New potential landlord has kept deposit.

[tonycee]

Hi peeps.

 

Anybody answer a question for a friend.

 

He paid a new landlord £220 towards a deposit, with the balance of £630 to be paid 4 days later, with intentions to move in 8 days from the first meet.

After 13 hours, he had decided that he did not want the room after all, and emailed the landlord accordingly. The landlord is refusing to return the deposit, stating that the receipt clearly states that it is non refundable under any circumstances.

 

Can people do this? The landlord was not out of pocket in any way.

 

Thank you.

[Steve__M]

Realistically, if your friend wants the money back he may have to sue as the landlord will feel that he has fulfilled his part of the bargain. After all he may have turned other people down in the meantime.

 

If your friend sues, his success or otherwise may come down to exactly what was written on the receipt.

 

The following is taken from elsewhere:

 

As to money taken in advance taken by landlords and agents:

 

Goodwill deposit

 

This is when the tenant pays over a sum to show he is serious. It is repayable on demand.

 

Holding deposit

 

The intention here is that the tenant pays over a sum on the understanding that the property is not offered elsewhere. If it is declared to be non-refundable then there has to be an obligation on the part of the landlord. It is, I suspect, rarely set out clearly what that obligation is. If the arrangement is vague there is no contract and the deposit will be refundable. If the arrangement is not vague then what we have is effectively an option for the tenant to take the tenancy. If it is an option for the tenant to take a tenancy, then that presents difficulties for the landlord if he has not set out clearly what conditions are to be fulfilled before the option can be exercised. The drafting of options is best left to experienced conveyancers.

 

Money on account of rent

 

This is a sum paid to be applied as rent for the first period of the tenancy. As soon as money is accepted as rent there is a contract for a tenancy - again problems for the landlord if the tenant has not been checked out. If the money is held on the basis that it will be applied as rent if a tenancy is agreed, then the money is repayable on demand; a contract has specifically been denied and there is no legal basis to hold the money.

 

Agent's administration fee

 

A sum paid to cover the agent's expenses and compensation for his time and trouble if the tenant does not proceed and on the basis that, if the matter does proceed, it will not be taken for expenses, but applied towards the first payment of rent. No problem there it may be thought, but the payment is made for the benefit of the agent – the landlord does not come into it. So, the arrangement is purely with the agent. If the arrangement is with the agent we have to ask if there is a contract. What would such a contract be for? Everything the agent does is for the benefit of the landlord. No service is supplied to the tenant. There is no exchange of promises between the agent and the tenant. Looks like there is no contract and that the money is repayable on demand.

[mariner51]

Friend agreed to pay £220 for an option on a property which he later did not exercise (by signing AST)

 

How can you say LL did not suffer a financial loss by declining other interested parties during those 4 days?

I doubt the £220 can be regarded as a holding deposit as it would be regarded as part of T deposit on signing AST

Dare I say, when friend paid £220 he entered into binding contract with LL 'to provide and LL is entitled to seek compensation for breach of contract, which clearly stated fee was non refundable.

If money is offered and accepted for goods/services and accepted, a contract exists. Buyer has few grounds for repudiating contract, changing mind is not a usual one.

[Steve__M]

Tenancy contracts are not binding till they are written down and signed (or till you move in)

 

We don't know whether the receipt "clearly stated" anything as we don't know the exact agreement. Also if the receipt was provided *after* the money was paid then it may not be a valid contract.

[tonycee]

Thank you for your replies, and apologies for the delay.

 

 

The arguement was that he was the third of 3 ( 18.45 pm ) viewing, and advised the landlord 13 hours later ( 08.00 ) that he was no longer interested in the room. Not 4 days as suggested.

 

The advert was back online within one hour.

 

He expected to pay reasonable costs, but could not see any, and therefore asked for the money back.

 

After a couple of days emailing each other, we said we will let a county court judge decide if the "contract" was legal, and the non returnable deposit was just if no costs had been incurred.

 

He got his money back in full.

 

Thanks again for your help.