Withholding Deposit in lieu of fees?

bluebaron

Wernal,

You are quite right I have indeed muddied the water!

I have spoken to the tenant and told them I can no longer honour my agreement to pay them directly and that they have to get the deposit back form the agent directly. They may of course argue that the deposit has already been signed over to me but the tenant will counter-argue that he did that in good faith of getting the money form me!

Then if the agent still thinks I owe them money for doing nothing for 3 years then they can sue me. I am quite happy that I have a strong case in my defence.

bluebaron

UPDATE:

Agent has refused to return deposit to tenant stating that they signed it over to me 2 weeks ago so had plenty of time to cash the cheque. I had told them not to cash it until I had deposit from agent which is why the didn't. I have now washed my hands of the issue and told them its now an issue between the tenant and the agent.

Looking around it seems that this is quite a common scam by agents to charge renewal fees. In fact several court cases have been fought, and lost by LA's on this issue.

Werdnal

So you gave the tenant a cheque for deposit as they needed it for a deposit on their new property, but you now say you told them not to cash it until you have got the original deposit back from the agent - how does this work?

If you asked them not to cash it, why on earth did you give the tenant a cheque as they could easily have got the deposit back direct from the agent in the same timespan. How have they met the requirement for their new deposit if the cheque is uncashed.

You are now walking away from a situation you created and leaivng the tenants to fight the agent for the deposit back. I hope the tenant has cashed your cheque and got their money as you created this problem for them, so you should sort it out!

I hope you realise that LL is ultimately responsible for ensuring the tenant gets their deposit back, so if the agent won't budge and you cancel the cheque, tenants can sue you!

bluebaron

Sorry wasn't very clear, they did indeed ask for cash but when we checked them out they said they no long had an urgent need for the money as they were moving in with friends. As it was a Saturday and the bank was shut we agreed that a chq would work out. As it was already set up with the agent for me to collect the deposit we thought is easier to do it that way.

We are still on very good terms with the tenant and he has agreed that the agent is very bad and as such we are really fighting this together as a Joint effort. I will of course see that he has the money back but form a legal standpoint by arguing that it is still his money the agent can't 'steal' it!

Sorry for confusion.