Holding fee and reference check

Pixie5740

I think you need to find out and understand exactly what you are paying for at the moment. From your previous thread, you have paid a £600 holding deposit for a property that someone else has already paid a £600 holding deposit for. According to Shelter:

Some letting agents ask you to pay a holding deposit to reserve a particular property while they check references and prepare the tenancy agreement. By paying a holding deposit you are committing to take up the tenancy so that it is not let to someone else.

Letting agents must provide you with information about holding deposits and any other pre-tenancy payments. This must be clear, accurate and not misleading. Do not pay any money unless you are given written confirmation about how the holding deposit will be used.

The letting agent should make clear if:

the holding deposit will be returned once you move in or if it will later be used as part of your tenancy deposit or rent in advance
any costs or fees will be taken out of the deposit
there are any circumstances in which the deposit will not be refunded
Normally, your holding deposit is returned to you if the landlord decides not to let the property to you after the agency has carried out credit checks or looked into your references. But if you gave inaccurate information about yourself you could lose the money.

Do not pay a holding deposit unless you are certain you want that particular property. If you decide not to move in, the holding deposit might not be returned to you.

Taking holding deposits from multiple prospective tenants would seem to go against this.

Bart1

princeofpounds wrote: »

Sorry to say it, but I just wouldn't deal with this letting agent full stop. This sort of behaviour is exploitative, little better than 'Nigerian' email scams.

I won't deal with ANY letting agent full stop and it baffles me that anyone does.... Landlords that don't go through agents are not hard to find.

Marktheshark

This is already covered by Law, it is just one of those Laws that authority refuses to uphold.

denialanderror

Bart1 wrote: »

I won't deal with ANY letting agent full stop and it baffles me that anyone does.... Landlords that don't go through agents are not hard to find.

I believe this to be very dependent on location, where I am there is a chronic shortage of rental property at all sizes and you'd be very lucky to find something direct with a landlord.


In my current property we deal directly with the landlord but still had to pay fees to an agency of around £250pp + take out an insurance policy to be introduced to the landlord, this agency does seem to have got themselves a near monopoly in the town in the last few years.


On topic - if I were in the position, I wouldn't pay that fee for a speculative application, but I'd be surprised if what they are doing is actually illegal.

Zyx

Just as update, he called me today and said that the landlord accepted my offer and that another "company" is going to be sending me an email with steps to take to allow them to check my references and confirm my employment.

During the call he said that it is mine, obviously not legally but implying that I will definitely be getting the flat post reference check. I will drop him an email and ask him to confirm that the flat will not be shown to anyone else.

Zyx

Another update. He has told me that a company called FCC Paragon is going to contact me to carry out the reference checks. Googling them quickly tells me that they get a lot of complaints or that they take a little long to carry the process out.
Again, I am worried about them messing up. Apparently the offer letter which the agent made me agree to says at the bottom that an unsuccessful reference check means they get to keep the holding fee. The landlord told the agent to decrease the contract length from 24 months (which the agent has come up with himself) to 12 months which I would love to thank him personally for. When I asked the agent for a decrease he told me he would add some idiotic clause instead of simply decreasing it.
Now I am thinking that this useless credit check company will fail me as I have never even had a direct debit in my name or income. Funnily enough I am already paying 6 months in advance on a 12 month contract. I very much doubt risk could decrease any more than that for the landlord so the check should not even be necessary.
I have not received an email from them yet and hope everything will go as planned.

AleMrsT

Any agency charging you BEFORE you view or charging you to register an interest is NOT a good agent. Stay well clear.

Our application fees are non refundable if the references fail, ie, undeclared adverse credit, undisclosed rent arrears, or unverified income. A terms and conditions form is signed alongside the application fee confirming agreement to the terms. We ONLY take one application per property. NO holding fees.

AleMrsT

Zyx wrote: »

Another update. He has told me that a company called FCC Paragon is going to contact me to carry out the reference checks. Googling them quickly tells me that they get a lot of complaints or that they take a little long to carry the process out.
Again, I am worried about them messing up. Apparently the offer letter which the agent made me agree to says at the bottom that an unsuccessful reference check means they get to keep the holding fee. The landlord told the agent to decrease the contract length from 24 months (which the agent has come up with himself) to 12 months which I would love to thank him personally for. When I asked the agent for a decrease he told me he would add some idiotic clause instead of simply decreasing it.
Now I am thinking that this useless credit check company will fail me as I have never even had a direct debit in my name or income. Funnily enough I am already paying 6 months in advance on a 12 month contract. I very much doubt risk could decrease any more than that for the landlord so the check should not even be necessary.
I have not received an email from them yet and hope everything will go as planned.

Do a quick credit check online, if it comes back ok, then you'll be fine with that side of things. They'll speak to your employer and previous landlord too. I've dealt with Paragon, they're ok actually. Just need chasing a bit from the agents point of view, so call this agent EVERY DAY for an update. They'll deal with it quickly if you are constantly bugging them. As before, our fees are non refundable if the application is rejected by the referencing company. The agent incurs fees for processing the application, so why should the agent be out of pocket when a tenant fails because they've lied (which is usually the reason people fail.)

BUT £600 is excessive to say the least! Our fees are £195 for a single application.