Holding Deposit Dispute

RhiRhiMajic

Hi guys and girls, hopefully someone on here will be able to give me a helping hand!

Basically, my boyfriend and I handed over a £500 holding deposit to an estate agent, as a good faith gesture to say we wanted to rent the flat. We signed the reciept for this two months ago. Since then, the reference agency have been the bane of our lives- every two weeks calling for some other piece of evidence they had forgotton to ask for the last time, really dragging the process out, and then finally telling us we have failed the check because we don't earn enough between us. Now, I find this strange, because I am currently renting alone and paying £50 more than we would be paying between us in the new place.

I told them this, and they said that it's because they can't take the £6500 I get from student loans into account. I find this ridiculous- how can you overlook that much money? Between my boyfriend and myself we will have more than enough to pay for this new place.

So now, two weeks before we were supposed to move in, we are left without a place to live. Fantastic. We are leaving for a week in Majorca on Sunday so we have very little time to sort this out. That matter aside, we want to know how much of the £500 holding deposit we are entitled to have refunded back to us.

I am writing a letter of complaint to the referencing agency, informing them we want the £176.20 of the £500 back, which paid for them to do a reference for both my boyfriend and myself on the grounds that this was to pay for them to do us a service, which they did not complete. I am outraged that we have paid almost two hundred pounds to be told "student loans don't count"- something we should have been told in a disclaimer to begin with.

Will we be able to get anything else back, considering the circumstances? It's not that we don't have the money- just that they refuse to recognise six and a half grand a year! How should we go about getting this back from the estate agents if we are entitled to do so?

N79

As harsh as you may think it is Student Loans are not income and many LL's, myself included, would not be willing to include them in our affordability criteria (I would be willing to consider them if you already have borrowed the money and have it invested in some sort of saving account as the difference is you have the money and my rental income does not depend on a sucessful student loan application.

Whether you are entitled to a refund of the deposit will depend on terms under which you gave it - do you have written terms for the deposit and if so what do they say?

As an aside, I believe that you have a moral claim to the whole deposit if you made the LL aware of your financial situation before applying for the property (ie clearly stating that you were relying on loans). If you did not make this clear then your moral claim is to the deposit less the LL's costs. Your legal position is exclusively determined by the terms of the holding deposit.

Geenie

I am not up on holding deposits, as a private LL I never use them. But I have just googled and amongst many that came up, the Land Lord Zone states this...scroll down to where it says Holding Deposit and also that an agreement is given! .http://www.landlordzone.co.uk/deposits.htm

Good luck and there will be people on here who can advise better.

N79

Geenie wrote: »

I am not up on holding deposits, as a private LL I never use them. But I have just googled and amongst many that came up, the Land Lord Zone states this...scroll down to where it says Holding Deposit and also that an agreement is given! .http://www.landlordzone.co.uk/deposits.htm

Good luck and there will be people on here who can advise better.

The problem will be if this holding deposit has been taken without a detailed agreement as to when it can be kept by LL and when it should be returned to the T. The LLzone agreement spells this out. Unlike with AST deposit there is no statutory definition of terms to be applied to a holding deposit so in the absence of a written agreement it becomes a case of he says, she says between the prospective LL and T as to the circumstances in which the deposit is forfeit.

RhiRhiMajic

Thanks for the quick replies! Our holding deposit reciept states-
"If you withdraw from the tenancy for any reason whatsoever, or the landlord is forced to withdraw as a result of you failing to meet the criteria to pass references of our chosen referencing agency, you will be liable for all resonable costs incurred by the landlord or AP Homes, which will be deducted from your holding deposit".

To me, this means that costs will be deducted but we will not lose the whole deposit. We haven't made a standing order or signed the tenancy agreement yet, if that makes a difference.

N79

RhiRhiMajic wrote: »

Thanks for the quick replies! Our holding deposit reciept states-
"If you withdraw from the tenancy for any reason whatsoever, or the landlord is forced to withdraw as a result of you failing to meet the criteria to pass references of our chosen referencing agency, you will be liable for all resonable costs incurred by the landlord or AP Homes, which will be deducted from your holding deposit".

To me, this means that costs will be deducted but we will not lose the whole deposit. We haven't made a standing order or signed the tenancy agreement yet, if that makes a difference.

Your understanding is correct. However, if you made the LL aware of the full details of your finacial status such that the LL would know that you would fail to meet their referencing standards before you applied then you would have a case (albeit a far from watertight case) for the return of the whole holding deposit.