Rent and applications
What is a holding deposit, and do I get it back?
Updated By the Housing Rocket moderators
Short answer
A holding deposit is money you pay after being approved, or while approval is finished, so the landlord takes the unit off the market for you. If you sign the lease, it is usually applied to your first month's rent or security deposit. If you back out, many landlords keep it. The rules vary by state.
A holding deposit protects the landlord from turning away other applicants and then being left with an empty unit. It is fair as long as the terms are clear.
- Only pay one after you have seen the place in person or on a live video tour with someone you have verified.
- Get a written receipt or agreement that states the amount, the date the unit will be held until, and what happens to the money if you sign, if you back out, and if the landlord backs out.
- Confirm it will be credited toward your first month's rent or security deposit.
- Pay by a traceable method such as a check or the landlord's official payment portal, not cash without a receipt.
If the landlord rejects you after taking a holding deposit, or rents the unit to someone else, you should generally get it back. Some states limit how much can be charged or how long the unit can be held, so check local rules if the amount is large.
A holding deposit is different from a security deposit, which covers damage and unpaid rent during the lease. The leases and deposits answers explain security deposits.
Want the whole picture? Read Renting Your First Apartment: Applications, Leases and Move-in Costs.