I have paid a holding deposit, but the lettings agent is trying to accept other offers!

peoplepower555

Hi, i have searched the internet for quite a while and also this forum, but haven't been able to find anything that gives me a definitive answer to this.

In short, i have been hunting for a new apartment to rent for a long time and finally today we have agreed on the perfect place. We submitted the offer on Friday (08.09.23), then on Sunday (10.09.23) the landlord emailed the agent and accepted our offer. Today (11.09.23) my agent called me around 1pm and told me we had secured the apartment. She sent us a Tenancy Application Form (which we immediately signed) and also an online link to pay the holding deposit. At about 1:50pm, i paid the holding deposit and received a confirmation email from the agent that it has been received.

Half an hour later, my agent messaged me via Whatsapp. She said that her colleague was also trying to fill flat with his own potential tenants. He had arranged multiple viewings this morning whilst she was off work (she started at 1pm today). My agent said that her manager had spoken to her and because the other agent had already arranged viewings, his potential tenants would be able to submit offers to the landlord too for consideration. This is in spite of us already paying a holding deposit today and the landlord accepting our via email offer yesterday.

My question is where do we stand from a legal perspective? Can the estate agent back out now? Is the holding deposit not legally binding? I am hoping someone can provide answers. Because it would be heartbreaking to be gazumped now, and it doesn't feel legal to be honest!

MattMattMattUK

peoplepower555 said:

Hi, i have searched the internet for quite a while and also this forum, but haven't been able to find anything that gives me a definitive answer to this.

In short, i have been hunting for a new apartment to rent for a long time and finally today we have agreed on the perfect place. We submitted the offer on Friday (08.09.23), then on Sunday (10.09.23) the landlord emailed the agent and accepted our offer. Today (11.09.23) my agent called me around 1pm and told me we had secured the apartment. She sent us a Tenancy Application Form (which we immediately signed) and also an online link to pay the holding deposit. At about 1:50pm, i paid the holding deposit and received a confirmation email from the agent that it has been received.

Half an hour later, my agent messaged me via Whatsapp. She said that her colleague was also trying to fill flat with his own potential tenants. He had arranged multiple viewings this morning whilst she was off work (she started at 1pm today). My agent said that her manager had spoken to her and because the other agent had already arranged viewings, his potential tenants would be able to submit offers to the landlord too for consideration. This is in spite of us already paying a holding deposit today and the landlord accepting our via email offer yesterday.

My question is where do we stand from a legal perspective? Can the estate agent back out now? Is the holding deposit not legally binding? I am hoping someone can provide answers. Because it would be heartbreaking to be gazumped now, and it doesn't feel legal to be honest!

Presuming that you are in England or Wales the "holding deposit" has no legal status and the landlord is free to accept any other offer they wish to accept. 

propertyrental

which country?
assuming england, which ombudsman scheme does the agent belong to? eg the https://www.tpos.co.uk/images/documents/rules-codes-obligations/residential-letting-agents/Code_of_Practice_for_Residential_Letting_Agents_-_Effective_1_October_2016.pdf

says

9d A tenant, whose offer has been confirmed as having been

accepted in principle, must be given written confirmation as

to whether or not the marketing of the property is to cease

and/or if further viewings will be carried out by you whilst their

tenancy application is processed. If marketing and/or viewings

are subsequently recommenced by you the tenant must be

promptly informed.

9i You must take reasonable steps to keep tenants who have

made an offer and which has not already been rejected

informed of the existence (but not the amount) of other offers

submitted. You must not misrepresent to either the landlord

or a tenant the existence of, or any details of, any other offer

allegedly made or of the status or circumstances of any other

person who has made an offer.

9j Where you take a holding deposit from a tenant this deposit

must be treated as clients’ money (*) except insofar as it will

be used to meet the costs of referencing and other reasonable

administration charges. You must explain the purpose of the

holding deposit and its use before any tenant is committed

to paying.

Additionally the Tenant Fees Act 2019 applies.  The guidance to agents  is :

HOLDING DEPOSITS Q.
What is a holding deposit?
A landlord or agent can take a holding deposit from a tenant to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. You cannot ask a tenant for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property). For example, if there are three tenants who are jointly liable for the agreed total weekly rent of £240, you cannot charge each tenant a £240 holding deposit. The maximum this group of tenants could be asked to pay as a holding deposit between them would be £240. They may then choose to split this equally so that each person would pay £80. You 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. You are not permitted to take multiple holding deposits for the same property unless you have been permitted to retain an earlier holding deposit. The cap of one week’s rent on holding deposits is an upper limit and not a recommendation. You are not obliged to take a holding deposit and should consider on a case by case basis whether it is appropriate to take a holding deposit and the appropriate level of deposit to take. 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/922898/Tenant_Fees_Act_2019_-_Guidance_for_landlords_and_agents.pdf

peoplepower555

propertyrental said:

which country?
assuming england, which ombudsman scheme does the agent belong to? eg the https://www.tpos.co.uk/images/documents/rules-codes-obligations/residential-letting-agents/Code_of_Practice_for_Residential_Letting_Agents_-_Effective_1_October_2016.pdf

says

9d A tenant, whose offer has been confirmed as having been

accepted in principle, must be given written confirmation as

to whether or not the marketing of the property is to cease

and/or if further viewings will be carried out by you whilst their

tenancy application is processed. If marketing and/or viewings

are subsequently recommenced by you the tenant must be

promptly informed.

9i You must take reasonable steps to keep tenants who have

made an offer and which has not already been rejected

informed of the existence (but not the amount) of other offers

submitted. You must not misrepresent to either the landlord

or a tenant the existence of, or any details of, any other offer

allegedly made or of the status or circumstances of any other

person who has made an offer.

9j Where you take a holding deposit from a tenant this deposit

must be treated as clients’ money (*) except insofar as it will

be used to meet the costs of referencing and other reasonable

administration charges. You must explain the purpose of the

holding deposit and its use before any tenant is committed

to paying.

Additionally the Tenant Fees Act 2019 applies.  The guidance to agents  is :

HOLDING DEPOSITS Q.
What is a holding deposit?
A landlord or agent can take a holding deposit from a tenant to reserve a property whilst reference checks and preparation for a tenancy agreement are undertaken. You cannot ask a tenant for more than one week’s rent as a holding deposit (this cap is based on the total agreed rent for the property). For example, if there are three tenants who are jointly liable for the agreed total weekly rent of £240, you cannot charge each tenant a £240 holding deposit. The maximum this group of tenants could be asked to pay as a holding deposit between them would be £240. They may then choose to split this equally so that each person would pay £80. You 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. You are not permitted to take multiple holding deposits for the same property unless you have been permitted to retain an earlier holding deposit. The cap of one week’s rent on holding deposits is an upper limit and not a recommendation. You are not obliged to take a holding deposit and should consider on a case by case basis whether it is appropriate to take a holding deposit and the appropriate level of deposit to take. 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/922898/Tenant_Fees_Act_2019_-_Guidance_for_landlords_and_agents.pdf

They are a member of this Ombudsman, yes. I was told we had secured it via Whatsapp and a call. Then an hour later was told that because there had been a viewing that morning and before we'd paid the holding deposit, they must consider that offer. Thank you for this info, however not sure there is much we can do. As it stands we are still waiting on the landlord to choose to either stick with us or go with the other offer.