Friend has letting deposit fiasco - what can they do?

wibbler

Hi,

A friend has this problem with Foxtons:

- He took over tenancy of a shared house at the 6 month mark, along with 3 others people.
- As the change of tenants came half way through the previous tenant's contract, it was unusual - but it was agreed that if there were 4 new tenants found, the deal could go ahead without a full new tenancy going ahead.
- On advice by Foxtons, he paid the deposit to the previous tenants, and the first 6 weeks plus first month to the landlord, Foxtons.
- He then signed the tenancy agreement.
- Foxtons have now realised that the deposit payment is not correct, and it should have gone to them (the person from Foxtons advising this is no longer working for Foxtons)
- Foxtons have not been able to get the amount from the previous tenants due to disputes over the Check Out report.
- Foxtons are now asking for the deposit from my friend.

Foxtons allege that as the agreement with them states that the deposit should be paid to them, and he hasn't paid it to them, then he is in breach of contract.

They acknowledge that they gave wrong advice, but say that legally that is not an issue - the fact remains that they have not received a deposit from us.

Furthermore, they will launch legal proceedings if he does not pay the deposit by Friday next week.

They say that he should launch legal proceedings against the previous tenants to get that money recovered.

Money was paid to previous tenants on 17th April 2013 through online banking (Santander)

Question:
1. Are Foxtons correct in their legal stance?
2. Can he reverse the payment to the previous tenants through his bank, or is it too late?
2. What are his options?

wibbler

This is the email he received from Foxtons, sent to both new and old tenants:

"Thank you for your time today and your patience in allowing me to explain the condition of your account. I have cc’d the former tenants so that everyone can be in consideration of where both your and their accounts stand.

Firstly let me begin be saying that I fully aware that my assessment of this account will differ to Ms xxx and Mr xxx in some details. I do not want this to be any distraction from the legal points at hand. I suspect that a reply will follow that may detail complaints with Foxtons customer service, issues during the tenancy with Foxtons (and or the landlord) and, plainly, that we instructed for the deposit to be paid between you.

None of this is denied, but it is equally entirely irrelevant to the matter at hand which is thus.

Mr xxx, you, and your fellow tenants, have never paid the deposit required under your tenancy agreement to Foxtons. Your contract specifically notes that it must be paid to Foxtons and to no other party. As a result of this we urgently require a further £2xxx.xx to be paid to Foxtons.

Failure to provide this payment will result in legal being instigated against you on behalf of the landlord. This will be in the form of a section 8 notice for breach of the tenancy agreement. The notice will take 2 weeks to expire by which time if this matter is not resolved an application for your eviction will be filed.

Ms xxx and Mr xxx – we have covered this ground extensively.

I consider your position to be entirely at odds with both the spirit and the wording of your contract – you are attempting to create a situation where the landlord is not allowed to enjoy his rights under your contract. Any explanation you offer in this regard is nothing more than a smoke screen for the fact that you are intent on breaching your agreement. I must write now to confirm that we still hold your full deposit here and it will be dealt with as per your contract. As a result of this we hold not deposit for the new tenancy and you have received a payment from them in error which you must now return. Should you continue to chose to refuse to make this payment then Mr xxx will have no choice but to try to recover the lost funds from you legally.

I will wait until Wednesday 15th May 2013 before progressing with any legal options available in the hope that a satisfactory solution can be found without the need for legal action to follow."

G_M

wibbler wrote: »

Hi,

A friend has this problem with Foxtons:

- He took over tenancy of a shared house at the 6 month mark, along with 3 others people.
'took over' how? Is he named on the tenancy agreement?
- As the change of tenants came half way through the previous tenant's contract, it was unusual - but it was agreed that if there were 4 new tenants found, the deal could go ahead without a full new tenancy going ahead.
'Agreed' how? In writing? By means of a 'Deed Of Variation'?
- On advice by Foxtons
Foxtons? :eek:
, he paid the deposit to the previous tenants,
terrible advice. Has he anything in writing from Foxons, or the landlord, concerning the deposit?
and the first 6 weeks plus first month to the landlord, Foxtons.
???? He paid a deposit to outgoing tenant, and 10 weeks rent to Foxons? (6 + 4).

- He then signed the tenancy agreement.
* Is he the sole tenant or is this a 'joint and several' tenancy?
* does the tenancy agreement mention th deposit?
- Foxtons have now realised that the deposit payment is not correct, and it should have gone to them (the person advising this is no longer working for Foxtons)
Yup
- Foxtons have not been able to get the amount from the previous tenants due to disputes over the Check Out report.
Not your friend's problem
- Foxtons are now asking for the deposit from my friend.
Too late. He is a tenant and cannot be made to change the terms of his tenancy

Foxtons allege that as the agreement with them states that the deposit should be paid to them, and he hasn't paid it to them, then he is in breach of contract.

They acknowledge that they gave wrong advice, but say that legally that is not an issue - the fact remains that they have not received a deposit from us.
Ah! Possibly. If the TA states a deposit is payable, and it is not paid, then it is owed

Furthermore, they will launch legal proceedings if he does not pay the deposit by Friday next week.
See Q above- has he anything in writing concerning paying the outgoing tenant?
What legal proceedings? Suing for the depsoit? Eviction?
They say that he should launch legal proceedings against the previous tenants to get that money recovered.
That is certainly an option. I assume the outgoing tenant gave a receipt? Why he thought he 'owed' the deposit to the outgoing tenant when he was signing a contract with LL (via Foxton's) is a mystery

Money was paid to previous tenants on 17th April 2013 through online banking (Santander)
Well at least there's a paper trail.

Question:
1. Are Foxtons correct in their legal stance?
2. What are his options?

* Does he know full name AND address ofoutgoing tenant? * Without this he can't sue.
* If he does, he could simply contact him and ask for it! Or sue (though a hard case o prove. He had no legal relationship with the OT, and received nothing from him in return, so there's no contract. Effectively he simly gave the guy a gift!)
* If Foxtons launch legal proceedings, he could join the OT to those proceedings- a judge may well be sympathetic and understand what went on.

The key here seems to be the mis-advice F gave, and whether this can be proved.

princeofpounds

I suspect that a reply will follow that may detail complaints with Foxtons customer service, issues during the tenancy with Foxtons (and or the landlord) and, plainly, that we instructed for the deposit to be paid between you.

None of this is denied,

This is an important passage to have in writing. It shows that verbally they probably did invalidate that clause in the contract, as an agent of the landlord.

I very much doubt a Section 8 would succeed, for a few reasons. Normally it refers to overdue rent, not deposits. the deposit may well not be over 2 rental periods worth of rent. The ground I think they would have to rely on is Ground 12, breach of contract.

It is discretionary by the judge and if you make a good case they should be able to see what is going on here.

But I can't be sure, just an initial thought. Going to have to think about this one!

G_M

we instructed for the deposit to be paid between you.

None of this is denied, but it is equally entirely irrelevant to the matter at hand which is thus.

Indeed. As Prince says.

In fact it is TOTALLY relevant,contrary to what they say!

Any S8 Notice for Breach of contract will be discretionary. ie the judge can decide whether or not to award possession (evict).

Judges do not like evicting without good reason, and I have very little doubt that a deposit mess up like this, which was clearly caused by the agent, will not be seen as 'good reason'.

Do not be intimidated and do not pay a further deposit to foxtons as you will have very little chance of getting it back from the ex-tenants (unless they are cooperative. Which they are unlikely to be unless they get their deposit back from Foxtons!).

Incidentally, the email you quote is further evidence of Foxton's stupidity. No legal adviser would have permitted such an email to be sent in anticipation of legal action. They actually admit their liability!

wibbler

Hi,

Thanks for the answers so far!

In answer to G_M's questions:
- Yes, a new tenancy agreement was made
- There are 2 other new tenants on the agreement.
- The agreement mentions the deposit rules, but not the amount
- The request for deposit is in line with the signed tenancy agreement, so I guess they can still legally ask for it as they have never received it.
- There are only text messages regarding the request for payment from the previous tenants. He never talked directly to Foxtons to confirm about this, although that is a moot point as Foxtons have confirmed they requested as such.
- He is in contact with previous tenants through phone and email, but does not know the forwarding address.

G_M wrote: »

* Does he know full name AND address ofoutgoing tenant? * Without this he can't sue.
* If he does, he could simply contact him and ask for it! Or sue (though a hard case o prove. He had no legal relationship with the OT, and received nothing from him in return, so there's no contract. Effectively he simly gave the guy a gift!)
* If Foxtons launch legal proceedings, he could join the OT to those proceedings- a judge may well be sympathetic and understand what went on.

The key here seems to be the mis-advice F gave, and whether this can be proved.