Making an offer and failing credit check - while deposit lost?

arthurfowler

Hi there, we are just about to put an offer down on a home to rent and they want two weeks up front as a deposit, plus if offer is accepted credit check fees and their own fee.

We are renting in London. This total amount is quite high as you can imagine. I accept the credit check fees and referencing fees (£180 and £60 per person on top), and the two weeks deposit for the offer will go towards our first month rent (£800).

But if the credit checks fail (I can't see why they would but you never know), it says we lose ALL of the deposit. That is two weeks rent and the fees stated above.

That's £1,000 gone if the credit checks fail. I've never come across such a high amount before, but it's scary as we'd not be able to afford to continue looking after that.

Is this the norm now? This is a big brand high street letting agent. Not some random two Bob letting agency.

arthurfowler

Sorry my subject line doesn't make sense as I was typing on mobile and can't edit it! Haha.

ACG

Why not ask them to do the checks first and show them evidence of the deposit so you can pay once passed?

GrumpyDil

And that's why charges are being bought under control. I've done credit checks myself for a lot less than that so can't see why letting agents think they can charge those sorts of numbers for a little bit of admin on top of the actual cost of the checks.

arthurfowler

ACG is that possible with letting agents?

ACG

No idea, if you dont ask, you dont get.
If not, I would walk away personally. I am not sure how they can keep hold of your deposit as it is supposed to go in to a deposit scheme straight away.

arthurfowler

ACG wrote: »

Why not ask them to do the checks first and show them evidence of the deposit so you can pay once passed?

It's a holding deposit to place an offer, not a tenancy deposit so apparently they can do whatever they like.

Also, it's not just if we fail a credit check, it's if our references prove unsatisfactory. Again I see no reason why, but if our current landlord doesn't leave us a reference, then we also lose the whole amount.

Marvel1

Seems a nice earner for the letting agent, I would try someone else.

arthurfowler

I'm inclined to agree. Shame because it's a great home.

It also says 'we understand your circunstances can change so...' if you need to end the tenancy in your contract period, as long as you pay the fees to remarket and we find someone else you can leave. Fine.

Then it goes on to say:

However, you will still need to cover the landlord’s fees for the remainder of your tenancy, calculated on a pro-rata basis for the unexpired term of the contract.


What does this even mean? Which landlord fees remain after someone else moved in?

arthurfowler

Looking at TPOS website, there is a case which gives this outcome:

https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/a-tale-of-two-tenacies

Outcome

Paragraph 6j of the TPO Code of Practice requires that deductions from deposits for administration where a tenancy does not proceed must be fair, reasonable, take account of the work done and the facts of the situation

To me this sounds like Dexters are going against the TPO code of practice by having the agreement state that the entire holding deposit is held if referencing fails.

Knicknack

How very dodgy. No-one should be at risk of losing a grand just like that, amazing what lettings companies are getting away with these days.