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View Full Version : No tenancy granted- so can I reclaim deposit paid?



120
26-01-2009, 09:27 AM
******,

I regret to inform you that the holding fee you paid for 135 Richmond Road is non refundable as this property was kept off the market whilst collecting references, consequently losing any further potential tenants who wished to view this property.

Works are already under way to put right and complete the property ready for the rental market. The inspector will then sign the property off ready for the 1st February or there abouts as previously agreed with ourselves and the landlord.

If you still require ********** assistance in finding you a new home please do not hesitate to contact one of our negotiators.

Kind regards

************




I received this letter/email today, after being unimpressed with the agency and house that we put a holding fee down on we opted out of the deal. We had an buildings inspector look at the place and say it was not being built to a good standard; stairs not within building regulations, flooring not well laid, etc.

No contract was signed.

Can they take our fees completely?
Is there any possible way to get it all back?

Regards
Wayne

Lawcruncher
26-01-2009, 10:00 AM
It is not possible to give a definitive answer without knowing the precise terms on which the holding deposit was paid. The fact that there was no formal written contract does not mean there was no contract. However, if there was no contract then the deposit is refundable. It takes two to tango for there to be a contract. Subject to exceptions that are unlikely to apply in your case, there can be no contract if the obligation to take a tenancy is not balanced by an obligation to grant a tenancy.

Mrs Jones
26-01-2009, 16:22 PM
In other words, when you paid the holding deposit, did you and the agent sign a document, and if so, what did that document say?

MrJohnnyB
26-01-2009, 16:25 PM
As others will undoubtedly correct me but my 2 cents none the less... Surely by paying a fee to an agent which is effectively a holding fee you are entering into a assumed contract with implied terms?

Poppy
26-01-2009, 16:28 PM
What terms are you implying?

MrJohnnyB
26-01-2009, 16:35 PM
Well being fairly inexperienced in truth I cannot give you a definative answer, although if i recall correctly there was a similar case recently and will see if I can find info whereby by paying a holding fee and the agents undertaking their portion of the agreement by removing the property from the market that it was simply an implied agreement. That said I suppose this simply relates more so to the sale of goods and fit for purpose rather than the actual holding fee agreement itself.

Sorry if I'm wrong, just giving my interpretation of some of the things I have learnt, as I say I'm fairly inexperienced when it comes to practical situations!

P.Pilcher
26-01-2009, 16:45 PM
OK let's look at it a different way: You viewed a property that was not quite completed but liked what you saw and, subject to completion by an agreed date, agreed to rent the property. Landlord's agent therefore requested a holding deposit that you paid. The terms of this would have been something like, if you fail your credit/reference checks, you get your deposit back, if you do not continue to sign a tenancy agreement, your deposit is forefit.
Now, subsequent to viewing, accepting the property and paying your deposit, you get a report from an independent inspector which states that the property you have inspected and accepted does not meet building regulations requirements. As a result you no longer want to rent it. O.K. You should have obtained this report before accepting the property yourself as acceptable and paying the deposit.
Despite the building failing building regulations requirements and that the landlord may be required by the L.A. to rectify the situation, the fact remains that you accepted the property for rental and are now withdrawing your offer, thus, the landlord's agent does have a valid point in refusing to refund your holding deposit.
Unfortunately the scenario is the same as a purchaser signing a contract to buy a house and then receiving a surveyor's report stating that the property is unsuitable for purchase.

P.P.

jeffrey
26-01-2009, 16:57 PM
Unfortunately the scenario is the same as a purchaser signing a contract to buy a house and then receiving a surveyor's report stating that the property is unsuitable for purchase.
I do not agree. The payment of a holding deposit either does or does not create a contract.

1. If it does, what possible contract-before-a-contract could exist?

2. If it does not, it's similar to a holding deposit traditionally received by a vendor's Estate Agent "as a token of good faith" (as if!) on a non-contractual basis, eventually either:
a. to be set-off against a 10% contract deposit, if contracts are exchanged; or
b. to be returned to P, if the purchase does not proceed.

A 'holding deposit' paid to L's Letting Agent (A)- or even to L- is much more like case 2 than a deposit on exchange of contracts (as P.Pilcher suggests). If A or L wants to be able to keep it, to deter timewasters or to cover abortive work if prospective T fails the financial check, surely a clearly-worded preliminary Agreement is needed?

Paul_f
26-01-2009, 17:43 PM
OK let's look at it a different way: You viewed a property that was not quite completed but liked what you saw and, subject to completion by an agreed date, agreed to rent the property. Landlord's agent therefore requested a holding deposit that you paid. The terms of this would have been something like, if you fail your credit/reference checks, you get your deposit back, if you do not continue to sign a tenancy agreement, your deposit is forefit (sic).
P.P.I think by using the word 'forfeit' then you are penalising the applicant and is therefore in potential breach of the UTCCR 1999 guidelines which might attract the attention of the TSO locally; as I have said before reasonable expenses is alright providing the applicant knows about this before parting with any money. I understand perfectly the Landlord's/Agent's position though.

By the way you cannot pay "fees" to an agent if you are the prospective tenant, they are "charges", as there is no 'contract' between agent and applicant to let the property. As Lawcruncher says, it all depends on other factors.

120
27-01-2009, 10:34 AM
The property was listed as "under offer" once we had put down a holding fee.

No contract was available or mentioned in any sense, to do with paying the holding fee.

No signing of anything took place on our part, no signatures and no agreements were made. Only the holding of the property (which wasn't even ready to be put on the market at all, in regards to what the inspector told us).

Prior to handing over any money for the holding fee, we asked the agent;
if we needed to pull out before any more money was handed over (any deposits or fees ..etc) would we be refunded on any or all of the holding fee.
He told us yes, but only half.
However, now we have expressed our decision not to continue in renting the property, he has passed us over to another person on his team or in the office to deal with us and tell us that there will be a 0% refund. Nothing.
Their reasons were simply because the house was taken "off the market" and they used the money we paid for the holding fee, to get our references checked.

These so called "references" are non existant, because we never gave any information about any.


In any case, if there was an "assumed agreement", surely its only right if both parties know? Else is it really valid? I reiterate - we signed nothing and saw no such contract.

p_cas
27-01-2009, 10:55 AM
Are you saying that you handed over a sum of money without getting in writing anything saying what the money was for or even that you had handed over any money to them at all? Did you get a receipt?

I assume youre only asking for 50% of the deposit back as you say thats what you agreed orally with them? If you have some way of showing that this was what was agreed (a witness?) then you shouldn't have a problem getting the 50% back if it went to Court.

jeffrey
27-01-2009, 11:03 AM
The property was listed as "under offer" once we had put down a holding fee.

No contract was available or mentioned in any sense, to do with paying the holding fee.

No signing of anything took place on our part, no signatures and no agreements were made. Only the holding of the property (which wasn't even ready to be put on the market at all, in regards to what the inspector told us).

Prior to handing over any money for the holding fee, we asked the agent;
if we needed to pull out before any more money was handed over (any deposits or fees ..etc) would we be refunded on any or all of the holding fee.
He told us yes, but only half.
However, now we have expressed our decision not to continue in renting the property, he has passed us over to another person on his team or in the office to deal with us and tell us that there will be a 0% refund. Nothing.
Their reasons were simply because the house was taken "off the market" and they used the money we paid for the holding fee, to get our references checked.

These so called "references" are non existant, because we never gave any information about any.


In any case, if there was an "assumed agreement", surely its only right if both parties know? Else is it really valid? I reiterate - we signed nothing and saw no such contract.
This all bears-out my post #9. 'No such contract' should entitle T to recoup the holding deposit.

Tess
30-01-2009, 15:21 PM
This is interesting - when I worked in a Lettings Agency a holding deposit (portion that would be taken from 1st month's rent) was taken as forfeit if the tenant then decided to not move in.
Of course, we got the tenants to sign paperwork to this effect, but would that stand up in court?

jeffrey
01-02-2009, 20:28 PM
This is interesting - when I worked in a Lettings Agency a holding deposit (portion that would be taken from 1st month's rent) was taken as forfeit if the tenant then decided to not move in.
Of course, we got the tenants to sign paperwork to this effect, but would that stand up in court?
See post #9. It all depends on exactly what the 'paperwork' constitutes- a preliminary contract or not?