Holding deposit not refunded? The 1-week cap, the rules, and your refund letter
A "holding deposit" — the law calls it a holding fee — is the money an agent asks for to take a property off the market while you decide. In NSW it's tightly regulated by section 24 of the Residential Tenancies Act 2010 ("RTA"): it's capped, it buys you a reservation period, and there are clear rules about when you get it back.
If an agent is sitting on your holding deposit, this page explains the rules, gives you a refund-request letter to send, and walks through the NSW Fair Trading complaint and small-claims routes if the letter doesn't work.
Information, not legal advice. Figures current as at 1 July 2025.
What this dispute is
A holding fee reserves a property for you while you make up your mind. Under section 24 of the RTA, an agent or landlord can only ask for a holding fee after your tenancy application has been approved — not as a fee to "be considered" for the property. And it cannot exceed one week's rent calculated on the rent under the proposed agreement.
Whoever takes the fee must give you a written receipt showing the amount and the date paid. Once paid, the landlord must not enter into a tenancy agreement for those premises with anyone else for 7 days (or a longer period if you and the landlord agree) — unless you tell them you no longer want the place. That 7-day reservation is what your money buys.
What happens to the fee depends on what you do next:
- You sign the agreement — the holding fee is applied towards your rent. You don't pay it twice.
- You change your mind and don't sign — the landlord is generally entitled to keep the holding fee. That's the trade-off for them holding the property off the market for you.
- You refuse because the agent misled you — if you decline because of a misrepresentation or a failure to disclose a material fact by the landlord or agent, the fee must not be kept and must be refunded.
A practical point worth grounding: section 24 sets out when the fee can be retained and when it must be refunded, but the exact line in borderline situations — for example, the agent never approved your application, took the fee anyway, then let the place to someone else — can turn on the specific facts. If the agent broke the s24 rules (took it before approval, took more than a week's rent, or let the place to someone else inside the 7 days while you still wanted it), you have a strong argument the fee should come back. When the facts are messy, get advice from a Tenants' Advice service.
Time limits that bite
These deadlines are strict. The Tribunal can extend in some cases, but extensions are not automatic — they're weighed on length, reason, prospects and prejudice.
- 7 daysReservation period — landlord can't let to anyone else (or longer if agreed)RTA s24
- Max 1 weekHolding fee cannot exceed one week's rent under the proposed agreementRTA s24
- After approvalA holding fee can only be taken once the tenancy application is approvedRTA s24
- At signingIf the agreement is entered into, the fee is applied towards rentRTA s24
The process, step by step
- 1
Check the s24 rules were followed
Run the situation against section 24. Was the fee taken only after your application was approved? Was it one week's rent or less? Did you get a written receipt? Did the agent keep the place off the market for the 7 days?
If any of these were breached — fee taken before approval, more than a week's rent, no receipt, or the place re-let to someone else inside the reservation period while you still wanted it — that strengthens your case that the fee should be refunded.
- 2
Work out which outcome applies to you
Be honest about your situation, because it decides the result. If you signed, the fee should already be credited to your rent — chase that, not a cash refund. If you walked away after the landlord did everything right, the landlord can usually keep it.
If you walked away because the agent misrepresented something or failed to disclose a material fact (the property was misdescribed, a condition you were promised wasn't real), the fee must be refunded — and that's the situation worth fighting.
- 3
Send a written refund request
Put it in writing — email is ideal because it's dated and traceable. Keep it short and factual. A template:
"On [date] I paid a holding fee of $[amount] for [address]. Under section 24 of the Residential Tenancies Act 2010 (NSW), this fee [is refundable because I declined the tenancy due to [the agent's misrepresentation that …] / should have been applied to my rent / was taken before my application was approved / exceeded one week's rent]. Please refund $[amount] to [account] within 14 days. If I don't hear back, I will lodge a complaint with NSW Fair Trading."
Attach your receipt and any messages showing what you were told. Give them a clear deadline (14 days is reasonable).
- 4
Lodge a NSW Fair Trading complaint
If the letter doesn't work, lodge a complaint with NSW Fair Trading. Fair Trading handles tenancy-related complaints, can contact the agent, and runs a conciliation process that resolves many holding-fee disputes without a hearing. Attach your receipt, your refund request, and the agent's response (or lack of one).
Fair Trading can't force a refund by order, but agents are licensed and regulated, and a complaint about breaching s24 carries weight. This is usually the fastest free route.
- 5
If still unresolved — the small-claims path
If Fair Trading doesn't resolve it, the recovery route can be less obvious than an ordinary bond fight, because a holding-fee dispute often arises before any tenancy agreement exists — which may mean it isn't a "residential tenancy agreement" matter that NCAT's tenancy list hears. Don't assume NCAT is automatically the venue.
The reliable fallback is the Local Court Small Claims Division, which hears money claims up to $20,000 — well above any one-week holding fee. It's designed for self-represented people. Confirm the correct venue for your situation with Fair Trading or a Tenants' Advice service before you file, so you don't lodge in the wrong place.
Evidence that actually works
Cases are lost on missing documents more than on weak arguments. Get these in order before you file.
The written receipt for the holding fee
The agent must give you one showing the amount and date. It proves the fee, the date, and starts the 7-day clock.
Proof your application was approved (or wasn't)
Email or message confirming approval. If the fee was taken before approval, that breaches s24.
The advertised rent and listing
Shows the rent the one-week cap is calculated on — and catches a fee that exceeds one week's rent.
Every message about the property
If you're relying on misrepresentation, the texts and emails showing what you were told are the case.
Your dated refund request
The written demand and the deadline you gave — it shows you tried to resolve it before escalating.
Evidence the place was re-let inside 7 days
A fresh listing or a new tenant moving in within the reservation period (while you still wanted it) supports a refund.
Common reasons people lose
Walking away when the agent did everything right
If you simply changed your mind and the landlord followed s24, they're generally entitled to keep the holding fee. The fee is the price of reserving the property.
Treating it as a bond dispute
A holding fee is not a rental bond and the bond rules don't apply. Don't try to claim it through Rental Bonds Online — it isn't there.
Assuming NCAT's tenancy list will hear it
Where no tenancy agreement was ever signed, the dispute may fall outside NCAT's residential tenancy jurisdiction. Check the venue before filing.
No receipt and no paper trail
If you paid cash with no receipt and have nothing in writing, proving the amount and the terms is hard. Always get the receipt s24 requires.
Vague misrepresentation claims
If you're relying on being misled, you need specifics — what you were told, by whom, when, and how it was false. 'It wasn't what I expected' usually isn't enough.
Orders NCAT can make
This is the kind of order you can ask for — not a guarantee you'll get it. Frame your application around the order you actually want.
Refund of the holding fee
An order or resolution that the agent or landlord repay the holding fee — the core outcome where s24 was breached or you were misled.
Fair Trading conciliation outcome
A negotiated repayment brokered by NSW Fair Trading, often the quickest resolution without any hearing.
Small-claims money judgment
Where it proceeds in the Local Court Small Claims Division, a judgment for the amount of the fee (plus filing costs).
Crediting the fee to rent
Where you did sign, confirmation that the holding fee is applied to your rent rather than charged again.
Free help
- NSW Fair Trading — costs at the start of a tenancy
Official guidance on holding fees and what you can be charged.
- Residential Tenancies Act 2010 (NSW) — s24 holding fees
The section itself — useful to quote in your refund letter.
- Tenants' Union NSW — holding fee dispute
Sample letter and plain-English explanation of your options.
- Tenants' Advice & Advocacy Services (TAAS)
Free local advice — best place to confirm the right venue.
- NSW Local Court — Small Claims Division
Money claims up to $20,000 for self-represented people.
- LawAccess NSW — 1300 888 529
Free legal info line, Mon-Fri 9am-5pm.
Questions self-reps ask
How much can a holding deposit be in NSW?
A holding fee cannot exceed one week's rent under the proposed agreement, and it can only be taken after your tenancy application is approved (RTA s24).
If you were charged more than a week's rent, or charged before approval, the agent breached s24 — a strong basis to demand it back.
Do I get the holding deposit back if I change my mind?
Generally no. If you simply change your mind and the landlord followed s24, they can keep the holding fee — it paid for the property being held off the market for you.
The exception: if you declined because of a misrepresentation or a failure to disclose a material fact by the landlord or agent, the fee must be refunded.
What happens to the holding deposit if I sign the lease?
If you sign, the holding fee is applied towards your rent under RTA s24 — you don't pay it twice.
If the agent tries to charge it again on top of your first rent, point them to s24 and ask for it to be credited.
The agent re-let the property to someone else. Can they keep my fee?
If the landlord entered an agreement with someone else inside the 7-day reservation period while you still wanted the place, that breaches s24 — holding the property for you is exactly what the fee buys.
That strengthens your refund claim. Gather evidence it was re-let (a fresh listing, a new tenant moving in) and include it in your refund request.
Can I take a holding deposit dispute to NCAT?
It depends. NCAT's tenancy list hears disputes under a residential tenancy agreement. A holding-fee dispute often arises before any agreement is signed, which may put it outside that jurisdiction — so don't assume NCAT is the venue.
Start with NSW Fair Trading. If it's still unresolved, the Local Court Small Claims Division (money claims up to $20,000) is the reliable route. Confirm the venue with Fair Trading or a Tenants' Advice service before you file.
What's the difference between a holding deposit and a rental bond?
A holding fee is paid before you move in to reserve the property, is capped at one week's rent, and is governed by s24. A rental bond is security against end-of-tenancy claims, is lodged with Fair Trading in Rental Bonds Online, and is usually up to four weeks' rent.
They're different things with different rules — you can't claim a holding fee through Rental Bonds Online. If your dispute is about the bond, see our lodge your own bond refund guide.
Related guides
- NCAT rental bond dispute guideThe full guide for disputes about your rental bond (not the holding fee).
- Lodge your own bond refund firstAlready moved in and out? Claim your bond yourself and flip the burden onto the agent.
- Consumer refunds at NCATIf your dispute is a consumer-services refund rather than a tenancy matter.
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NCAT Tracker is not a law firm. This page is information, not legal advice. Figures, fees and statutory periods cited here are current as at 1 July 2025 and are CPI-indexed or amended from time to time — verify on ncat.nsw.gov.au and legislation.nsw.gov.au before you lodge.