Commentary on provisions of Act Schedule 2: Treatment of holding deposit
This Schedule imposes requirements on a landlord or letting agent who receives a holding deposit.
	Paragraphs 3 and 4 require the landlord or letting agent to refund the holding deposit within 7 days of the parties entering into the tenancy agreement.
	Paragraphs 3 and 4 also requires the holding deposit to be refunded if the parties do not enter into the tenancy agreement for reasons, broadly, under the landlord or agent’s control.
	If the landlord decides not to rent the property to the tenant, or the landlord and, if applicable, the agent fails to take reasonable steps to enter into the tenancy agreement by the deadline for agreement then the holding deposit must be refunded within 7 days of the date of that decision or the deadline, as applicable.
	"Deadline for agreement" is defined in paragraph 2 and is the day by which the landlord must enter into an agreement with the tenancy to grant the tenancy. The default deadline for agreement is 15 days following the receipt of the holding deposit but the landlord or agent may agree a longer deadline with the tenant.
	Paragraph 5 requires the person who received a holding deposit to refund it if they believe they are able to retain it under paragraphs 8 to 12 but they do not provide reasons in writing to the person who paid the deposit within the relevant period as to why the deposit is being retained. The relevant period to provide reasons within would be:
where the landlord decides not to enter into a tenancy agreement before the deadline for the agreement 7 days beginning with the date on which the landlord decides not to do so; or
if the landlord and tenant fail to enter into a tenancy agreement before the deadline for the agreement 7 days beginning with the deadline for agreement.
	Paragraph 6 provides that the landlord may, with the consent of the person who paid the holding deposit, ‘repay’ the holding deposit by deducting the equivalent sum from the first payment of rent or the tenancy deposit. If the holding deposit is applied to the tenancy deposit paragraph 7 provides that for the purposes of the deposit protection requirements of section 213 of the Housing Act 2004 that money is received on the date of the tenancy agreement.
	Paragraph 8 provides that the landlord or letting agent do not have to refund a holding deposit if a tenant does not have the right to rent property under the Immigration Act 2014 provided that the landlord and agent did not know, and could not have been expected to know that, prior to accepting the deposit.
	Paragraph 9 provides that the landlord or letting agent does not have to refund a holding deposit if the tenant provides false or misleading information, which the landlord is reasonably entitled to take into account in deciding whether to grant the tenancy, because this or their conduct in providing the information materially affects their suitability to rent the property.
	Paragraphs 10, 11 and 12 provide that the landlord or letting agent does not have to refund a holding deposit if the tenant decides not to enter into a tenancy agreement or fails to take all reasonable steps to enter into a tenancy agreement when the landlord or letting agent have done so.
	Paragraph 13 provides that a holding deposit must be refunded if the landlord or letting agent imposes a requirement on the tenant or relevant person that breaches the ban on letting fees as set out under clauses 1 and 2. Paragraph 13 also sets out that a holding deposit must be refunded if the landlord or letting agent behaves in an unreasonable way such that it would be unreasonable to expect the tenant to enter the tenancy