Holding Deposit: What to Record From the Day the Money Lands

The holding deposit — money to reserve the let before a tenancy is granted — has landed, and the file is a chat, a bank-app screenshot, or nothing. Write amount, date received, advertised rent and the deadline for agreement the same day. Confirm in writing what happens if the let proceeds versus if it dies, then log one outcome: refund, apply to first rent, or apply to the tenancy deposit with the payer’s written yes.

Saturday. Rosa’s one let in Brighton. A week’s rent hits the account at 11:40. She WhatsApps “got it — holding it”. Advertised rent is £1,300 pcm, and nobody writes that figure or the deadline. The risk is day 18: nobody has signed; the applicant asks where the money is.

A holding deposit is not a tenancy deposit — the security sum after signing — and it does not go into a protection scheme while it is still a holding deposit. MHCLG guidance for landlords and agents is plain on that. If the let proceeds and the payer agrees in writing that the same money is applied to the tenancy deposit, that amount is treated as received on the tenancy agreement date. Typical mistake: treating Saturday’s “got it” as the file.

Disclaimer: IziRento is operations software, not legal advice. Local tenancy rules vary; check a qualified adviser for binding decisions.

How do you write the four fields the day the money lands?

Write four fields the day the money clears: amount in pounds, the date the funds landed, the advertised rent, and the deadline for agreement as a calendar date. That deadline is the fifteenth day beginning with the day you received the holding deposit, unless a different day is already agreed in writing. A WhatsApp “got it” is a lead, not the log.

Do write the amount that actually cleared, not a rounded “about a week”. GOV.UK fees guidance (updated 7 July 2026) caps a holding deposit at one week’s rent, one at a time. One week’s rent is annual rent ÷ 52. Shelter works it as monthly rent × 12 ÷ 52. For Rosa’s £1,300 pcm that is £300. Excess is a prohibited payment under Schedule 1 of the Tenant Fees Act 2019.

Do write the calendar deadline, not “two weeks or so”. Schedule 2 starts that clock on the day you receive the money. Do not leave advertised rent blank. In practice, paste the bank receipt next to those four fields the same evening.

What to confirm in writing if the let proceeds or dies?

Confirm in writing, the same sitting, what happens if the let proceeds and what happens if it dies. If they sign, refund within seven days of the agreement date or apply the money to first rent or the tenancy deposit only with the payer’s written yes. If you withdraw, or the deadline passes with nobody at fault, refund.

Do write how much was paid and what happens to the money if they do not move in. Citizens Advice asks for those details in writing. GOV.UK tenant guidance (updated 7 July 2026) says you may put it towards first month’s rent or the tenancy deposit only with the tenant’s agreement. Do not take a second holding deposit while this one is still live.

For example, Rosa’s proceed line can read: if we sign, refund within seven days or apply with your written yes; if I withdraw, full refund. Do not leave that sentence in chat. The cap is per tenancy: three sharers still pay one week’s rent between them.

When to log the outcome: refund, first rent, or tenancy deposit?

Log one money move, not a chat. Refund: date sent, amount, destination. Apply to first rent: save the written yes. Apply to the tenancy deposit: save the written yes; that amount is treated as received on the tenancy agreement date.

Do file the payer’s written consent before you treat the holding deposit as first rent or as the tenancy deposit. Shelter on agreeing a tenancy (updated 1 May 2026): if you sign, return it within seven days or put it towards a security deposit or first rent if you agree. If you apply it to first rent, that receipt lives on the rent schedule for that period.

If you apply it to the tenancy deposit, the next file is scheme name, protection date and unique reference — start from the agreement date on the deposit scheme reference file. Do not treat a verbal “just put it towards the deposit” as consent. Workflow: amount → date → rent → deadline → proceed versus dies → one outcome row.

Why does a written reason matter if you retain any of it?

If you intend to keep any of the holding deposit, send a written reason within seven days of your decision or of the deadline. No written notice means you repay. Failed credit or references with honest information is a refund. Silence in the account is not a retain ground.

Do file the notice and the date you sent it. Shelter Legal: return the deposit if you fail to notify in writing. NRLA (updated 2 April 2026): notify within seven days whether it is refunded in full or any of it is retained. Shelter on failed referencing: you should get it back within seven days even if you do not pass a credit check, if you gave accurate information.

Listed retain grounds include false information that reasonably affects suitability, a Right to Rent fail you could not reasonably have known, the applicant withdrawing, or the applicant not taking reasonable steps while you did. A misspelling that does not affect suitability is still a refund. MHCLG: even where a ground exists, consider keeping only evidenced costs.

Which folder should hold the holding-deposit card?

Keep this card with the proposed tenancy, labelled holding-deposit-YYYY-MM-DD. Clip the bank receipt, the proceed-versus-dies note, and the written consent or the retention notice. If the deadline passed and nobody decided, diary the seven days from that deadline and refund, or send the written retention notice inside that window.

Do file the card on the proposed let. Pressure to “just hold it” is not a reason to skip the deadline date. Success bar: Saturday opens one card — amount, date received, advertised rent, deadline, a written proceed-versus-dies line, and one outcome. Verify that checklist, then stop. Workflow: four fields → written proceed versus dies → one outcome → clip. An IziRento workspace can hold that card and the written consent next to the lease.