Tenant to owner - deposit return

[Euterpe]

I have a singular situation here: initially a tenant with a 6-month lease, ending on 31/8 with option to renew, I was informed via the letting agent that the Landlord required vacation as he wished to sell the property. As sitting tenant, I requested first refusal, and agreed directly with the Landlord on a purchase price, with no intermediate estate agents.

We agreed verbally over the phone that as I was purchasing the property, there would be no need to pay rent for September, as if I had moved out, the property would have been empty and no rent paid anyway.

Sale has taken a little longer than expected, principally because several insurance policies required from the Seller were not set up. They have nevertheless achieved end-of-tenancy to sale in under 8 weeks, which has to be a record !

 

Completion is finally fixed for 24/10 , so I contacted the original Letting agents to request return of my initial deposit, as no longer required since I become the owner.

Letting agent replied that my deposit had been forwarded to the Landlord in lieu of September rent...!

Surely this is illegal - not to mention contrary to my agreement with the Seller?

What is my best course of action here?

 

Thanks

[MrShed]

How is the deposit held by the agent? Stakeholder or Landlords Agent?

 

Also did you have anything in writing regarding the arrangement for the last months rent?

[Euterpe]

As lease dated from 01/3, the new Tenancy Deposit Scheme does not apply, unfortunately. I believe, however, that deposit was held by Agents in previous scheme.

Agreement with Landlord was, unfortunately, only verbal. I received a rent reminder for September from the Agents, and informed them that I had an agreement with the Landlord, and in my innocence left things at that.

The Agent has said that they will claim money back from the Landlord to return my deposit to me, along with the master-set of keys which they are holding, but surely they should not have used the deposit to cover rent in the first place ?

[Euterpe]

As a corollary, I am paying 150K without haggling, and the Sellers are saving Agencies fees through direct sale, so I really think it is reasonable to forego the rent for a month or so, don't you ?

[stevokenevo]

Have you actually spoken to the landlord? The deposit may have been paid to them by BACS or such like, and they may not be aware. If you had a verbal agreement they may be more than happy to return it

[Ed999]

It is for your solicitor who is handling your property purchase to make suitable provision for this point in the contract to buy the premises.

 

If he has not done so, you should ask him why. But if you did not tell him that you had paid a rent deposit, or did not tell him that you had agreed a rent-free month at the end of the tenancy, it is clearly not his fault.

 

In that event, you should look at the terms of the original tenancy agreement of 2001 as to the arrangements for the deposit. However, that is a red-herring, if, as appears to be the case, you missed a rent payment.

 

Clearly, the letting agent is acting perfectly correctly in seizing the deposit to meet the missed payment, because those are the terms of the original agreement.

 

It is not the agent's fault that you have now suggested a different arrangement to the landlord, without telling the agent. The question is: is the new arrangement legally binding, on anybody? In the absence of consideration, it is not.

 

You might argue that your agreement to buy the premises is the consideration needed. And that might be so, but for the fact that the conveyancing contract will probably contain a clause excluding any verbal terms that are not written into the contract of sale.

 

If it does not contain such a clause, the agreement to buy the house might indeed be the necessary consideration for the variation of the original letting contract. If it does contain such a clause, what is then your position? That is unclear. You should obtain your solicitor's advice, in either case.

 

In any event, proving the verbal agreement may be difficult.

 

 

 

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.

[Euterpe]

Many thanks to all for your replies - I have spoken with Landlord/Seller, who has offered to return deposit " if I am really out of pocket"... which of course I am - so it looks like the Letting Agents were being overly zealous - perhaps because they get a part of rent, and would be out of pocket if rent is unpaid ?

 

So this looks like an amicable settlement.

 

Thanks again.

[stevokenevo]

thats great news, good luck in your new/old home ;-)