A Landlord or Agent can ask a prospective tenant to pay a holding deposit of up to 1 week’s rent, but only after a tenancy application has been approved.
Acceptance of a holding deposit means the agent or landlord must keep the premises for the prospective tenant for 7 days. The property must not be offered to anyone else during this time.
If the prospective tenant decides not to go ahead with the tenancy they forfeit the full amount of the holding deposit, not just a portion of it, as was the case under the old ‘reservation fee’ system.
If the prospective tenant proceeds with the tenancy then the holding deposit is applied to the first weeks rent.