Please can anyone help me with a Letting problem?

[Bean192]

I am a University Student looking to rent accommodation along with three other Students

We found a four bedroomed flat and called the Letting Agent to say we were very interested

We had a viewing and raised some questions

We wanted to check if there was a break clause in the Lease

The Letting Agent said we would need to pay a Holding Deposit whilst he waited for the Landlady to return from Holiday

So we paid £750 split between the four of us to the Letting Agent

We then received an email to say the Holding Deposit was non refundable

References were then checked and the tenancy Agreement arrived which needed to be signed by each guarantor and tenant and send back the full signed agreement

At this point we got to see the Tenancy Agreement for the first time and the break clause of 6 months was nowhere to be seen so this made us very nervous and we decided to pull out as we felt we didn’t want the risk of not being allowed to leave the property until a full year was up

We emailed the Letting Agent who replied with the following:

The holding deposit is not refundable as you are withdrawing from this deal.

I will need a confirmation from

Everyone that they are withdrawing and we will put the property back on the market.

 

The move in date is on the 4th Sept and the landlady is left with a very short time to find another tenant. 

 

This will incur a lot of extra cost from both us as an agency and the landlady which we will try to recover.

So, my question is are we eligible to get a refund of our Holding Deposit – bearing in mind we were not told we wouldn’t get it back until after we had paid it?

[BankFodder]

Welcome to the real world.

What year of university are you in? What university? And what are you studying? What is the name of the agent? And what is the name of the landlord?

The business of holding deposits should be affected by the Consumer Rights Act 2015 and that means that they should be subject to terms relating to fairness.

It seems to me that if you pull out of an agreement to take the property then the agent or landlord should only be entitled to hold on to sufficient funds to cover any administrative losses which they have suffered as a result of your change of decision. In practice many agents will simply take the opportunity to cream off a bit of extra profit.

I suppose you just paid the money over without any kind of written agreement or recording or any evidence.

Certainly, if you paid over a holding deposit on the basis of a particular contractual promise – that there would be a break clause and then subsequently there was no break clause then it would be a simple matter to argue that it was the agent of the landlord who had gone into the breach of contract in which case you would be entitled to recover all of your money. However do you have evidence of this?

Similarly, if you pay the holding deposit and were only told afterwards that it was not refundable then it is arguable – although not cut and dried – that they had introduced a new term into an existing contract and so once again, you would be entitled to recover all of your money. However, once again – do you have any evidence of this?

It will be interesting to know whether the agent is acting of their own initiative here or whether they are really exercising the will of the landlord.

Please address the questions which I've put above

[Bean192]

Agent is Coolcribbs
Landlady is NEHA SHAH
Im second year at UCL
Yes, you are correct, we signed nothing for the Holding Deposit, it was mearly an email on the 2 nd
August asking us to pay £705, with their bank details etc and a note on the bottom saying if the
Landlady rejected our deposit it would be fully refundable
Then we paid it on the 2 nd and on the 3 rd received an email from the Letting Agent saying he could
confirm receipt of the £705 as the Holding Deposit and that this email was a receipt
The Letting Agent said it was a Contract for 1 year without a break clause
We then queried this again, as we had asked for a break clause
The Letting agent responded with this below
Before I sent the offer to the Landlady, I explained that it will be for a 1 yr contract and you will be
allowed to sublet your rooms if you wish to leave early
The above is the agreement which has been agreed with the landlady
Now I have the option of a 8 month break clause with the landlady but I cant find out as the landlady
is on holiday and not reachable until the 15 th Aug
The holding deposit is non refundable if you change your mind on the offer I have sent to the landlady
As I mentioned over the phone I could help advertise your rooms if you wish to leave early
On the 5 th Aug the Letting Agent forwarded us the forms for Reference Check and Guarantor Checks
On the 19 th all the information they required was sent over
(Delay inbetween as on holiday)
On the 23 rd we were sent the Tenancy Agreement
Up until now we had received nothing re the break clause we had asked for so presumed it would be
in the Agreement
It wasn’t, so we have said we would like to pull out
On the 24 th we received this response
The holding deposit is not refundable as you are withdrawing from this deal.

I will need a confirmation from
Everyone that they are withdrawing and we will put the property back on the market.

The move in date is on the 4th and the landlady is left with a very short time to find another tenant.

This will incur a lot of extra cost from both us as an agency and the landlady which we will try to
recover.

You will hear from us soon.

[BankFodder]

Thank you. I'm afraid that this might get complicated for you and I'm sure that you didn't bargain for this kind of hassle.

First of all – here are some life lessons – please pardon the patronising approach but it's a pity that university students never had the intelligence to be able to leave school at 16 years old like the rest of us.

However, we will try to help you make up for this disadvantage. Also I'm going to say that your welfare department should be handing out good advice at the end of your first year because they realise that a huge number of you are going to be leaving student halls and are going to be basically on their own dealing with  landlords and their agencies.  Unfortunately, most welfare/accommodation offices don't seem to have the imagination to take this kind of proactive approach towards protecting their students.

So lesson number one, get an agreement for everything – in writing. Record everything. Read our customer services guide – implement the advice there.

 

Although you might have found yourself in the same predicament, at least you would have the evidence to support your position and this would make life a lot easier for you.  As it is, we are going to have to infer some evidence – which works reasonably well but it would be nice to have it laid out in black and white

I've already said that holding deposits – and in fact any kind of contractual agreements are going to be subject to the unfair terms provisions in the Consumer Rights Act. If you look at the Consumer Rights Act on this forum you will find that schedule two contains a nonexhaustive list of examples of unfair contract terms. I think you won't find too much difficulty drawing parallels with your position and unfair terms which reserve particular rights for one party but propose to deprive the other party of precisely those same rights.

 

Holding deposits are very normal because of course a landlord wants to know where they stand – so does the agency – and of course you want to have confidence that you are not effectively going to be gazumped by having your new home cancelled at the last moment.

However people do change their minds, and what seems fairly clear from the email that you seem to have received is that the landlady has a right to reject your application – but at this moment you don't have a right to change your mind without losing some money. This seems to me to be quite unfair.

The big problem here is that you have accepted an email which is outlined the landlady's rights and yet is completely silent on your own rights.

I think you have a very strong case because effectively what is happening here is that you have made an agreement to put down a holding deposit on particular terms but you have not agreed that the holding deposit would not be refundable – because this has never been explained to you. The problem is to be able to prove that.

I think to a certain extent we can say that the evidence is inherent in the email that you have received. The email has trouble to spell out the landlady's rights and has said nothing about your own rights or about your own liabilities.therefore I think it would be a reasonably powerful argument to be able to say that as the non-refundability of the deposit was never included when they explain the landlady's rights, that you are entitled to believe that there was no issue here.

I think this would be my position and this would be my starting point in starting to make any threats to recover the money.

I have to say that the way you have presented your story is slightly difficult to understand because it isn't really completely clear as to who said what to who and when and whether it was in writing or said verbally. Your sentences are turning to run into each other. Are you setting this out on a telephone?

[BankFodder]

Incidentally, the longer you wait before confirming that you are pulling out of the deal then the more they are able to say that they have incurred expenses by keeping the property for you rather than letting it out.

Whatever happens here, you can reduce the complications by making a decision quickly

[stu007]

Hi

 

I hope the Holding Deposit was handed over and confirmation from letting agent was all after 1st June 2019

 

From the 1st June 2019 there is new legislation about Holding Deposits that was introduced under the Tenant Fees Act 2019: http://www.legislation.gov.uk/ukpga/2019/4/contents/enacted

 

On the above link look at '5. Treatment of holding deposit' it states 'Schedule 2 makes provision about the treatment of holding deposits.'

 

Schedule 2 Treatment of holding deposits: http://www.legislation.gov.uk/ukpga/2019/4/schedule/2/enacted

 

The important link is the Schedule 2 above so have a very good read of it and just think to yourself 'Did the do that?' and if not take note of the specific area. (keep note of that Schedule 2 link for future if you ever have pay a holding deposit you will know your rights)

 

Could you possibly clarifiy the following:

 

1. What date did you Pay your Holding Deposit? (2nd of ??? 2019)

 

2. What date did you get confirmation of Holding Deposit received from Letting Agent (£705)? (3rd of ??? 2019)

 

3. Has anything actually been Signed in Writing?

 

You need to make sure and keep a good paper trail of everything

 

So what you could ask the Letting Agent for clarification

 

Due to our Dispute over the Holding Deposit I now require further clarification as this Holding Deposit comes under the Tenant Fees Act 2019 which parts your letting agency are using to class it as 'Non-Refundable' Holding Deposit.

 

Wait to see what  others say

[BankFodder]

I didn't know anything about this - so thanks, it is very helpful - although I have still to understand what it all means!! - I will eventually

[BankFodder]

This looks like a pretty good guide

 

https://england.shelter.org.uk/housing_advice/tenancy_deposits/holding_deposits

[king12345]

In my experience this could only be sorted by making a county court claim.

All estate agents do exactly this, take the deposit without giving any paperwork,  at best they give an hand written receipt. 

Then they can claim that t&c were handed personally when property was viewed.

So unless one is secretly filming, there will be no evidence either way.

Estate agents and LL know that the chances of being sued is very small, so they carry on regardless.

That's why on the rare occasions when they receive court papers, they tempt to pay back the money.

One question to the op: I didn't understand why you wanted to pull out.

 To hand money to the estate agent you must have been pretty sure you wanted the property, what happened?

In adult world changing your mind more often than changing clothes is very expensive,  so unless that potential degree gives you a millionaire job, I suggest you and your friends start keeping to your words without changing your mind too often.

I also would like to suggest that you think about the landlord.

They're not all rich billionaires who can afford losing money.

In fact most of them would be in the red if their property didn't produce rent for a month or two.

That's why they're not happy that you changed your mind. 

Please don't be upset for my suggestions,  you might find them useful in future.

I was a university student myself once upon a time and I know what it means.

Edited August 27, 2019 by king12345

[BazzaS]

If you were a uni student, you’ll know that properties “go” very quickly, hence the pressure to put down a deposit.

 

As for “serve a county court claim”. Even a self-represented litigant is expected to follow the pre-action protocol. By all means serve a claim if they don’t respond to a letter before claim, but the OP is required to give them a chance to respond to the letter before serving the claim!

[king12345]

BazzaS, when I went to uni, not many student existed as they didn't have many drama and social courses, hence it was easier to find a bed.

With regards to starting a county court claim, I assume (wrongly perhaps) that anyone who's read a couple of threads on cag must know that a lba is an integral part of the claim, so of course that's where it would all start.

[Bean192]

Below is the actual email trail between us and the Letting Agent with dates

 

3rd August - First Email from Letting Agent
Hi Guys
I can confirm that we have received £705 as a holding deposit for XXXX and attached is the receipt
Offer:
Price:705 pw
Move in date 4 th September
Tenancy – 1 year
Our next step is to reference check: please provide me the following info for yourselves and
guarantors
(Etc etc – list of items required)

 

3 rd August – from Student
Could you send me a copy of the break clause as I have some concerns.
Thanks

3 rd August from Letting Agent
Sorry a copy of a Break Clause?
What is this?

 

3 rd August – from Student
I was just wondering about the Contract if it was through the Summer of 2020 because I wont be in
London during summer of 2020

3 rd August – from Student
Also, how does the Break Clause work?

3 rd August – from Letting Agent
The Property will be rented for 1 year without a break clause
This is what we have agreed

3 rd August – from Student
But you told us it was a one year lease with a 6 month break clause

 

3 rd August – from Letting Agent
The Contract is for 1 year without a break clause

4 th Sept – 3 rd Sept 2020
Let me know if there is an issue

3 rd August – from Letting Agent
Kindly email me once the payment is done and I will confirm everything on my end
Just to confirm this is for a 1 year agreement with 6 months break clause

 

3 rd August – from Letting Agent
Yes Ive spoken to you over the phone and explained that the agreement needs to be for 1 year
The landlady doesn’t want to have another agreement
If you want to leave early and replace yourself that will be fine
Let me know?

 

3 rd August – from Student
What about subletting rooms – is this allowed by the landlady?

3 rd August – Letting Agent
We can allow that but only once per tenant during the tenancy and the incoming tenents need to be
referenced fully

3 rd August – from Student
What do you mean by references fully?
Sorry I don’t undertstand what you are saying in the previous email. Could you explain it more
please?

3 rd August – from Letting Agent
Sorry been sending a lot of emails for simple questions
You can call me for explanations
What I mean is that when new tenants come in we need to do references for them

 

August 5 th from Student
Im sending this email to ask about the break clause. Before we paid the holding deposit you had said
we would be agreeing on a 1 year lease with a 6 month break clause which we were ok with.
However, you have changed the terms after we paid the Holding Deposit. We would really like the

break clause as its an Insurance in case something happens and we have to terminate the contract.
We should also have been made aware that the Landlady didn’t want the break clause before we
paid the Holding Deposit
If the lease cannot have the break clause then we will have to decline to rent the property. In this
case we would like our deposits back as it was your communication that would lead to us pulling out
of the contract
Please do find out about this form the Landlady as fast as you can as we need to find
accommodation asap

5 th August – from Letting Agent
I have been in contact with one of the other students before I sent the offer to the landlady. I
explained that it will be a 1 year contract and you will be allowed to sublet your rooms if you wish to
leave early
The above is the agreement which the landlady has agreed with
Now I have the Option of a 8 month break clause which I cant find out as the landlady is on holiday
and not reachable until 15 th August
The holding deposit is non refundable if you change your mind on the offer Ive sent to the landlady
Please let me know your final decision

6 th August – from Student
We would like to forward with the Property but await your response from the landlady when she is
back from holiday

 

23 rd August – from Letting Agent
The landlady has accepted you as tenants
I will be sending the Tenancy Agreement over shortly

 

Hope this is clearer now

 

Please can you tell us the next step?

 

I will also reply to other questions in a new post

[Bean192]

Could you possibly clarify the following:

 

1. What date did you Pay your Holding Deposit?

2nd of August 2019

 

2. What date did you get confirmation of Holding Deposit received from Letting Agent (£705)? 

3rd of August 2019

3. Has anything actually been Signed in Writing?

Nope

 

You need to make sure and keep a good paper trail of everything

Yes have now attached this above

 

So what you could ask the Letting Agent for clarification

 

Due to our Dispute over the Holding Deposit I now require further clarification as this Holding Deposit comes under the Tenant Fees Act 2019 which parts your letting agency are using to class it as 'Non-Refundable' Holding Deposit.

 

Wait to see what  others say

[Bean192]

@stu007 Please could you clarify what you mean with the following sentence:

Due to our Dispute over the Holding Deposit I now require further clarification as this Holding Deposit comes under the Tenant Fees Act 2019 which parts your letting agency are using to class it as 'Non-Refundable' Holding Deposit.

 

I am a bit confused with the part after 2019

[stu007]

Hi Bean192

 

Basically I mean you writing to the letting agent to ask them to clarify which parts of the Tenant Fees Act 2019 that came into force on 1st June 2019 they are using to refuse the return of your Holding Deposit/say its Non-Refundable.

 

 

 

 

[Bean192]

Ahhh ok, thank you!

I will let you know what they say!

[Bean192]

Response just received from letting agent @stu007

Please can you clarify which parts of the Tenants Fees Act 2019 that came into force on 1^st June 2019 are you using to refuse the return of our Holding Deposit / say its non refundable?

 

Hi

 

Because we have gone through the whole process and at the end you have changed your offer for the property and you have pulled out of the deal.

 

This 1 week rent doesn’t even cover us nothing in terms of the cost we have encountered from your withdrawal.

 

--------------------------------------------------------

Please can you advise how to proceed

[BazzaS]

That is an answer from them, but isn’t a clarification of “ which parts of the Tenants Fees Act 2019 that came into force on 1st June 2019 are you using to refuse the return of our Holding Deposit / say its non refundable”.

 

So, point this out and again ask them for the detail of which parts they are using to refuse / say it is non-refundable, highlight that your decision not to proceed was based on their failure to arrange the break clause in the agreement (which was an essential component of any agreement from the outset!), and ask for details of any letting agent redress scheme they belong to.

 

https://england.shelter.org.uk/housing_advice/private_renting/letting_agent_redress_schemes

 

If they aren’t a member of a scheme they might choose to back down rather than have you report them to the local council .......

If they are a member of a scheme you need to exhaust their complaints procedure before going to the redress scheme.

 

 

 

 

Edited August 28, 2019 by BazzaS

[stu007]

Hi

I have to agree there response has not answered exactly what was asked in fact they have completely ignored what you asked.

 

So I would respond to them with something like:

 

Thank you for your email of (insert time) & (insert date)

Your response has so far failed to answer what I asked in my email so I will ask again.

 

"Which parts of the Tenant Fees Act 2019 that came into force on 1st June 2019 are you using to refuse the return of our Holding Deposit/say its non refundable"?

 

Also in your email you state:

 

"Because we have gone through the whole process and at the end you have changed your offer for the property and you have pulled out of the deal."

 

Right from the start and during this process I made it completely clear to your letting agency that there needed to be a break clause in the Tenancy Agreement which having only recently been provide with a copy does not have the stated break clause (which was an essential component of any agreement from the outset!).

 

"This 1 week rent doesn’t even cover us nothing in terms of the cost we have encountered from your withdrawal."

 

The Withdrawal was due to your letting agencies failure to provide the stated break clause in the Tenancy Agreement (which was an essential component of any agreement from the outset!) which your Letting Agency assured me it would be able to provide right at the beginning when I was insistent on the need for a Break Clause.

 

I would also like to be provided with full details of your Redress Scheme.

 

delete or amend to suit your needs and wait to see what others say. 

[Bean192]

28 th – Email from Student

Please can you clarify which parts of the Tenants Fees Act 2019 that came into force on 1 st June 2019
are you using to refuse the return of our Holding Deposit / say its non refundable?
----------------------------------------------------
28 th Aug – Email from Letting Agent

Because we have gone through the whole process and at the end you have changed your offer for
the property and you have pulled out of the deal

This 1 week rent doesn’t even cover us nothing in terms of the cost we have encountered from your
withdrawal.
---------------------------------------------------
28 th Aug – Email from Student

Please can you show me the which part you are using to refuse / say is non-refundable?

I would like to remind you that our decision not to proceed was based on the failure of you to
arrange the break clause in the agreement (which was an essential component of our agreement from
the outset!),

You’re email on the 3 rd August specifically said

Please can you let us know details of any letting agent redress scheme you belong to because looking
back at our correspondence we made it very clear from the start that we wanted a Break Clause

It was very important to us

You asked for our Holding Deposit and said you would confirm details following receipt of the Deposit –
as soon as we had paid you you then back tracked on your email of the 3 rd August where you state it is a 1
year Agreement with a 6 month break clause
---------------------------------------------------
28 th Aug – Email from Letting Agent

Please see below the email when we spoke about the break clause and it was agreed for 1 year.

I have numerous email with the other group members which they have agreed for the one year.

Subject: Your Offer

Hi Guys,

I can confirm that we have received £705.00 as a holding deposit for xxxxx and attached is the
receipt.

 

Offer:
Price: 705 pw
Move in date: 4 th  Sept 2019
Tenancy: 1 year
Our next step is reference check; please provide us with the following within next week the latest:
----------------------------------------------
28 th August – Email from Student

Yes I have this email that you have copied below, but if you look at the time you sent the one confirming a 6 month break clause this was at 14:44pm on the 3 rd – so after the email below

Please can you let me know details of the redress scheme you belong to?
-----------------------------------------------
29 th August – Email from Letting Agent

Please speak to the other tenants which I have been dealing regarding the viewing and we have confirmed this via email and over text and other means.

 If this was your issue why didn’t you cancel the deal then? But you chose to send me the references and made use go through the whole process?

You should talk to your group
-----------------------------------------------
29 th August – Email from Student

I am fully aware of all the correspondence between the others and yourself, we have a timeline of all the conversations

 I’m worried you are not replying to me about the Letting Agent Redress Scheme, do I need to contact the Council to ask if you are a member?

 All we want is our Holding Deposit refunded in full and we will drop this

 If not, you leave us no option but to file a complaint to the Council as you are not replying to the questions we are asking and you clearly have not looked at the timeline of our conversations and when you agreed to a 6 month get out clause

 Its up to you  

Look forward to hearing from you asap, and hope we can solve this amicably

------------------------------------------------------
29 th August – Final Response from Letting Agent

Good luck with your case.

Unfortunately the holding deposit is not refundable as you have pulled out of the offer and you are using the break clause situation to get your deposit back.

As explained before - we agreed on a 1 year lease, you sent us all your references and guarantor documents and details - you were delayed on this but you still sent all the documents - we prepared the contract and sent it to you - once we requested payment for the move in you withdrew from the offer. By this point the break clause was not an issue as you went through with the process.

I am ready to go all the way on this.

All our company information that you need are in our website.

From now on please get your lawyer or your representative to contact us regarding this case. You withdrew from the deal without giving any explanation or option to negotiate and the deposit will not be refunded.

 

I would like to point out that the only reason we pulled out of the offer was because the Letting Agent back tracked on what he agreed to with us on the 3 rd August when he sent us an email confirming a 6 month break clause

We proceeded with all the paperwork he requested because as far as we were concerned we had a 6 month break clause

I also need to point out that the Letting Agent did not provide us with any Terms and Conditions of the Holding Deposit, and neither did he ask us to sign anything confirming the Holding Deposit was
non refundable

We trusted that the Letting Agent would have stuck to his word of a 6 month break clause as he stated and then when the Tenancy Agreement arrived there was no break clause at all on the paperwork

I have since checked his website and the Letting Agent is part of The Property Ombudsman Their website says you must follow the Letting Agents Complaint Procedure and file a complaint Im guessing our emails above cover this, and also the Letting Agent says he will only deal with our Lawyer from now on

So please can you advise?

Do you think we have a case?

[BazzaS]

You either need to allow 8 weeks from time of a formal complaint, OR that the agent issues a final response / deadlock letter before the 8 weeks is up, and THEN you can go to the Property Ombudsman.

[Bean192]

Surely the Letting Agents response of no more communication unless its through your Lawyer is a Deadlock situation?

[king12345]

The request to speak only to your solicitor is nonsense. 

Fortunately in UK you don't need a solicitor to write letters or indeed start a civil claim.

That shows how unprepared they are.

As said,  they've screwed so many people before and they're very confident. 

Go through the process and once they get court papers they'll start behaving. 

In my experience the ombudsman is useless and in fact they're biased towards the estate agents.

[Bean192]

So is this Small Claims Court then?

 

Do you think because they actually confirmed the 6 month break clause on the 3rd that we do have a viable case, and its not just a case that we backed out because we felt like it?

 

Hope you don't mind me asking, I'm just wanting to make sure we're not being stupid about this

[king12345]

It would be beneficial to scrutinise the correspondence between the estate agent and your friends to make sure nobody started digging a hole without your knowledge