diff --git a/flang/lib/Semantics/check-declarations.cpp b/flang/lib/Semantics/check-declarations.cpp
--- a/flang/lib/Semantics/check-declarations.cpp
+++ b/flang/lib/Semantics/check-declarations.cpp
@@ -493,6 +493,15 @@
 
 void CheckHelper::CheckObjectEntity(
     const Symbol &symbol, const ObjectEntityDetails &details) {
+  if (!IsAllocatableOrPointer(symbol)) { // C702
+    if (auto dyType{evaluate::DynamicType::From(symbol)}) {
+      if (dyType->HasDeferredTypeParameter()) {
+        messages_.Say(
+            "'%s' has a type %s with a deferred type parameter but is neither an allocatable or a pointer"_err_en_US,
+            symbol.name(), dyType->AsFortran());
+      }
+    }
+  }
   CheckArraySpec(symbol, details.shape());
   Check(details.shape());
   Check(details.coshape());
diff --git a/flang/lib/Semantics/resolve-names.cpp b/flang/lib/Semantics/resolve-names.cpp
--- a/flang/lib/Semantics/resolve-names.cpp
+++ b/flang/lib/Semantics/resolve-names.cpp
@@ -3975,25 +3975,6 @@
 }
 
 void DeclarationVisitor::Post(const parser::TypeDeclarationStmt &) {
-  if (!GetAttrs().HasAny({Attr::POINTER, Attr::ALLOCATABLE})) { // C702
-    if (const auto *typeSpec{GetDeclTypeSpec()}) {
-      if (typeSpec->category() == DeclTypeSpec::Character) {
-        if (typeSpec->characterTypeSpec().length().isDeferred()) {
-          Say("The type parameter LEN cannot be deferred without"
-              " the POINTER or ALLOCATABLE attribute"_err_en_US);
-        }
-      } else if (const DerivedTypeSpec * derivedSpec{typeSpec->AsDerived()}) {
-        for (const auto &pair : derivedSpec->parameters()) {
-          if (pair.second.isDeferred()) {
-            Say(currStmtSource().value(),
-                "The value of type parameter '%s' cannot be deferred"
-                " without the POINTER or ALLOCATABLE attribute"_err_en_US,
-                pair.first);
-          }
-        }
-      }
-    }
-  }
   EndDecl();
 }
 
diff --git a/flang/test/Semantics/resolve69.f90 b/flang/test/Semantics/resolve69.f90
--- a/flang/test/Semantics/resolve69.f90
+++ b/flang/test/Semantics/resolve69.f90
@@ -16,13 +16,13 @@
   character(nonConstVal) :: colonString1
   character(len=20, kind=constVal + 1) :: constKindString
   character(len=:, kind=constVal + 1), pointer :: constKindString1
-!ERROR: The type parameter LEN cannot be deferred without the POINTER or ALLOCATABLE attribute
+!ERROR: 'constkindstring2' has a type CHARACTER(KIND=2,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
   character(len=:, kind=constVal + 1) :: constKindString2
 !ERROR: Must be a constant value
   character(len=20, kind=nonConstVal) :: nonConstKindString
-!ERROR: The type parameter LEN cannot be deferred without the POINTER or ALLOCATABLE attribute
+!ERROR: 'deferredstring' has a type CHARACTER(KIND=1,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
   character(len=:) :: deferredString
-!ERROR: The type parameter LEN cannot be deferred without the POINTER or ALLOCATABLE attribute
+!ERROR: 'colonstring2' has a type CHARACTER(KIND=1,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
   character(:) :: colonString2
   !OK because of the allocatable attribute
   character(:), allocatable :: colonString3
@@ -47,14 +47,34 @@
 
 !ERROR: Invalid specification expression: reference to local entity 'nonconstval'
   type (derived(3, nonConstVal)) :: nonConstDerivedLen
-!ERROR: The value of type parameter 'typelen' cannot be deferred without the POINTER or ALLOCATABLE attribute
+!ERROR: 'colonderivedlen' has a type derived(typekind=3_4,typelen=:) with a deferred type parameter but is neither an allocatable or a pointer
   type (derived(3, :)) :: colonDerivedLen
-!ERROR: The value of type parameter 'typekind' cannot be deferred without the POINTER or ALLOCATABLE attribute
-!ERROR: The value of type parameter 'typelen' cannot be deferred without the POINTER or ALLOCATABLE attribute
+!ERROR: 'colonderivedlen1' has a type derived(typekind=:,typelen=:) with a deferred type parameter but is neither an allocatable or a pointer
   type (derived( :, :)) :: colonDerivedLen1
   type (derived( :, :)), pointer :: colonDerivedLen2
   type (derived(4, :)), pointer :: colonDerivedLen3
 end subroutine s1
+
+!C702
+!ERROR: 'f1' has a type CHARACTER(KIND=1,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
+character(:) function f1
+end function
+
+function f2
+!ERROR: 'f2' has a type CHARACTER(KIND=1,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
+  character(:) f2
+end function
+
+function f3() result(res)
+!ERROR: 'res' has a type CHARACTER(KIND=1,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
+  character(:) res
+end function
+
+!ERROR: 'f4' has a type CHARACTER(KIND=1,LEN=:) with a deferred type parameter but is neither an allocatable or a pointer
+function f4
+  implicit character(:)(f)
+end function
+
 Program d5
   Type string(maxlen)
     Integer,Kind :: maxlen