Holding Deposit

[Jeanster]

I paid a holding deposit for a property, then was asked by the letting agency to pay a further amount of just under £500 for 1 month rent, inventory and admin. the receipt i was given for this also states 'holding deposit'. i did not sign a tenancy agreement, although 1 of the other housemates did. 3 days before our moving in date she decided she could not afford the house and pulled out, which meant that i and 1 other also had to pull out.
I don't expect the genuine holding deposit back, but do expect the other money paid to be refunded, but the letting agent is refusing.
Any thoughts?

[Ed999]

You need to post here further details of the terms on which you paid the "holding deposit", and the terms on which you paid the rent in advance.

Did you appoint the other tenant as your agent, to sign a tenancy agreement on your behalf? The court is likely to conclude that you did, if you paid a month's rent on the property. If so, you are bound by the tenancy agreement.


To terminate a tenancy, you must give due notice. If you have not done so, the tenancy still exists and you are liable for the rent until you do now validly terminate it.

You cannot terminate a tenancy for a fixed term, such as 6 months, unless the landlord agrees; so, if the tenancy is for a fixed term, you are reliant on the landlord's goodwill. Is he willing to agree a surrender of the tenancy, before the 6 months are up? It cannot be terminated in that way except with his agreement.

The only exception is if the tenancy agreement contains a clause allowing the tenant to give notice to terminate it early, in which case you must now give the proper notice as required by that document.


Alternatively, if you have a tenancy that is periodic, i.e. which does not have an initial fixed term, you must still give notice to terminate it: one rental period's notice (i.e. usually one clear calendar month's notice), in writing, expiring on the day before a rent day.

Such a tenancy can, alternatively, be surrendered early, if the landlord agrees.


Read this thread for some further information: http://www.consumeractiongroup.co.uk...-eviction.html

I am assuming that you have a shorthold tenancy, as explained in that thread. Your legal position may be different if it is not a shorthold tenancy.



Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[GlasweJen]

I paid a holding deposit for a property, then was asked by the letting agency to pay a further amount of just under £500 for 1 month rent, inventory and admin. the receipt i was given for this also states 'holding deposit'. i did not sign a tenancy agreement, although 1 of the other housemates did. 3 days before our moving in date she decided she could not afford the house and pulled out, which meant that i and 1 other also had to pull out.
I don't expect the genuine holding deposit back, but do expect the other money paid to be refunded, but the letting agent is refusing.
Any thoughts?

You should write to the letting agency asking for a detailed breakdown of
1. what you've already paid and
2. what expenses they have had to pay as a result of you guys backing out.

If the flat was in a high demand area i.e near a university or a good school then chances are it will be re-let very quickly and the landlord wont lose out on much. That being said you are liable for rent after you signed your tenancy agreement. You should ask when the new tenants will move in and ask that the proportion of the first months rent be returned to you. Legally I don't think you really have much to go on but they may do this as a gesture of goodwill. You should also request back the inventory cost as of course an inventory never had to be drawn up and even if they had already done it it can be used for the next group to occupy.

[MrShed]

Not entirely true on the liablity for rent. The tenancy did not commence. First of all, not all the tenants signed the agreement - in particular, the OP did not, and one of the other tenants can not sign on their behalf. Secondly, possession of the property did not occur, therefore the tenancy never began. I think there is no question that the agents are not entitled to hold this deposit you paid.

[GlasweJen]

Good point MrShed. I checked my documents here and we all had to sign to say that we'd read it, this was a legal requirement, then we signed something else that was the actual agreement.

The holding deposit is usually to "hold" the house until paper work and bank checks have been done. Usually this is payable when you occupy the house but can form a part of your actual house deposit so murky grounds with that bit. Using MrSheds logic you should get the rent and stuff back. Hold your ground and see CAB to say what help they can offer.

[Ed999]

Originally Posted by MrShed

Not entirely true on the liablity for rent. The tenancy did not commence. First of all, not all the tenants signed the agreement - in particular, the OP did not, and one of the other tenants can not sign on their behalf. Secondly, possession of the property did not occur, therefore the tenancy never began. I think there is no question that the agents are not entitled to hold this deposit you paid.

Did the o/p appoint the other tenant as agent, to sign a tenancy agreement on her behalf? The court is likely to conclude that she did, as she paid a month's rent on the property. If so, she is bound by the tenancy agreement.