Holding deposit

[samtomsam]

Hello there

I am in a bit of a quandary and wondered if anyone could give some advice.

I am letting out my one-bed flat to move in with my partner. This is my first time as a landlord. I've had several agencies marketing the property and now two have both come saying they've taken holding deposits from interested tenants.

The first agency took the deposit without asking me first - is that common practice? I would have liked them to ask me because I had said I didn't want to let to a family, but their clients are expecting a baby in 6 months.

Shortly after the call from the first agency I got a call from another agency saying they had a couple who were also interested. I said they could take a holding deposit because they sounded like better tenants, purely because they are not starting a family (although obviously I only have their word on that.)

I think I may have done this all wrong as I've now got to disappoint somebody, and I feel bad. I am waiting to see the references so I can decide which tenant to take but I'm not sure how to proceed when I have to turn one lot down. I would also like advice on whether letting to a couple with a baby can cause legal problems if you need to gain repossession of your property, for example if you need to sell.

Many thanks!

[Paul_f]

You should be using a regulated agent i.e. ARLA/NAEA/RICS member but if not then have you a terms of business with the agent?

They have a duty of care and due diligence to refer all applicants to you first and you are entitled to see all the references they have taken up on your behalf in order for you to chose which tenant you might prefer; the choice should always be yours and not theirs. Agents who are not up to speed quote the Data Protection Act about references but they are regretfully wrong!

Your rights concerning repossession will not be affected whichever tenant you choose.

[samtomsam]

Thanks for your advice! The first agent are members of ARLA, but the second one are not. Funnily enough though, the second one seem to have behaved a bit better so far, perhaps because they are a smaller agency so there are less communication problems between staff.

[JimS]

The fact that you have several agents marketing your property means that they'll be racing one another to get their fee, which may tend to cloud their judgement on quality of applicants they recommend.

Taking a holding deposit without consulting the landlord is quite in order and normal. However, have a good look at the references including earnings levels, and previous landlord before you approve the tenants. Evicting a couple with a baby is no different from a childless couple, but on the face of it you would be better off with the non-pregnant couple if only because they'll continue to receive 2 incomes rather than one.

Don't be deceived by the rubbish you hear or read about using an ARLA "regulated" agent. ARLA membership is not worth the paper it's written on. Every other letting agent we hear of either doing a runner with clients' money, or just offering poor service, is an ARLA member. A simple exam and £400 and you're in the club. The only difference with an ARLA agent is that they'll charge you more.

JS
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[Paul_f]

Sorry Jim but generally speaking you will be much better protected with a regulated agent. I didn't say much better served note! Then again I have said this before so it's up to the consumer at the end of the day.

What's more if the failure rate of the "simple" exam - the technical award - which is the ONLY entry into ARLA Membership - is about 40% then there are plenty of candidates i.e. potential or existing agents, who need to learn a bit more.

[samtomsam]

Thanks JimS and PaulF! It is interesting to hear the different viewpoints. The first agency (the one with the pregnant couple) have tried to put pressure on me by saying the couple will lose their holding deposit if I choose the other couple, which hardly seems fair - I thought they could only refuse to return a deposit if the references turned out to be dodgy.

[Poppy35]

as a LA we dont normally do joint agency however in the rare circumstances we do we always check with the landlord first before taking any monies and starting any references in order to avoid the situation you are in.

The unsuccessful party are going to be pretty upset when they find out they have paid their fee and potentially passed the referencing only to be told they cant have the property.

Next time ensure your agents run things by you first.

[Paul_f]

Thanks JimS and PaulF! It is interesting to hear the different viewpoints. The first agency (the one with the pregnant couple) have tried to put pressure on me by saying the couple will lose their holding deposit if I choose the other couple, which hardly seems fair - I thought they could only refuse to return a deposit if the references turned out to be dodgy.You're right - an agent can only charge reasonable expenses and then the applicants are supposed to be advised of this, and what their maximum liability might be. Just to say they will lose their deposit is a penalty and therefore potentially unfair.

[samtomsam]

Thanks for confirming that Paul. I am getting a bit disgruntled with the first agency. I went to them today to look at the references and they said they couldn't show me them till I'd signed a contract with them. I thought that sounded strange. What is the point of getting references if the landlord can't look at them? I said I wouldn't sign anything till they'd shown me them.