Holding Deposit - Scotland?

Yami_Prem

Hello,

We are in Scotland.

Usually when we let out rooms we take a holding deposit before the move in date, on which we do the contract paperwork (and when they pay the first month's rent in advance), and when the holding deposit becomes the security deposit. For the holding deposit, we just give a written confirmation of receiving the deposit mentioning the address of the property and when the intended move in date is with a signature and date.

Now, we have this particular person who decided to not take the room after two weeks of handing over the holding deposit. This is our first time dealing with this. He demands we return his deposit or he'll take 'legal action'. He has recently offered for us to keep just under a third of it.

I thought the whole point of this deposit was to for things like this. I don't know why they expect me to return the deposit.

So, two weeks ago is when they came and handed over deposit. Yesterday they cancelled.

Do they have the upperhand here (law-wise) or do I not need to worry?

Thanks in advance!

EDIT: I must add, we did have other people interested in the room after this guy paid the holding deposit. So we did miss out on potentials.

Pixie5740

I believe keeping the holding deposit would be unlawful. In Scotland landlords and letting agents can only ask tenants to pay the deposit and rent. Any other fees or deposits such as holding deposits are unlawful.

Shelter Scotland has a very useful pack to help tenants claim back unlawful fees.

Yami_Prem

Pixie5740 wrote: »

I believe keeping the holding deposit would be unlawful. In Scotland landlords and letting agents can only ask tenants to pay the deposit and rent. Any other fees or deposits such as holding deposits are unlawful.

Shelter Scotland has a very useful pack to help tenants claim back unlawful fees.

Ok, thanks.

What would be best practice to avoid this in the future? I'm thinking to avoid the middle step and just get the tenant to sign the contract here and then when they decide they want the room/property, if they have the money with them.

[Deleted User]

It has only happened once to you. Perhaps it should be considered one of the risks of letting out rooms rather than something that should be a cost to the prospective tenant if its an illegal practice?

Do you really want to force an unwilling tenant to live in one of your rooms for the period of the contract (could be more trouble than its worth). I'm sure you can find another tenant pretty quickly if you had a number interested. You could always just contact one of those previous prospective tenants.

Yami_Prem

deannatrois wrote: »

It has only happened once to you. Perhaps it should be considered one of the risks of letting out rooms rather than something that should be a cost to the prospective tenant if its an illegal practice?

I didn't know it was an illegal practice, hence the thread.

Do you really want to force an unwilling tenant to live in one of your rooms for the period of the contract (could be more trouble than its worth). I'm sure you can find another tenant pretty quickly if you had a number interested. You could always just contact one of those previous prospective tenants.

Not sure how you came to the conclusion I was forcing anyone to stay in any of my rooms... :huh:


EDIT:
If you're referring to my last post, then all I'm saying is, instead of holding any sort of deposit, I will instead ask if they want to make the contract now. That way I know they are serious about it. If they don't sign it, then that's good for me too, as I know they are not wasting my time. I was just thinking out loud how other landlords do it. I think this will be best for me.

theartfullodger

It depends on the precise wording of the holding deposit (eg purpose, when refunded based on who-does-what..): But be careful: the courts have been cracking down on evil landlords abusing deposits & their protection processes.

The law in this area is somewhat complex & depends on several acts.. i.e. a great area to get caught out if you didn't get things "Just right".