Landlord requesting one month in advance NON REFUNDABLE

[42man]

I am assisting a friend who is looking to rent a nice apartment.....and would like some advice / comment. I have underlined the worrying part of the email...as I was led to believe according to the OFT website that - http://www.oft.gov.uk/news-and-updates/press/2011/88-11

 

"Where a let does not go ahead through no fault of the tenant, the prospective tenant's holding deposit will be refunded in full and within 10 working days"

 

This is an email from the agent......my friend wants this apartment for him and his girlfriend for 2 years (originally wanted 3 years)

"I have spoken to the Landlord and he is happy to accept £1375 for the first year & £1395 for the 2nd year. He would like the holding deposit to be equivalent of 1 ½ month’s rent, which would be your deposit when you move in, and this would be non-refundable if you decide not to go ahead or fail references.

 

With regards to the references, as long as you have a good Landlord reference, a joint income of £42000 and no adverse credit history you will pass references.

If you are willing to go ahead with this he would like this paid by the end of the week to enable us to take the property off of the market. "

By requesting a non refundable deposit surely they are in breach of the OFT's code ? At the end of the day the landlord could just say you had bad references and pocket the money !!....(and by the way my friend DOES have good references but will not be held hostage he likes the apartment but he will walk away if anything is suspect or unreasonable"

Many thanks in advance....

[The Carpet Cleaners]

I agree with you on that one, it seems a bit suspicious.....

 

It may be perfectly fine, but if it is not, and the deal falls through for any reason (including the one you suggested could happen), it could take an awful long time and a great deal of stress to get the money back....

 

The age old saying caveat emptor can still apply......

[Earthling1]

The OFT's code said it will be refunded if the let doesn't go through and it isn't the fault of the tenant. If they cancel or fail the credit check, that's their fault surely.

 

I have paid a holding deposit 3 times and in all cases it was non-refundable if I pulled out, but refundable if the landlord did.

[Steve__M]

Referencing should only take a few days, especially if all your ducks are in a row in terms of asking your referees to be quick. So the LL does not lose anything near 1.5 months' rent by going through this process, and the process is there to protect him, not the tenant, so is part of the cost of his business.

 

Suggest to the agent that it is a ridiculous proposition, which it is. One option would be to do the referencing before taking the property off the market - they could get the referencing done "by the end of the week" which seems to be the timescale currently on the table, and it only costs 20 quid or so.

 

Ask for a copy of the contract too - what if the contract had something in it that was unreasonable - once LL has the money he can put whatever he likes in the contract and you are forced either to agree to it or lose your money.

[Steve__M]

If they cancel or fail the credit check, that's their fault surely.

 

I would suggest it is not, because the criteria are set by the agent/landlord and not the prospective tenant. Typical credit check agencies just return a number between 1 and 999 and the agent will apply some sort of threshold. But the meaning of the number is only known by the credit check company.

[42man]

Point taken Earthling1, but potentially there isn't anything stopping a landlord from just saying 'your references were bad'....tough luck the deposit goes in my pocket, and I have another 2 or 3 tenants who I am doing the same with !......I completely agree with losing the deposit if the prospective tenant pulls out.....Thanks Steve, that was what I have advised my friend to do...

[42man]

OK Update.....email sent to the lettings agent who have changed their tone...now strangely enough when the property was viewed it was explained that at the original (lower rent of £1300) that my friend would get the choice of furnished/partly unfurnished or unfurnished......however this email clearly states below that the landlord NOW wants us to pay additional for furnishing....and it was advertised as being furnished or unfurnished !!!

 

Thank you for your email.

 

If the Landlord decided he did not want to go ahead with the tenancy even if you passed references then the money would be refunded.

We carry out our references through a company called Homelet, to be classed as acceptable you would need to fill the criteria as explained in my previous email. If you were acceptable by Homelet but the Landlord decided he was not happy with the references then you would have the money refunded.

 

If you prefer I can carry out the references before you pay the deposit?

 

With regards to the furnishing’s the property is unfurnished, the Landlord would want a higher rental if you require any furniture.(The flat was originally advertised at £1300 per month with a choice of furnished/part furnished or unfurnished) Apologies if this was not explained at your viewing. (it was explained at the viewing that it was the choice of the tenant)

[nohope]

and this would be non-refundable if you decide not to go ahead or fail references.

 

Load of C**P, i've been through loads of letting agents for friends and family and i've never come up against that one. The only thing you pay for up front is the cost for the credit check and maybe there admin fee but other than that no other money should pass to them untill the day you sign the tenancy and only then do you give your deposit over.

 

1 1/2 months rent as a deposit is not unheard of, quite a few places now are doing the same but even then the ones that are will normally drop to 1 month as a deposit.

 

If it was me, i'd run a mile. Sounds like the agents and the lanlord have just found an easy way to make money out of people...

[Steve__M]

Well it's a partial fallback, but passing references could still be a bit of a lottery if something has gone wrong with your credit report - as can be seen in their failure to inform tenant of the deal with the furniture agencies can be very slap-dash with their dealings despite people putting up substantial sums of money.

[42man]

I don't venture into these forums very often......you guys are brilliant !!!