If landlords accept holding deposits can they still accept higher offers?
A holding deposit (reservation deposit or down-payment) is intended to reserve a letting, and the landlord/agent does this by taking the property off the market, though new enquiries should still be recorded.
All holding deposits should be evidenced by a Holding Deposit Agreement which also acts as a receipt and is signed and copied to both parties.
The Agreement makes it clear what will happen if either party backs out or the letting cannot take place for any reason.
The agreement should also be “subject to contract” – see the LandlordZONE Holding Deposit Agreement below.
In other words, neither party is contractually bound to go through with the letting if they change their mind, but both are bound by the holding agreement if they back out, i.e., tenant forfeits or landlord repays.
Withholding monies from a holding deposit must be proportionate to any losses, and the tenant may be entitled to compensation for any losses should the landlord renege.
If the landlord reneges for a higher offer, the tenant would be entitled to the return of the deposit in full and compensation for losses.
Holding Deposit Agreement: www.landlordzone.co.uk/documents©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.