Holding Deposit Not Returned? The “15-Day Rule” & Free Refund Template

You found a flat. You paid 1 week’s rent as a “Holding Deposit” to take it off the market. Then… silence. Or maybe the agent called to say you failed the reference check, or the landlord picked someone else. But when you ask for your money back, they say: “Sorry, that’s non-refundable to cover our admin costs.”

This is often illegal. Since 2019, letting agents are banned from charging “admin fees.” Unless you actively lied on your application or pulled out yourself, they likely have no legal right to keep that cash. Here is the “15-Day Loophole” that forces them to pay you back.

The “15-Day Deadline” (The Tenant Fees Act)

The law is very strict. Once you pay a holding deposit, a clock starts ticking. This is called the “Deadline for Agreement.”

• The Rule: The agent and landlord have 15 days from the date you paid to sign the tenancy agreement with you.

• The Consequence: If the 15 days pass and no contract is signed, they MUST refund your deposit in full within the next 7 days.

“But they said the delay was my fault!” Unless you stopped replying to their emails or failed to send them your ID, the delay is usually their fault. If they were “waiting for the landlord to decide,” that is their problem, not yours. The 15-day limit still applies.

When Can They Legally Keep It?

There are only four specific reasons an agent can keep your holding deposit. If their reason isn’t on this list, they are stealing your money.

1. You Pull Out: You tell them you don’t want the flat anymore.

2. You Fail Right-to-Rent: You cannot legally rent in the UK (e.g., visa issues).

3. You Mislead Them: You lied on your application (e.g., said you earned £50k when you earn £20k, or hid a CCJ).

4. You Don’t Respond: You stop answering emails/calls to get the paperwork done.

Crucially: Even if one of these applies, they MUST write to you within 7 days of the deadline explaining why they are keeping it. The Trap: If they forget to send this “explanation letter” within 7 days, they must refund you anyway, even if you were at fault.

Free Template: The “Technical Knockout” Letter

If the agent is ignoring you or claiming “admin costs,” send this letter. It cites the exact legislation they are breaking.

Subject: Urgent: Return of Holding Deposit – [Property Address]

Dear [Agent Name],

Re: Holding Deposit of £[Amount] paid on [Date]

It has now been more than 15 days since the holding deposit was paid (The “Deadline for Agreement”). As no tenancy agreement has been signed, I am writing to request the full return of my holding deposit in accordance with the Tenant Fees Act 2019.

Why this is due:

1. Under Schedule 2 of the Act, if the Deadline for Agreement passes without a tenancy being signed, the deposit must be refunded within 7 days.

2. I have not withdrawn from the tenancy, nor have I provided false or misleading information.

3. You have failed to provide written notice explaining why the deposit is being retained within the statutory 7-day window.

Please remit the full amount of £[Amount] to the account below within 48 hours.

[Sort Code] [Account Number]

Failure to return these funds is a civil offence liable to a fine of up to £5,000. If unpaid, I will escalate this matter to [The Property Ombudsman / Property Redress Scheme] and your local Trading Standards office without further notice.

Sincerely, [Your Name]

Frequently Asked Questions

Can they charge for credit checks?

No. Charging tenants for credit checks, referencing, or “admin” is banned. If they keep your deposit to “cover the cost of referencing,” that is an illegal fee. You can report them to Trading Standards.

What if I paid a “Security Deposit” too?

A Holding Deposit is to reserve the property (capped at 1 week’s rent). A Security Deposit (Tenancy Deposit) is for damages (capped at 5 weeks’ rent). If you didn’t move in, they should refund both.

(Sources: Gov.uk – Tenant Fees Act Guidance, Shelter – Holding Deposits)