Private Landlord withholding our holding deposit

[Cadster]

Please would someone advise us... We, one week ago viewed a property to rent. We agreed to leave a holding deposit - quite a large sum in cash. We have since informed the Landlord the property is not suitable for valid reasons. The Landlord wrote us a receipt for our deposit and nothing else at that point. We asked the Landlord to return our deposit and offered to compensate for re advertising. The Landlord said they do not have to return our deposit as it is income they rely on and they have turned others down since. We have tried to reason with the Landlord and they have told us we have no rights. They advised us they do not have the money and we asked they prove to us this money went into a legal deposit holding scheme. Which they had not done. Please please advise us where we stand. We are very distressed. Thanking anyone in anticipation who replys

[Steve__M]

I asked this on another forum populated with some legal people.

 

http://www.swarb.co.uk/phpbb/viewtopic.php?f=20&t=766

 

The suggestion was that you may be entitled to your money back if the agreement was vague or nonexistent.

 

Unfortunately you probably won't get it without a fight (ie. in court).

 

I would guess the "validity" of your reasons would help in a fight. eg. if the landlord did not disclose something he should have. But it may be true that they have missed out on an alternative tenant because they held the property for you.

 

My personal view that it is reasonable for a landlord to withhold a reasonable holding deposit depending on the delay between paying the deposit and the tenant pulling out of the deal etc. In my case I ask for about £50 per person and I've always made it absolutely clear to tenants in writing what the deal is (ie. if I pull out they get their money back, if they pull out they may not get their money back).

[Cadster]

Hi Steve, Thank you for taking the time to advise us further. Much apprecaited. We have not seen formal tenacy agreement drawn up, all was verbal. The Landlord told us they do will get something drawn up when we moved in all was on our trust and to be detailed by the Landlord later. We were never told we would not get our deposit back if anything fell through on either sides. We were told this would be held whilst we got all our refs in order. Which we did and not problems or concerns there. When we asked for our deposit back with a very resaonalbe sum £200 for advertising loss deducted - (our offer). We are being told they will not give any deposit back as its been spent etc and they will need to find new tenants. We have been advised the Landlord will of had to provide us with a reference of which Deposit Holding Scheme it is held in. Lanlord saying no they do not have to. Not only is this moraly wrong - surely its legaly wrong.

[Ed999]

If you paid it to reserve the property, on the implied condition that you would not get it back if you withdrew without good cause, then as a matter of contract law you would not be entitled to its return.

 

Even if the contract was verbal, it is still a binding contract if money was paid on the strength of it.

[Cadster]

Thanks for your reply also. Nothing was implied whatsoever. If we have no contract to refer to? How can there be a contract? Surely, a contract would be needed so that both parties agreed?! How can a contract be agreed? Without a draft first being drawn up?

 

 

QUOTE=Ed999;3436229]If you paid it to reserve the property, on the implied condition that you would not get it back if you withdrew without good cause, then as a matter of contract law you would not be entitled to its return.

 

Even if the contract was verbal, it is still a binding contract if money was paid on the strength of it.

[Cadster]

Thanks for your reply also. Nothing was implied whatsoever. If we have no contract to refer to? How can there be a contract? Surely, a contract would be needed so that both parties agreed?! How can a contract be agreed? Without a draft first being drawn up? Taking in to consideration anything could then be added after a holding deposit has been left - anything could be added to a contract which may effect the suitability of accomadtion.

[Cadster]

In addition what about the Deposit not be put in to a tenants deposit scheme?

[Ed999]

You entered into a contract. Even if the agreement was verbal, the contract is still binding where money changed hands - in the form of your holding deposit.

 

 

For a verbal contract to be validly created, and therefore legally binding, all there must be is -

 

(a) an offer to reserve the property, made by the letting agent;

(b) an acceptance of that offer by you;

© a payment, usually of money, by you, e.g. a holding deposit;

(d) an intention to create legal relations - something that is presumed to exist, unless the parties are related to one another, by blood or marriage.

 

 

In the event of a dispute, the court will decide what the terms and conditions of the agreement were, including any implied terms. The usual term which the court finds to be implied in such an arrangement is typically a condition that the prospective tenant will not withdraw except for good cause.

 

The court will ask you: what were your reasons for withdrawing from the letting?

 

 

The tenancy deposit scheme does not apply unless you are granted a shorthold tenancy; but no tenancy of any sort was granted.

Edited June 4, 2011 by Ed999

[Steve__M]

So it seems that you think that you paid money to show you were serious and to cover the expenses of the landlord in the event that you withdrew.

 

The landlord thinks either that he has fulfilled his bargain of holding the property for you and that thereby he is entitled to keep the money, and/or that he has lost more than the amount of money by holding the deposit for you.

 

It seems that only a judge can decide.

 

You have never explained your reasons for withdrawing. It seems from the legal site I linked to that you *could* have sought to negotiate a reduction in rent or change in start date that would have resulted in the landlord withdrawing. If the landlord withdrew you may have had a stronger case for asking for your money back. All theoretical - I am not a lawyer.