LA + Holding Deposit!

JustTony

Sorry for this to be my first post here, but could really do with some help.

Long story short:

Viewed a House on 30/06/12 and paid 'holding deposit' to LA there and then in the pouring rain, with only a carbon copy receipt for myself. My understanding was the fee was for LA to take house off the market.

Received a phone call from LA the following week to ask for email address to send Tenant vetting application - I received 'Keysafe' forms filled out 100% honestly and accurately and sent back.

Received Call from LA to say Keysafe Tenant vetting has come back as a FAIL (due to bad landlord reference - minor arrears, long story) and they will be keeping my deposit as it is non refundable!

What are my rights here - Why cant I have my deposit back?

I wasn't told that it was non refundable until after they informed me they wern't going ahead with application. I received nothing in the form of a contract, and there certainly wasn't anything verbal!

Thanks in advance,
Tony.

[Deleted User]

I'm just new to renting (doing it for the first time on my own anyway, without partner) so I'm just learning myself so don't quote me fully but as far as I'm aware the holding deposit you paid is to keep the property for you whilst you complete the application form to apply for the property.

If the landlord backs out (just changes his/her mind) you get it back if you just back out (change your mind) you lose it.

If however no one changes their minds and you complete the application but you fail it for whatever reason then you do lose that holding deposit!

I'm sure that's the case anyway, but I'm sure others on here who have way more experience then me about rentals, procedure etc will let you know for sure.

I'm just sure that's how it works.

JustTony

Thanks for your input, I dont mind losing the deposit realistically.
It wasn't a massive amount - £200, but it is the attitude of the staff and the way I have been spoken to in phone calls after which has annoyed me most.

I think the key thing here is the fact they didn't tell me that it was non refundable! I'm sure I could have asked more questions, but on the day I viewed it was hammering it down with rain, and the LA that showed us round was eager to jump back into her car and wait for the next viewing ten minutes after.

JustTony

Ive just found this (copied from another website)

Here's what the Office of Fair Trading has to say about holding deposits:

“Where the tenancy does not go ahead because the landlord or agent decides not to proceed, whether this is on the basis of a failed reference check or not, then we take the view that they are not entitled to charge the tenant for the costs they have incurred because it is the landlord/agent who has breached the agreement, not the tenant. If a tenant puts down a holding deposit, provides accurate information about themselves and does not withdraw from the agreement, we see no justification for the landlord/agent seeking to keep any of the tenant's monies on the basis that the landlord/agent decides not to proceed with the tenancy .”

JustTony

00ec25 wrote: »

OFT statements are guidance not law
you can use them to inform your case when / if you go to court over a dispute but the judge does not have to follow the OFT view of life

Ahhh, I wondered what use it was to me.

I feel that if the LA was to take a fair proportion of the £200 for Credit and Reference check then fair enough, but I really don't think it costs £200 to check two people! Plus the house wasn't vacant until this week, so they haven't lost out on rent either.

JustTony

00ec25 wrote: »

my sympathy is with you on that one, they should only be allowed to keep what they actually incurred in costys. but then again we live in a capitalist society and they, like you or I, are in it for the money so you'll have to fight them for it

So, what do you reckon, first port of call is to put it in writing to them asking for my money back and quoting OFT statement?

JustTony

Any other input?
Is it even worth chasing?
Thanks

caringa

Yes I think you should chase it. As it happens, we are landlords and have tonight given back a deposit to a couple who wanted to rent our flat. Their credit check showed up some things that meant we didnt feel happy letting to them and all we kept was £20 for doing the credit check. We only kept their deposit for two days and have refunded it to them by internet banking this evening.

Even so, we dont feel happy that we have had to disappoint them but at the end of the day, we have to make sure we get the right tenants in as we have had some awful experiences in the past.

Heliflyguy

Chase it, although what steps you should take I dont know, I would check Shelter for advise.

You at least should have been informed on what basis the deposit would not be returned, in your case a poor reference from a pre LL means that your potential LL has made the choice not to accept you so in effect has pulled out of the deal.

It would seem fair to expect the agent to withhold the credit check etc fees, how the tenant has been lumbered with this cost is beyond me but expect the agent to come back to you with the cost being £200.

Just another way to bleed tenants and yet another area were legislation is required.
I notice the regular LLs on this site a staying very quite about this problem in this thread, even artful which surprises me.

tbs624

Heliflyguy wrote: »

I notice the regular LLs on this site a staying very quite about this problem in this thread, even artful which surprises me.

Don't make assumptions about other posters, regulars or newbies. The fact that any one of us doesn't post in a specific thread does not mean that there is wilful avoidance of a topic. I tend to skim read the threads and pick up on the first few that catch my eye - I may come back for a second trawl or I may miss some threads altogether.

OP - it is always best to be upfront from the start with a new potential LA/LL and if you have previously run up rent arrears then it's pretty obvious that you won't get a gold star reference from the previous LL.

The bog standard questions that these referencing companies ask of a previous/current LL are " has the T always paid their rent in full and on time?" and "has this T looked after the property?"

A LL who self manages their properties may be prepared to discuss the circumstances of any previous arrears but if a LL/LA is signing up for rent guarantee insurance there is unlikely to be any leeway.

Learn from this - tell the truth from the start and don't hand over any money without getting written confirmation of exactly what its purpose is and under what circumstances any or all of it may become refundable.

That said, the checks to which you refer only cost £32.50 per applicant so I would try challenging the LA. *Write*, keeping a copy and formally request the return of your holding deposit, highlighting that they did not state at any point that the fees paid would be non-refundable - you can then state in the letter that, as a compromise, you are prepared to cover their reasonable costs incurred, ie an amount equivalent to the third party referencing fee. Give them 7 working days in which to respond/cough up.

Check whether they are signed up to ARLA, NAEA, NALS etc and have a look at the relevant code of practice if they are members.

JustTony

Sorry to bump this up - but has anyone got a template letter I can use?