Tenants 'ripped off' by letting agents keeping deposits

sitesafe

This was on BBC News this morning - letting agents taking huge holding deposits and then at the last minute saying the property isn't available but then they don't return the deposit. Very sad for the lady involved as she is a single mum and then had no deposit to put on another place

http://www.bbc.com/newsbeat/26326033

jjlandlord

This is why there is a small claims track: to make it easy to sue.
In addition, if planned this is theft and/or fraud.

Shelter is just pushing its agenda using an issue already covered by existing law, as rightly pointed by the Housing Minister.

Heliflyguy

jjlandlord wrote: »

This is why there is a small claims track: to make it easy to sue.
In addition, if planned this is theft and/or fraud.

Shelter is just pushing its agenda using an issue already covered by existing law, as rightly pointed by the Housing Minister.

In the mean time the person is out of pocket and as for existing law one agent in the article had been investigated since last summer with other alleged cases going back to 2009 so clearly the law isn't working.

The law should be proactive not reactive, cant see why the UK government cant just do as Scotland has done.

And to add do you really believe the rouge agent will pay up when they have judgement against them, we all know how that pans out.

jjlandlord

If you start forbidding fees because of the risk of rip off, you can just ban money altogether...

However, note that the article mentions deposits, not fees. Scotland bans fees.

If you have a judgement against the agent, he will pay or close shop.
He will pay because when he does not you will send bailiffs to seize his goods.

Again, the law is there, people should use it.

Heliflyguy

I believe that the holding deposit must be returned to the tenant in Scotland even if they decide not to take the tenancy if its not returned it becomes a fee.

Either way this should not be happening and what good would bailiffs be when the company has dissolved and has no assets, companies who are doing this are well aware of the steps they need to take to protect their ill gotten gains.

So does the Scottish model work or not are people better protected? I am honestly interested

N1AK

Heliflyguy wrote: »

The law should be proactive not reactive, cant see why the UK government cant just do as Scotland has done.

The law being proactive has its own downsides. If people can't take deposits from potential tenants then they are likely to discriminate against groups with higher odds of dropping out, they are also more likely to leave signing paperwork etc to the last minute and cancel agreed lettings if someone can come in sooner or is less likely to cancel.

It seems to me that re-active laws are fine as long as they are not so slow. If someone is withholding your money for a service they then don't supply it shouldn't be taking months, let alone years, to deal with it. If it turns out that what they are doing is intentional, and thus fraud, the penalties should be extremely severe.

jayss

I know people who have been told they need to pay a holding deposit for a property only for the letting agent to tell them after paying it that actually the money was to move them to the top of the preferred list for the landlord and they hadn't secured the property.

They raised hell in the office and got it back but it was clearly a tactic the agent got away with often.

I've paid for referencing fees and not had any of them checked. It's a frustrating and expensive process without the shysters ripping people off on top.

jjlandlord

Heliflyguy wrote: »

I believe that the holding deposit must be returned to the tenant in Scotland even if they decide not to take the tenancy if its not returned it becomes a fee.

It is arguable that this is also the case in England in most cases.

Heliflyguy wrote: »

Either way this should not be happening and what good would bailiffs be when the company has dissolved and has no assets, companies who are doing this are well aware of the steps they need to take to protect their ill gotten gains.

What do you propose, then?

This will always be the case. People whose aim it is to steal and commit fraud will do it.

At one point, people should stop whining about everything and take responsibility to protect themselves, read what they are asked to sign, question what they are paying for, ask for written proofs, etc.

Many people don't think, then complain that the government should have protected them... Well, I tell you: You don't want to leave in a country that has followed that path.

Heliflyguy

So its "arguably" the case in most cases...so not the same then.

What do I propose! I have no idea, how about being banned from ever running another company or off to prison you go, do you have a suggestion?

I guess were all up for being ripped off by someone.

I dont quite understand if that last sentence is in answer to if the Scottish model better protects people or not, if it is then that's a pretty damming remark to those living there (pre independence vote)

jjlandlord

Heliflyguy wrote: »

So its "arguably" the case in most cases...so not the same then.

Holding deposits are refundable except in special cases. There is no issue with holding deposits as long as people stand up for themselves.

Heliflyguy wrote: »

or off to prison you go, do you have a suggestion?

That's already the case isn't it?
My suggestion is what I said earlier: The law is there.

nadirnwo

Many agents have fine print below Holding Deposit receipts which states that if the tenant backs out you loose the holding deposit. Until you don't hand over the holding deposit they wont show you a copy of the contract. If you don't agree with a clause in the contract, they will tell you to walk away and forgo the holding deposit. Now either people don't know that this cant be done. Or agents are exploiting a loophole that allows them to demand a holding deposit and then claim that none of the terms are negotiable.