Agency Holding Deposit- Money Claim Online

[purple_rain]

Hi guys,

 

I was hoping for some advice on this.

 

I was contacted by an agency after sending out an email on a website stating that I was looking for a new room. I was taken to view the room in which I said I would need some time to consider my options. The agent suggested that I put down a holding deposit which I have done in the past with other agencies and on these occasions they were refundable. I paid the deposit (in cash) and then was handed a receipt in which it says that the deposit is to cover the admin fees and is non- refundable. In addition, should my references not check out they are also allowed to keep my deposit. I know it's probably my fault for being so naive, but I was just desperate to get out of this house.

 

Are there any guidelines on holding deposits? When is it acceptable for agencies to keep the money?

 

 

Thanks for the help in advice

[Steve__M]

Your number 1 problem is that if the agent wrongly keeps your deposit then it may be a struggle to get it back - ie. court procedures and so forth.

 

In your case you were not informed that the deposit was for admin fees till you paid the money so I don't believe it is legitimate for them to keep the money.

 

Secondly, the OFT would object to non-refundable deposits. See:

 

http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft356.pdf

[mariner51]

OP admits he was asked for a holding deposit (reservation fee) so

 

3.43 An alternative is to set a pre-contract deposit that reflects only the ordinary

reasonable expenses necessarily incurred by the landlord. Such a genuine

'deposit' can legitimately be kept in full, since it would be a reservation fee

rather than an advance payment. However, such a deposit will normally be

no more than a token amount. Otherwise it is liable to be seen as a

disguised penalty, even if it is expressed as a payment for a service (see

paragraph 3.58).

 

So IMO LA would have to justify the deduction as representing the work already undertaken and consequent loss by not keeping property avail for other applicants. Why sould a holding deposit be FULLY refundable, it is akin to T paying for a shares option in the financial market.

OFT goes on to say that, provided T did not give misleading info about refs etc, supplier can not withold payment just because refs did not come up to their required standard. ie if supplier withdraws, then holding deposit is returnable, excpept for amount to cover rel work undertaken.

[Steve__M]

I think that 3.42 is saying that if the tenant is not at fault but the landlord decided references were unsatisfactory, LL/agent would have to provide a *full* refund:

 

Where cancellation is the fault

of the tenant, the landlord or agent is entitled to hold back from any refund of

prepayments a reasonable sum to cover either the net costs or the net loss

of profit resulting directly from the default,22 but not both where this would

lead to double counting. Tenants would be at fault if, for instance, they gave

false or misleading information, but not merely because the landlord thought

their references were not sufficiently good

 

The final sentence of 3.43 is:

 

The landlord or agent is not entitled to keep any money that could reasonably be saved by finding another tenant, for example.

 

which seems to suggest to me that LL/agent are only entitled to claim for outlaid costs (referencing costs and so forth) and not for theoretical costs of lost opportunities.

 

I disagree with the OFT on the "token" amount. In any case, to me sounds like about 50 quid (if I'm being generous) which is the cost of financial references. But any such amount should be made absolutely clear beforehand such that a tenant can work out for themselves whether their income and status are up to the LL/agent's standards!

[purple_rain]

Hi guys,

 

Thank you for all of your contributions.

 

I admit I handed over the money a little too easily but no terms and conditions were set out prior to me giving the money and I am in quite a desperate situation at the moment with regards to accommodation. The deposit was £250. Another thing that's alarming is that on the LA's website they display the property ombudsman service logo and I went onto that website to check if the LA is legit. Although the ombudsman recognises this agency with the same email and website. The company seems to be registered to a different address and telephone number. I remember asking the agent and he told me quite definitively that there's only one branch.

 

So far I've not asked for the deposit back because I want to know what my options are should I not go ahead with renting this room. However, I doubt they will return my money to me. In which case who do I complain to and is it likely to cost me large sums if I have to go to court?

 

Thanks again, Zoe

[purple_rain]

Hi everyone,

 

I was on here a couple months ago asking for advice about a holding deposit that hasn't been refunded back to me.

 

To recap, I viewed a property and was very hesitant about it because it wasn't ready, it was a tad pricey and I just needed time to think. Anyway, the agent mentioned a holding deposit and as with every other agency that I've dealt with I've had a holding deposit back if I change my mind.

 

The agent took down and few of my details and I told him I needed time to think and mentioned about the deposit and I handed over the money thinking the agent had understood that I needed time to discuss things with my family.

 

He then hands me the receipt after the money had changed hands and on there stipulates that the deposit is non refundable. I changed my mind after some things happened with my family and realised I wasn't entirely happy with the property.

 

I told the agent and he said ok that's fine but sorry the deposit is not refundable. I was shocked at the time so I tried to ring back and still said no. I emailed them asking if they had any documentation I signed and they never got back to me.

 

I just wanted to check I hadn't pre-signed anything without reading the fine print before handing over the money. They didn't even answer me so I had to call them and they told me they had nothing on file. Property Ombudsman Service were of course useless.

 

So I felt I had no choice but to file a small claims. They've sent back a defence saying that the case is vexatious and they will be asking for any cost of proceedings to be paid for by me.

 

They also said that I was happy with the property and knew about the holding deposit being non- refundable and that I could have asked for the money back before leaving the office but of course handing over the money and taking the receipt was the last thing I did in that office and despite the agency saying I had ample time to take back my money I didn't.

 

I'm not sure what to do or where to go because I don't want to be paying for their defence costs but at the same time I feel I've been unfairly treated. Any advice?

 

Thanks in advance

Edited August 15, 2012 by citizenB
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[raydetinu]

As you backed out and you knew at the time it was non-refudable ( on receipt ), I doubt you would get it back.

It is an option to take the flat and they will hold it for you and not let anybody else have it, until you proceed.

I pressume the deposit amount would come off any fees or deposit that would be due.

Was it also part of their fee to do a credit/reference check etc.

It would also depend on the amount they took? if it was a large amount then you could argue it was disproportionate to their adnimistartion costs or checks they had to do and they should return some of it.

[purple_rain]

I've moved in somewhere else now this was a couple of months ago. They never told me until after I handed over they money that it was non- refundable. The details being on a receipt and the receipt not given until after the money was handed over. Not sure if that would help.

[raydetinu]

Thats what courts are for!!!

good luck hope you win.

[purple_rain]

I'm just worried because like I said the agency wants me to pay their court fees and I don't know how much that is and I don't think I can afford it. I'm just hoping someone on here will have an insight as to which way this will go or where I can go for some reliable advice.

[raydetinu]

defence court costs are zero I think, just out of pocket expenses, they cant charge for solicitors fees on the small claims track. judge unlikely to award anyway if a reasonable claim even if you loose.

contact court to confirm.

[mariner51]

If they take you to SCC and win, the Court fees will be added to their claim and you pay.

[raydetinu]

M51, OP has started claim, EA defending!

[The Carpet Cleaners]

IMO they are just trying to frighten you into withdrawing the case.... even if you lose you will not be liable for any legal costs of the defence..... Just out of pocket expenses. Which if you win they will have to pay also.... Double edged sword.

[purple_rain]

Thanks for the replies.

 

IMO they are just trying to frighten you into withdrawing the case...

 

That's what I thought initially but I don't want to get myself into financial trouble with court fees or be seen as lying which of course the agency is accusing me of. Is there anywhere I can find out for sure under what circumstances the court will award the defendant the costs of legal proceedings?

[raydetinu]

In small claims track fees are only awarded to claimant if he wins otherwise, only expenses are accepted.

As said speak to court.