Letting agents' holding fee

TheJP

propertyrental said:

Elston said:

Thanks to everyone for advice. 
They decided not to proceed with that agent but amazingly, only today, they have found another property, through a different agent, and here is what it says on their website:

"Reserving the property

Once you have decided on a property, you will need to reserve it by paying a ‘reservation fee’, usually one month’s rent. If the landlord declines to grant the tenancy due to unsatisfactory references or if you decide not to proceed for any reason, or if you fail to provide complete and accurate information in your application you agree to forfeit this fee."

How can these agents do this? Surely it is illegal? When they talk about 'references' does this include failing credit search? 

Again. Illegal.

Tenant Fees Act:

Guidance here:

A landlord or agent can take a holding deposit from you to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. A landlord or agent cannot ask you for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property).

A landlord or agent should stop advertising a property once a holding deposit has been paid. Landlords and agents can only accept one holding deposit for one property at any one time. They are not permitted to take multiple holding deposits for the same property.

Landlords and agents must refund the holding deposit in full within 7 days of:

• you and the landlord entering into a tenancy agreement

• the landlord choosing to withdraw from the proposed agreement; or

• the ‘deadline for agreement’ passing without a tenancy having been entered

A holding deposit can only be retained where you:

• provide false or misleading information which the landlord or agent can reasonably take into account when deciding to let a property – this can include your behaviour in providing the false and misleading information

• fail a right to rent check

• decide not to proceed with a tenancy (i.e. you ‘withdraw’ from a property) – unless a landlord or agent imposes a requirement that breached the ban or acted in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them fail to take all reasonable steps to enter into a tenancy agreement (and the landlord or agent takes all reasonable steps to do so, for example, clearly requesting information required to progress the tenancy)

A landlord or agent must return the holding deposit where they impose a requirement that breaches the ban or acts in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them (e.g. a landlord or agent asks you to pay a prohibited payment such as a fee for referencing, seeks to include an unfair term in your tenancy agreement or acts in an aggressive or harassing way).

Surely if you apply to rent a property and if for any reason you fail the reference check then you have been misleading ion your application. My cousin who is a black sheep if you will has done this, rented, been a terrible tenant and moved onto the next and done the same thing (N.Ireland). I'm guessing this is to protect and put off would be bad tenants. If you have nothing to hide then the holding fee goes towards your first payment.

You say its illegal but state they can only hold one holding deposit for a property, how do we know they have multiple holding deposits for that property?

user1977

TheJP said:

propertyrental said:

Elston said:

Thanks to everyone for advice. 
They decided not to proceed with that agent but amazingly, only today, they have found another property, through a different agent, and here is what it says on their website:

"Reserving the property

Once you have decided on a property, you will need to reserve it by paying a ‘reservation fee’, usually one month’s rent. If the landlord declines to grant the tenancy due to unsatisfactory references or if you decide not to proceed for any reason, or if you fail to provide complete and accurate information in your application you agree to forfeit this fee."

How can these agents do this? Surely it is illegal? When they talk about 'references' does this include failing credit search? 

Again. Illegal.

Tenant Fees Act:

Guidance here:

A landlord or agent can take a holding deposit from you to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. A landlord or agent cannot ask you for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property).

A landlord or agent should stop advertising a property once a holding deposit has been paid. Landlords and agents can only accept one holding deposit for one property at any one time. They are not permitted to take multiple holding deposits for the same property.

Landlords and agents must refund the holding deposit in full within 7 days of:

• you and the landlord entering into a tenancy agreement

• the landlord choosing to withdraw from the proposed agreement; or

• the ‘deadline for agreement’ passing without a tenancy having been entered

A holding deposit can only be retained where you:

• provide false or misleading information which the landlord or agent can reasonably take into account when deciding to let a property – this can include your behaviour in providing the false and misleading information

• fail a right to rent check

• decide not to proceed with a tenancy (i.e. you ‘withdraw’ from a property) – unless a landlord or agent imposes a requirement that breached the ban or acted in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them fail to take all reasonable steps to enter into a tenancy agreement (and the landlord or agent takes all reasonable steps to do so, for example, clearly requesting information required to progress the tenancy)

A landlord or agent must return the holding deposit where they impose a requirement that breaches the ban or acts in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them (e.g. a landlord or agent asks you to pay a prohibited payment such as a fee for referencing, seeks to include an unfair term in your tenancy agreement or acts in an aggressive or harassing way).

Surely if you apply to rent a property and if for any reason you fail the reference check then you have been misleading ion your application.

No, I wouldn't say that follows. Especially if you don't know exactly what criteria they're looking for in their referencing process.

TheJP

user1977 said:

TheJP said:

propertyrental said:

Elston said:

Thanks to everyone for advice. 
They decided not to proceed with that agent but amazingly, only today, they have found another property, through a different agent, and here is what it says on their website:

"Reserving the property

Once you have decided on a property, you will need to reserve it by paying a ‘reservation fee’, usually one month’s rent. If the landlord declines to grant the tenancy due to unsatisfactory references or if you decide not to proceed for any reason, or if you fail to provide complete and accurate information in your application you agree to forfeit this fee."

How can these agents do this? Surely it is illegal? When they talk about 'references' does this include failing credit search? 

Again. Illegal.

Tenant Fees Act:

Guidance here:

A landlord or agent can take a holding deposit from you to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. A landlord or agent cannot ask you for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property).

A landlord or agent should stop advertising a property once a holding deposit has been paid. Landlords and agents can only accept one holding deposit for one property at any one time. They are not permitted to take multiple holding deposits for the same property.

Landlords and agents must refund the holding deposit in full within 7 days of:

• you and the landlord entering into a tenancy agreement

• the landlord choosing to withdraw from the proposed agreement; or

• the ‘deadline for agreement’ passing without a tenancy having been entered

A holding deposit can only be retained where you:

• provide false or misleading information which the landlord or agent can reasonably take into account when deciding to let a property – this can include your behaviour in providing the false and misleading information

• fail a right to rent check

• decide not to proceed with a tenancy (i.e. you ‘withdraw’ from a property) – unless a landlord or agent imposes a requirement that breached the ban or acted in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them fail to take all reasonable steps to enter into a tenancy agreement (and the landlord or agent takes all reasonable steps to do so, for example, clearly requesting information required to progress the tenancy)

A landlord or agent must return the holding deposit where they impose a requirement that breaches the ban or acts in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them (e.g. a landlord or agent asks you to pay a prohibited payment such as a fee for referencing, seeks to include an unfair term in your tenancy agreement or acts in an aggressive or harassing way).

Surely if you apply to rent a property and if for any reason you fail the reference check then you have been misleading ion your application.

No, I wouldn't say that follows. Especially if you don't know exactly what criteria they're looking for in their referencing process.

Usually the reference process is pretty straightforward and if the agent is part of a redress scheme. Likely did this tenant rent the property from X, did they pay rent on time, would you let to this tenant in the future. 

The argument here is whether the letting agent is breaking the law which given the information they aren't, unless the OP knows they are holding multiple holding fees to bank many rejections. I've paid a holding fee each time I've rented and I've secured the house apart from my very last rental as i knew the LL previously. Had no issues with the process. Sometimes being too suspect can put you out.

propertyrental

TheJP said:

propertyrental said:

Elston said:

Thanks to everyone for advice. 
They decided not to proceed with that agent but amazingly, only today, they have found another property, through a different agent, and here is what it says on their website:

"Reserving the property

Once you have decided on a property, you will need to reserve it by paying a ‘reservation fee’, usually one month’s rent. If the landlord declines to grant the tenancy due to unsatisfactory references or if you decide not to proceed for any reason, or if you fail to provide complete and accurate information in your application you agree to forfeit this fee."

How can these agents do this? Surely it is illegal? When they talk about 'references' does this include failing credit search? 

Again. Illegal.

Tenant Fees Act:

Guidance here:

A landlord or agent can take a holding deposit from you to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. A landlord or agent cannot ask you for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property).

A landlord or agent should stop advertising a property once a holding deposit has been paid. Landlords and agents can only accept one holding deposit for one property at any one time. They are not permitted to take multiple holding deposits for the same property.

Landlords and agents must refund the holding deposit in full within 7 days of:

• you and the landlord entering into a tenancy agreement

• the landlord choosing to withdraw from the proposed agreement; or

• the ‘deadline for agreement’ passing without a tenancy having been entered

A holding deposit can only be retained where you:

• provide false or misleading information which the landlord or agent can reasonably take into account when deciding to let a property – this can include your behaviour in providing the false and misleading information

• fail a right to rent check

• decide not to proceed with a tenancy (i.e. you ‘withdraw’ from a property) – unless a landlord or agent imposes a requirement that breached the ban or acted in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them fail to take all reasonable steps to enter into a tenancy agreement (and the landlord or agent takes all reasonable steps to do so, for example, clearly requesting information required to progress the tenancy)

A landlord or agent must return the holding deposit where they impose a requirement that breaches the ban or acts in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them (e.g. a landlord or agent asks you to pay a prohibited payment such as a fee for referencing, seeks to include an unfair term in your tenancy agreement or acts in an aggressive or harassing way).

You say its illegal but state they can only hold one holding deposit for a property, how do we know they have multiple holding deposits for that property?

It's always useful to know the law so yes, I said it's illegal.

As 'how do we know', well you can say that about any law. I can drive, illegally, at 90 mph, and no one will know unless/until I happen to pass a speed camera or a police car.

TheJP

propertyrental said:

TheJP said:

propertyrental said:

Elston said:

Thanks to everyone for advice. 
They decided not to proceed with that agent but amazingly, only today, they have found another property, through a different agent, and here is what it says on their website:

"Reserving the property

Once you have decided on a property, you will need to reserve it by paying a ‘reservation fee’, usually one month’s rent. If the landlord declines to grant the tenancy due to unsatisfactory references or if you decide not to proceed for any reason, or if you fail to provide complete and accurate information in your application you agree to forfeit this fee."

How can these agents do this? Surely it is illegal? When they talk about 'references' does this include failing credit search? 

Again. Illegal.

Tenant Fees Act:

Guidance here:

A landlord or agent can take a holding deposit from you to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. A landlord or agent cannot ask you for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property).

A landlord or agent should stop advertising a property once a holding deposit has been paid. Landlords and agents can only accept one holding deposit for one property at any one time. They are not permitted to take multiple holding deposits for the same property.

Landlords and agents must refund the holding deposit in full within 7 days of:

• you and the landlord entering into a tenancy agreement

• the landlord choosing to withdraw from the proposed agreement; or

• the ‘deadline for agreement’ passing without a tenancy having been entered

A holding deposit can only be retained where you:

• provide false or misleading information which the landlord or agent can reasonably take into account when deciding to let a property – this can include your behaviour in providing the false and misleading information

• fail a right to rent check

• decide not to proceed with a tenancy (i.e. you ‘withdraw’ from a property) – unless a landlord or agent imposes a requirement that breached the ban or acted in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them fail to take all reasonable steps to enter into a tenancy agreement (and the landlord or agent takes all reasonable steps to do so, for example, clearly requesting information required to progress the tenancy)

A landlord or agent must return the holding deposit where they impose a requirement that breaches the ban or acts in such a way towards you or a relevant person that it would be unreasonable to expect you to enter into a tenancy agreement with them (e.g. a landlord or agent asks you to pay a prohibited payment such as a fee for referencing, seeks to include an unfair term in your tenancy agreement or acts in an aggressive or harassing way).

You say its illegal but state they can only hold one holding deposit for a property, how do we know they have multiple holding deposits for that property?

It's always useful to know the law so yes, I said it's illegal.

As 'how do we know', well you can say that about any law. I can drive, illegally, at 90 mph, and no one will know unless/until I happen to pass a speed camera or a police car.

But you said what they are doing is illegal thereby making the OP think the letting agent is dodgy when it fact you have no idea if they have broken the law. Its not illegal to take a holding fee and nothing the OP has said states the letting agent has taken multiple holding fees.

dimbo61

I did think that a holding deposit could only  be One week's  rent ?

anselld

Elston said:

Apologies if this is covered elsewhere - all the related posts seem to be a few years old and I know legislation has changed in past few years. 

My son and his wife are completing an application to view a rental property. The agreement states that 1 week's rent must be paid prior to viewing. They've been told that if their application is rejected this will be refunded but if accepted, and they decide to go ahead,  it will be credited to their rent account, so presumably reducing their first month's rent. What they're saying though is that if my son and wife decide after viewing that the property is unsuitable, and do not proceed, the holding fee will not be refunded. I just wanted to know if this is legal in light of the Tenants Fees Act. 

Any guidance would be much appreciated. 

Thanks, E

It seems technically legal within the Tenant Fees Act provided the deposit is only 1 week rent and only one deposit is held at any given time.  However, nobody in their right mind would pay a holding deposit prior to viewing.