Letting Agent Holding Deposit

[mariner51]

"I had a change of mind and decided that I did not want the home. So my question is: Are they entitled to my deposit?"

 

IMO Yes, provided property remained available to you as preferred T until you withdrew. Pres this deposit contained some element for conducting credit + ref checks. Convention is buyer pays for work/service carried even if they change their mind.

[Ed999]

My comments only apply if the premises are entirely within England. This posting is supplemental to the information in this forum's "sticky" threads and is NOT to be read in isolation.

 

 

Holding Contract

 

Only a Court can decide the legal effect of what has occured.

 

A Court will take into account the evidence which is given at a hearing by the prospective tenant and by, or on behalf of, the landlord. This evidence will only emerge by cross-questioning of the witnesses.

 

The outcome of a Court case is never certain.

 

 

A reservation contract - or so called 'holding contract' - merely binds the landlord not to offer a tenancy to someone else. It doesn't commit him to agree one with the prospective tenant who requests the reservation.

 

Where a person pays a deposit to reserve premises there might be an implied condition that the deposit is non-refundable if he withdraws without good cause. So, as a matter of contract law, he would not be entitled to its return in that event. The cause will only be 'good' (i.e. legally valid) if it relates to the premises, e.g. if the landlord is unable to give vacant possession, not where it relates to the personal circumstances of the prospective tenant.

[Kazza50]

I have a slightly different problem that I am hoping someone can advise me about. In early April we paid a holding deposit and supplied guarantors for a house we were renting for a year. We agreed terms and were moving in on 1st August. We have since discovered that the landlord has continued to show the property through a different agency and three weeks ago another holding deposit from some different tenants was put down. We were told yesterday by our agents that the landlord had decided not to rent the property after all - which we know is untrue as she has rented it to someone else a month after she agreed it with us. What is the point of the holding deposit? Is there any law that requires the landlord to keep the property off the market while a holding deposit is in place? How can the landlord be allowed to have different agencies all taking deposits for the same house?

Has anyone had this experience?

[Snorkerz]

I have a slightly different problem that I am hoping someone can advise me about. In early April we paid a holding deposit and supplied guarantors for a house we were renting for a year. We agreed terms and were moving in on 1st August. We have since discovered that the landlord has continued to show the property through a different agency and three weeks ago another holding deposit from some different tenants was put down. We were told yesterday by our agents that the landlord had decided not to rent the property after all - which we know is untrue as she has rented it to someone else a month after she agreed it with us. What is the point of the holding deposit? Is there any law that requires the landlord to keep the property off the market while a holding deposit is in place? How can the landlord be allowed to have different agencies all taking deposits for the same house?

Has anyone had this experience?

FWIW (and it is probably not worth much) you do have a contract with the landlord, and the landlord will be liable or any financial loss that his breach of contract has caused you. Unfortunately, a court will expect you to minimise your losses (so no living in a Hotel for 12 months) and with a few months between now and August, the chances are that your losses will be negligible (if any).

 

Still, gives you a bit of leverage with the agency to find you somewhere better (ie with an honest landlord) and maybe gives you some grounds to push for a better property at a better price.

[Kazza50]

Thank you Snorkerz! I think we will just end up getting our deposit back (hopefully). The deposit is with the Estate Agents so there is no forfeit to the landlord who did this to us. If we had done it then we would forfeit the holding deposit but there is no consequence to the landlord even though he is legally bound to take the property off the market while there is a holding fee in place. I cannot comprehend the term 'legally bound' if there is no consequence at all to a landlord who rents the same house out to multiple tenants and then just picks the one he wants with no forfeit. It is the most frustrating thing ever. Thanks for your advice though - I appreciate it.

[mariner51]

In these days of internet marketing, it can be quite difficult to 'take a property off the market' at short notice, even newspaper ads tend to run for full paid-for period. All you can hope is that LL/LA will do the honourable thing and tell other prosp Ts 'property is under offer, subject to Contract.

[leetav]

Hi guys, quick question:

I paid a 'Holding deposit' of £250 which enabled the agency to take the property off the market, do credit reference checks and compile the agreement. Fair enough... However my final invoice states this:

 

Rent cost 11/06/2013 = £750

Deposit held = £1038.48

AGENCY FEE = £250 (with a breakdown of VAT)

Check in Fee = £85

Less holding deposit = -£250

 

So I asked the agent to clarify that there is an extra £250 as an AGENCY FEE and that I won't be getting £250 as my holding deposit as it's paying for that fee, and he said yes.

 

Is this completely legitimate!? It was not mentioned in my initial emails that there was an agency fee to pay; I even rang them 2 weeks ago to ask if there were any extra fees to pay and they said no... they also said on a separate phone call that I get the holding deposit taken OFF of our first monthly rent.

Can anyone shed any light on this at all?

 

Thanks

 

Lee

[raydetinu]

not if you were not made aware of the Agency fee at the outset; they cant just add this on.

Is LL aware of this; normally LL pays Agency for finding and approving tenants ( can be same as one months rent ) so is getting paid twice!!