Holding Deposit Scams

Holding deposits are legal in many jurisdictions but are regulated. In England, for example, the Tenant Fees Act 2019 caps holding deposits at one week's rent and requires them to be refunded within 15 days if the landlord decides not to proceed. In the US, regulations vary by state. The key is that a legitimate holding deposit always comes with a written agreement and clear refund terms.

A legitimate holding deposit is typically a small fraction of the monthly rent — usually one week's rent or less. In the UK, it is legally capped at one week's rent. Be very cautious if a landlord asks for a holding deposit that equals a full month's rent or a full security deposit, as this is disproportionate for a holding fee.

A proper agreement should include: the amount of the deposit, the specific property it relates to, the deadline for the landlord to make a decision, the conditions under which the deposit is refundable, the conditions under which it may be retained, and the names and contact information of both parties.

Yes. Holding deposit scams are particularly prevalent in high-demand rental markets where renters are accustomed to competing for units. London, New York, San Francisco, Sydney, and other competitive cities see higher rates of this scam because tenants feel pressured to secure a property quickly.