposit in full.
Holding deposits can be retained if a potential tenant withdraws from the property, provides misleading information on their application, fails a Right to Rent check, and/or does not take all reasonable measures to enter into a tenancy agreement. Landlords are not allowed to accept multiple holding deposits on a singular property. If a holding deposit is received, the property should no longer be advertised.
What are the tenant’s obligations?
The tenant is required to pay the holding deposit in order to reserve a property. To ensure that the tenancy is confirmed in a timely, tenants must also take all reasonable steps to enter into a tenancy agreement (for example, replying to correspondence in a reasonable timeframe). Falsifying or knowingly withholding any necessary information on the tenancy application form entitles the landlord or agent to keep the holding deposit if an agreement is not reached.
What happens if the deadline passes and there’s still no contract?
If the landlord keeps the holding deposit after the deadlines passes and no contract is in place through no fault on the part of the prospective tenant, then the applicant has the right to receive a full refund of their deposit. Applicants should contact the landlord or agent and ask for the holding deposit to be returned. Applicants can also seek help through the trading standards Citizens Advice consumer helpline or by contacting a letting agent redress scheme if the agent is a member.
If the deadline passes and there is no contract in place as a consequence of the applicant (i.e. they failed a Right to Rent or referencing check or did not take all reasonable steps to enter into an agreement) then the landlord and/or agent is entitled to retain the holding deposit. This is to compensate them for costs incurred through loss of marketing time and tenancy administration.
The deadline for agreement allows landlords and agents 15 days to enter into a tenancy agreement after receiving a holding deposit. If the landlord keeps the holding deposit without entering into a tenancy agreement, they must explain in writing why. Without proper explanation, applicants are entitled to their full deposit back.
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