Holding Fee kept unfairly?

[DampandDusty]

My 2nd ever posting:

Along similar lines, I have a friend who was showing an interest to the lettings department of an Estate Agent in a property.

My friend handed over credit card details to the agent. His understanding was that a holding fee of £175.00 would be taken from the card once an application form for the property had been physically handed in to the agent.

The agents understanding was that the fee would be deducted immediately, clearly, since that is what they did.

In the meantime, my friend found a property to let that he liked much better and asked that his interest be withdrawn. No paper application was made, therefore no credit/reference checks or other admin was done.

The agent is keeping the £175 on the grounds that they alledge they held the property for my friend, when it could have been on the open market. He thinks that he didn't actually make an application and that his deposit should be returned, as the agent has engaged in some sharp practice.

Who is right?

[Esio Trot]

Difficult to answer really.

In our office, if someone was "showing and interest" in a property, they would normally be told that unless and until monies were paid, the property would stay on the market.

Once reservation/holding monies were paid, they are given terms of business plus an example of the TA they will be signing plus the referencing forms. The property is then tagged as "let agreed" on all advertising, and viewings are cancelled/ceased.

The Terms of Business state that the property is reserved for them, and that to withdraw without good reason will result in the forfeit of their money. From a landlords point of view, for someone to withdraw will cost time and money, so some recompense would be expected.

They need to look at their documentation to see what they signed up to.

[DampandDusty]

I have asked and no written Terms of Business were ever issued. My friend has never had sight of any terms of business.

What is the actual legal standpoint on this situation?

[Planner]

If the fee was paid by credit card, which I gather it was, then the card company is also jointly liable. I would give them a ring and make them aware thats its a disputed transaction as the money was taken prematurly and before any service was provided (and ultimatley no service is provided!), the agents are being uncoorporative, and you want it back.

[DampandDusty]

Hello Planner and thank you for your help.

Funnily enough, I have today spoken to the Credit Card company and they say that since I gave out my details to the agent over the phone, this is tantermount to authorising a transaction.

I'm not at all sure that is the case - they advised me to look at the Consumer Credit Act or consult Trading Standards. I think they are giving me the brush
off, as are the agents.

As usual in this day and age, no one wants to take responsibility. Good grief, I sound like a Grumpy Old Man...

[Esio Trot]

Originally Posted by DampandDusty

Funnily enough, I have today spoken to the Credit Card company and they say that since I gave out my details to the agent over the phone, this is tantermount to authorising a transaction.

This is firstly different to your first post in this thread where you wrote:

Originally Posted by DampandDusty

My friend handed over credit card details to the agent.

Was it you or your friend?

Secondly, you now give extra information, vis, you made the reservation by means of a phone call.

I think in these circumstances, the agent is right to hold on to the money.

[DampandDusty]

Hello Esio Trot.

This what you get for you and your partner using your computer.

The circumstances remain the same, though.

Surely giving your CC details thinking that it faciliates easy payment in the future does not mean that a payment can be taken automatically - I thought that the payment would be taken once an application form was actually submitted?

Seems like an easy way to make some money to me. Granted there seems to be some level of misunderstanding and lack of communication involved with the agent.

You state that "They need to look at their documentation to see what they signed up to." - no documentation was ever seen or signed. Does this mean a contract was actually entered into?

[Esio Trot]

My reply was on the presumption that your friend physically reserved the property on the agent premises. The paperwork involved normally (or should with any reputable agent) gives both parties clear procedures.

As it was done over the phone, that is a completely different ball game. In English law, there can be verbal contracts. Even a tenancy can be just verbal, with no written agreement.

Surely giving your CC details thinking that it facilitates easy payment in the future does not mean that a payment can be taken automatically - I thought that the payment would be taken once an application form was actually submitted?

No agent who wants to be successful will stop advertising a property, or stop viewings, until someone puts money down. It may surprise you to know that a number of potential tenants run with two properties, paying reference fees on both (on the basis that they still have one if the other falls through for any reason - losing £200 is small beer to many). Also at least once a month we get a phone call from someone who has viewed, saying can we hold it until that evening, or first thing next morning when they can put money down. That is the last we hear of them. We are considering taking card payments: likewise in principle it will not be refundable. However, like all things in life, we will consider part refunds - especially where little time is involved.

I think you will be unsuccessful in trying to get a full refund. However, it would be worth writing to the agent acknowledging that they have been put to some expense, and asking for £x portion to be refunded.

Also, find out if they are in NALS, ARLA etc. If so, then they will have a written complaints procedure. As well as asking for a portion to be refunded, you at the same time could ask for a copy of their complaints procedure.

[DampandDusty]

Thank you Esio Trot. All good solid advice.

Wouldn't a verbal contract be very difficult to prove either way - surely it's just a case of one person's word against another from a probably unrecorded phone call?

Yes, the agents in question are members of NAEA, ARLS and NALS.

I presume these 3 organisations have formal complaints procedures?

I will look into it.

Thank you again.