Cancelling a Holding Deposit Agreement
Housing Matters, Issue 130, pp.4-5, 2019
3 Pages Posted: 13 Jun 2019
Date Written: May 1, 2019
The Tenant Fees Act 2019 aims to stop landlords and letting agents in England from taking advantage of prospective tenants who pay holding deposits. It caps the maximum holding deposits that can be taken to one week’s rent. A holding deposit, as the Act’s sponsor Lord Bourne confirmed, creates “a binding conditional contract between landlord and tenant where both parties agree to enter into the tenancy, subject to the satisfactory fulfilment of all pre-tenancy checks.”
This article outlines when a party can and cannot cancel a holding deposit agreement. It also clarifies when a landlord or their agent may retain a holding deposit, when they must refund it, and when they may be liable for damages for contract repudiation.
Keywords: landlords’ duties, leases, residential tenancies, tenants’ rights, Tenant Fees Act, Consumer Rights Act, Housing Act, letting agent, deposits, holding deposit agreement, agreement for lease, reservation fee, key money, security deposit, pre-tenancy, unfair terms, repudiation, breach of contract
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