Claiming back rent and deposit after change of plans

[technician483]

I'm writing on behalf of a good friend.

 

 

She was looking for a residential property to rent in Chelmsford UK and found somewhere she liked.

She immediately placed a £90 holding deposit on the property.

At this point there was no written contract or receipt given but she does have proof she paid the money.

This was approximately 15th October 2016.

 

 

She was due to move in on 29th or 30th October and paid her £750 deposit and £750 first month's rent on 27th October.

 

2 hours after paying the £1500 she received news that changed her mind about renting this property and immediately phoned the landlord to explain she no longer wanted to rent the flat.

 

 

He agreed on the phone to pay back the full £1500 but when checking her bank only £750 had been returned.

The landlord now says he is keeping the other £750 as compensation for my friend wasting his time.

 

Legally where does my friend stand?

She has never signed any contract or paperwork with the landlord.

[renegadeimp]

He can't just keep it because he decided his time was wasted. I'd be inclined to send him a lba and consider legal action

[ericsbrother]

did she sign a contract as normally an AST will be tying her to the place for at least 6 months unless there is a break clause. If she hadnt signed a contract then she is entitled to her money back less any costs actualy incurred by the landloed. However, they may claim that as the agreement was made they couldnt rent it to anyone else for that month and then she will need to show that the LL had indeed found someone else so no losses incurred.

Just because a contract isnt written doesnt mean one doesnt exist but in this case there is statute law to govern things so a verbal contract wouldnt count and that limits what the LL can claim and her liabilities.

[BankFodder]

Because you have been with us since 2011, one would have hoped that you would have read our customer services guide and also be well aware of the advice we give here which is to always record your calls. Because of this you would have already advised your friend not to speak to the landlord on the telephone without following that advice. That would mean that your friend would have evidence of the conversation – which later on might be denied. That evidence could be extremely useful.

 

However, on the basis that maybe you haven't given that advice to your friend, I would suggest that you get your friend to read our customer services guide and then having implemented the advice there, to make a further telephone call to the landlord in order to discuss the matter – calmly and politely – but mainly to try and steer the conversation so that various admissions are made.

 

This won't necessarily affect the overall position – but it might make life easier.

 

It seems to me that as she agreed to take the flat, the landlord probably took it off the market and it will therefore take him a little while to put it back on the market and to readvertise it and to get a new tenant. He would only have a reasonable time to do this, but I would say that one calendar month is probably about right.

 

On that basis, if he has held on to the equivalent of one month's rent, that he may be entitled to do this – although if he managed to rent out the flat before the expiry of the month, then I think that your friend would be entitled to the money back for the remaining weeks.

 

Of course, the problem for the landlord here is that he has told your friend that he is simply hanging onto the money as compensation for having his time wasted. I don't think that this is a valid reason for hanging onto the money and if his argument continued to be on that basis, I would rate that there is a reasonable chance of success of claiming it back if she wanted to go to the trouble. However, I rather suspect that if she sued him, that he would very quickly defend on the basis that she had committed herself to the flat and that really all he was doing was taking the equivalent of one month's notice while he relet the flat. I think that a judge would go for this argument.

 

Of course if your friend had recorded the call where he simply said that he was seeking compensation for wasted time, she might stand a better chance of at least negotiating a better refund although I struggle to see that she would be entitled to all of it.

 

Although the landlord doesn't sound particularly pleasant, I think also that your friend has to realise that if she enters into contracts where people commit themselves to her, for instance by reserving properties and taking it off the market, then if she has a sudden change of heart at the last minute, it would be unfair of her to leave the landlord out of pocket.

 

Imagine what might have happened if she had been due to move in and it had been the landlord who had changed his mind at the last moment leaving your friend in a great deal of difficulty. I can imagine that she would be extremely unhappy – quite justifiably so.

[technician483]

Thanks for your replies.

 

I appreciate my friend shouldn't have agreed to take on the flat and then backed out of the arrangement, however she has never signed a contract and did notify the landlord (almost immediately after paying him) that she'd changed her mind.

At this point the landlord verbally agreed to pay back the full £1500. He's advertising his properties on Spare Room website so there would have been no delay getting the property back on the market and in fact my friend is adamant that the flat was never even removed from the website.

 

Unfortunately I've only recently been made aware of the situation so none of the phone calls have been recorded. Of course my first advice to her was to put everything in writing going forwards.

 

As I see it from the above it would seem it is the landlord's responsibility to show he's out of pocket to the amount he is trying to withold. It would seem fair that he should return the £750 + £90 after deducting whatever costs he's incurred. However as there is no signed contract maybe he's not even entitled to that.

[ericsbrother]

The £90 was a holding deposit and the LL did perform that contractual obligation so that should be written off as one of those things. Dont mix two differet things together or there is the risk that both become lost. The £90 will cover all of the LL expenses and time for this matter, if there ever were any trouble gone to.

It appears as though the money was paid by debit card, is that correct? If so then the bank can do a recharge and if a reason is needed then just failure to refund money paid in error will do.

[technician483]

I believe the £1500 was paid by a bank transfer, not debit card. I will check this though. Does the same apply for bank transfers and can you still claim it back even after this period of time? It is now 2 months since the money was paid.

[king12345]

Been In this same situation myself and from the LL point of view you have to appreciate that once the money was transferred, if the LL had produced a contract to sign, you friend would have just gone ahead and signed it.

That's why it would be difficult to prove that no implied contract existed.

However, keeping the whole lot is very unreasonable, but keeping £750 isn't Imo.

Not as straight forward as it might seem.

[mariner51]

No.

Your 'friend' agreed to verbal Contract, evidenced by rent & deposit payments on 27th, but no AST T&Cs apply if T did not occupy, but LL has some claim under the 'failure to provide/occupy implied separate Contract, say2-4 weeks rent.

[technician483]

Thanks again for all input. It seems there is a bit of a difference of opinion as to the legal position of my friend. My thoughts at the moment are that it might be best to write the landlord a letter before action asking for the £750 to be returned. After this it will depend what the landlord comes back with. If he comes back with an itemised breakdown of his costs that covers the witheld £750 then it may not be worth pursuing in small claims court.

[king12345]

Thanks again for all input. It seems there is a bit of a difference of opinion as to the legal position of my friend. My thoughts at the moment are that it might be best to write the landlord a letter before action asking for the £750 to be returned. After this it will depend what the landlord comes back with. If he comes back with an itemised breakdown of his costs that covers the witheld £750 then it may not be worth pursuing in small claims court.

 

I don't think he needs to itemise his losses for the simple reason that most tenants look to move first of the month and being left without a tenant with 2 days until following month could have prejudice his chance to get someone in immediately.

Standard AST agreements have the clause that the deposit would be withdrawn if no notice is given.

As said, by handing the money over your friend entered into a contract with LL although not written.

So implied contract and common t&c apply IMO.

I'm surprised that the LL didn't have the contract ready (which would have been signed by your friend) which would have potentially made your friend liable for the duration of the AST.

I feel that a judge would not be so quick in siding with your friend, unless he can prove that another tenant moved in immediately so there was little or no loss for the LL.

[technician483]

I've drafted a letter to the landlord from my friend and cut and pasted it below. Probably not the best worded lba in history but I hope it serves the purpose. If anyone has any more advice then I'm more than happy to listen.

 

 

ref: *************, Chelmsford

Dear Mr

I'm contacting you today to let you know I intend to start court proceedings against you in regard the money you owe me following my decision not to rent the above property.

On approximately the 15th October 2016 I gave you £90 as a holding deposit against the property ** ************ with a view to potentially moving in on 30th October 2016.

On 27th October 2016 I transferred into your bank account £1500 provisionally to be a first month's rent and a deposit for the property rental.

Within 2 hours of paying you the money I phoned to let you know that due to a change of circumstances I was no longer able to rent your property. At this time you agreed to pay me back the £1500 in full.

One week after this I received £750 into my bank account. When I phoned you to ask why you hadn't returned my £1500 in full you stated you were “keeping £750 as compensation for you wasting my time”.

It is not acceptable for you to keep this money as I never took occupancy of the property or entered into any contract with you.

I request that you immediately transfer the remaining £750 into my bank account, the details of which are below. I expect the money to be transferred within 7 days of the date of this letter.

If you decide to contest this payment I request a copy of every note or recording you have made from our phone calls if they exist. Also a copy of any relevant information you may have regarding this issue that you may wish to bring up in court.

 

I remind you that if I don't receive the £750 or written correspondence from yourself within 7 days then I will start court proceedings immediately.

 

Please acknowledge receipt of this letter within the 7 day period.

 

Yours sincerely,

[king12345]

Make sure it's marked "Letter before court action".

Standard "waiting" period is 14 days.

At this stage you don't need to ask for evidence, if he's got any he will have to disclose them at later date when court proceedings start.

Personally I would try a more humble approach, ideally meeting him face to face and giving him a sob story.

If meeting is not possible, a recorded call would be my preferred mean of communication at this stage.

If you know that he's already rented the property to someone else you could use that to your advantage, in fact if that's the case he would have some trouble defending himself.

But you need concrete proof that the property was rented within a short period of time and he sustained little or no loss.

Your friend was moving in on 30/11 so if the property was rented from the 5/12 for example you would need to offer a pro-rata compensation for the 5 days.

That would be seen as very reasonable in court.

Problem is getting proof of when the property was rented.

[technician483]

Perhaps the best thing to do is knock on the door and ask the current tenants when they moved in.

[mariner51]

Perhaps better to ask neighbours when Ts actually moved in? ie saw them moving in.

 

 

Your LBA is too verbose and inaccurate IMO. As explained, your 'friend' did have a Contract with LL to 'supply/occupy', in Law, even if she did not realise it. How much of £1500 paid was for rent / deposit?

 

 

LBA - KISS "Please return my £750 you withheld from my £1500 paid on for deposit / 1st month rent for the Tenancy at

, due to commence on , within 14 days, to avoid legal action".

[king12345]

Perhaps the best thing to do is knock on the door and ask the current tenants when they moved in.

 

Would be great if they could give you a written statement or even better their AST agreement copy.

I still think you should speak to LL and try to reason with him.

Surely he can't be a total ass.