Real Estate Agent Kept Your Holding Deposit? Here’s How to Get It Back

You paid a week’s rent to “hold” the apartment while the application was processed. Then the landlord picked someone else, or the agent “found a problem with your references”, or you were told the property was “no longer available”. And the holding deposit? “Non-refundable.” Or you paid a $2,000 “expression of interest” deposit on a house, the vendor took a higher offer before contracts were exchanged, and the agent is sitting on your money.

Agents can’t just keep deposits. There are specific rules for both situations, and they’re on your side.

Your rights

• Rental holding deposits (holding fees). The rules depend on your state. In New South Wales a holding fee can be no more than one week’s rent and can only be asked for once the landlord has approved your application. In Victoria, if nothing is signed within 14 days, the deposit must be refunded by the next business day. In Queensland it must be refunded within three days if you pull out within the holding period and tell the agent. Western Australia and South Australia use different payments, and the Australian Capital Territory bans holding deposits. Our holding deposit guide sets out every state.
• Sales “expression of interest” or “holding” deposits. A deposit paid before contracts are exchanged is refundable in full if the sale doesn’t proceed to exchange. In New South Wales this is reinforced by the Property and Stock Agents Act 2002 and its regulations, which require agents to hold such money in trust and return it on demand if no contract is exchanged. Agents in every state hold deposits on trust and must account for them.
• Trust account obligations. Agents must hold deposits in a trust account regulated by the state licensing body. Misusing or withholding trust money is a licensing offence, which a properly worded demand can point to.
• Australian Consumer Law. Misleading conduct (s 18) about the status of the property or the refundability of the deposit, and unfair terms (ss 23–28) in any “non-refundable” clause.

What to do right now

1. Get the receipt and the document you signed. A holding fee receipt should state the property, the amount and the terms. If you were given nothing, that’s a compliance failure for the agent.
2. Establish who withdrew. Emails or messages showing the landlord/vendor chose not to proceed are decisive. If the agent told you by phone, email them confirming what you were told and when.
3. Demand the refund in writing. “On [date] I paid a holding deposit of $[amount] for [property]. The landlord/vendor did not proceed. Under [Act/section] the deposit is refundable in full. Please refund to [account] within 7 days.” Copy the licensee in charge (named on the agency’s website).
4. Send a Letter of Demand. A formal letter citing the tenancy Act or the agents Act, the trust account rules, and a 14-day deadline before a complaint to the licensing regulator and a tribunal claim. The mention of the licensing regulator is what moves it: agents lose licences over trust money.
5. Complain to the regulator. NSW Fair Trading, Consumer Affairs Victoria, the Queensland OFT, Consumer Protection WA and CBS SA all licence agents and investigate trust money complaints.
6. Apply to the tribunal. The tenancy jurisdiction of NCAT, VCAT, QCAT (or the RTA’s dispute process in Queensland first) or SACAT for rental deposits; the general civil jurisdiction for sales deposits.

When they can keep it

For rentals: only if you withdrew after your application was approved and the holding fee was taken, and only up to the amount of the fee. For sales: if you signed an actual contract with a deposit and cooling-off terms and then pulled out, a small forfeiture (0.25% of the price in New South Wales during cooling-off) may apply, but a pre-contract expression-of-interest deposit is not that. If the agent claims you withdrew, ask them to produce your written withdrawal. They usually can’t.

Multiple holding deposits: if you discover the agent took holding fees from several applicants for the same property, tell the regulator. It’s a serious breach and it strengthens your claim.

“The landlord instructed us to keep it.” The agent holds the money on trust and must follow the law, not the landlord. If the landlord withdrew, the landlord’s instruction to keep the deposit is an instruction to break the Act, and the agent’s licence is on the line for following it. Say so. The agent will usually decide the landlord’s goodwill isn’t worth that.

“We spent it on the application fee / reference checks.” Application fees and reference-check fees are prohibited for residential tenancies in every state. If any part of your holding fee was retained for “processing”, that’s a separate breach and a separate refund.

Who to complain to

The state agent licensing regulator (NSW Fair Trading, Consumer Affairs Victoria, Queensland OFT, Consumer Protection WA, CBS SA, and equivalents). The tenancy tribunal for rental holding fees (NCAT, VCAT, QCAT via the RTA, SACAT). The civil tribunal or local court for sales deposits. The Real Estate Institute in your state if the agency is a member.

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For the full process, see how to complain about a real estate agent.