Holding deposit nonrefundable?

[NWCust]

Is it legal/OK to have nonrefundable holding deposit?

 

I had to pay an estate agent 100 pounds in order to have them take the property off the market for 7 days, however another thread on this forum from 2 years ago said that this could be considered unreasonable.

 

If I do not sign the contract within 7 days, the deposit is taken by the agent and the property is put back on the market.

[Steve__M]

Is it legal/OK to have nonrefundable holding deposit?

 

I had to pay an estate agent 100 pounds in order to have them take the property off the market for 7 days, however another thread on this forum from 2 years ago said that this could be considered unreasonable.

 

If I do not sign the contract within 7 days, the deposit is taken by the agent and the property is put back on the market.

 

Holding deposit agreements are not illegal in England and Wales. I don't know about Scotland.

 

The devil is in the detail, though. For example, before you pay any money the estate agent should give you a full set of paperwork explaining all the fees and procedures that will be followed.

 

Also, if you are ready to sign in 7 days and they withdraw then you may have an argument for getting your deposit back.

[NWCust]

Holding deposit agreements are not illegal in England and Wales. I don't know about Scotland.

 

The devil is in the detail, though. For example, before you pay any money the estate agent should give you a full set of paperwork explaining all the fees and procedures that will be followed.

 

Also, if you are ready to sign in 7 days and they withdraw then you may have an argument for getting your deposit back.

 

I was given a 1 page form to fill out with my details and the holding deposit amount paid but it didn't have many clauses listed. I also wasn't given a copy of it which is why I don't remember them.

 

I did receive contract and paperwork but holding deposit wasn't mentioned in these.

 

 

The reason I ask is that there's a thread entitled "Non-refundable holding deposit: is it legal?" in this particular subforum where Aequitas and Ed999 posted some links in regards to OFT judgements

Edited March 25, 2013 by NWCust

[Steve__M]

Assuming agent is acting in good faith, £100 is a not unreasonable amount in my view.

 

My view and the OFT view would also be that agent should refund if agent chooses not to go ahead.

 

If tenant withdraws without good reason, then agent/landlord may have lost an opportunity to rent to someone else and/or have paid out costs for references.

 

Should we assume that you are looking to withdraw from signing a contract?

[NWCust]

Hi Steve,

 

Yes, I am seeking to withdraw as the landlord won't agree to replace some of the furniture or do anything but offer the flat as is.

 

As it is a student accommodation, I was told that there is a lot of interest in the property and it would go quickly. The agent does not charge any reference or admin fees.

 

Also, the rental doesn't start until 1st July so there's plenty of time for them to find someone else.

Edited March 26, 2013 by NWCust

[mariner51]

Welcome to the adult world.

It does not matter that tenancy does not commence until July or that there is plenty of time to find a new interested party. The fact is you paid £100 to reserve the property for 7 days whilst you made up your mind. (In financial terms - taking out an option

LL is not required to accede to any future T request for improvements - sold as seen.

Most LA's like to have prospectiive students under obligation by April. As you say LA does not charge ref or admin fees (unwise IMO)

May be £100 is high for a 7 day option, but as you say many students are looking for new accom all the time, so your decision to pay was pres to exclude someone else making an offer in those 7 days or to negotiate with LL.

Only if you can show LA continued to market the vacancy to others, without indicating your 'place' was reserved until would you stand much chance of success in getting your £100 back IMO.

Others may disagree

[Steve__M]

So in this sort of scenario it would have been important to say to the agent that the tenancy was dependent on the furniture being changed. The agent would probably have then been more explicit in saying that either it was unlikely that the furniture would be changed or that the property could not be held till the furniture was negotiated upon.

 

For £100 you could probably buy some reasonable furniture from second hand charity shops. I've bought three settees in almost new condition for around that sort of money over the last few years.