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I have claimed against a property agent for return of my 'non refundable' holding deposit in the small claims court. After mediation, which has failed, I have understood that the agent has three things points that he will make:

1. that I knew it was a non-refundable deposit

2. that he took the property off the market and 'lost' potential clients

3. that when he subsequently let it he had to accept £20 a week less in rent.


My points against these are:

1. I paid the deposit by phone, he emailed the receipt which revealed it was non-refundable if I did not take up the tenancy, but refundable (minus admin costs of £100) if he didn't accept me as a tenant. A biased, one-sided contract

2. From the time I paid the deposit, till the time I told him I would have to pull out he lost two business hours…which could not have possibly cost him £500.

3. That he later let it for £20 a week less is nothing to do with me, perhaps it was overpriced and I should have bargained.


I have looked at LandlordZone and OFT Guidelines on Pre-contract deposits. I don't think I have a problem with points 1 and 2, but they don't seem to have anything on point 3.


Any help would be much appreciated!

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Seems he is arguing that he has lost money in relation to a verbal contract which is fine. However:


1. I would ask him for evidence of that - the thread below discusses this point (see "theycantdothat"'s post).

2. Legally that's little different to having a house "sold subject to contract" - there is no come-back on the potential buyer if they pull out due (also on the thread below) to the fact that till a contract is signed either party can pull out. And with buying and selling houses the potential losses are vastly greater.

3. Ditto with 2. Also, until you signed on the dotted line you continued to have a right to negotiate *all* the terms of the contract including the rent but also including a lot of things not listed in the description of the property that might have cost the LL more than £20 per week - eg. you might have wanted to move in a few weeks later than the LL wanted, or you might have wanted the LL to pay for a service contract if you'd later found out the agent was rubbish at repairing things and the LL lived in Timbucktoo etc. etc.




It's also worth pointing out that their "contract" as you found it when you received the receipt would be regarded as unfair according to the OFT because the admin fee was not refundable even if they declined you. Up to two hours to decide that you were not prepared to risk losing £100 sounds reasonable to me.





Be good to know how you get on with this because such cases don't come up much.

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Thank you Steve for your help. Point 3 is especially pertinent, that I have the right to negotiate terms till I sign the dotted line. I didn't think of that.


As an aside, I later found out that the guy I was dealing with at the agents was also the landlord of the property! In one of his 'Without prejudice' emails he told me that I wanted to make a claim to make it against him rather than the agents. I didn't listen to him of course, but isn't there a conflict of interest here? Does it have any bearing on my 'case'.

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I'm not a lawyer. I think that if you are suing an agency (even a company set up by the landlord) then they are distinct from the landlord, and normally it is the landlord you are suing (the agent acts for the landlord).


In this case though I'd have thought your beef is with the agency because it is the agency that holds the holding deposit and does the "admin" checks, not the landlord, and until you have a contract you have no relationship with the landlord and usually no knowledge of who the LL is.


I believe it is possible to add defendents to cases after they have been submitted. I guess you may have to do this if it becomes an issue. Having a judgement against both agent and landlord might be better for you of course.

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