Security/Holding Deposit Question

Steven--_3

Hello there,

Last week I had found a property to rent, and the landlord was in a rush to have a tenant in place, despite me not being able to take it on for another month

In order to secure the place, we agreed a security deposit of £1100 (1 months rent), and that I would pay around half of that to take the property off the market, with the remainder of the security deposit to follow the following week when we'd sign contracts after references had been taken. The tenancy was due to commence some 4 weeks after that.

However, the landlords haste to have me secured meant that I had handed over this deposit a mere 24 hours after having first seen the property, and in all honesty, I just hadn't considered all the various pluses and minuses involved

After the drive home, it began to dawn on me that I had made a mistake, so within the hour I had called the landlord and informed them that I wouldn't actually be taking on the property, all of this took place within 24 hours of first seeing the property. They were informed of me changing my mind 1 hour after handing over the deposit and passing referee information.

There was some general grumbling, and he was heading off for the weekend on holiday, so he said I should confirm the decision to him in writing over the weekend, which I did.

I have received nothing back from him, and a brief telephone call (during which he hung up on me), it would appear I won't be getting this money back.

On the receipt he has given me for this money, he has written "non-refundable". Is it the case that I cannot get this money back?

I can understand being held liable for his expenses after being handed the money, and being told I wouldn't be taken it on, but this was one hour! and he hadn't done any work on the tenancy or references during that time.

So is it worth using the governments moneyclaim website to get this money back? As I said, I can understand some expenses being taken, but half of a security deposit for a non-existent contract seems a tad harsh to me, and bordering on an illegal penalty of some kind

How can someone possibly justify keeping £600 for an hours inconvenience renting their property?

Any advice greatfully received !!

Steven

Benefits_Blagger

i think should almost certainly be able to get your money back,since you didnt sign any contracts. but you need to follow the money claim procedure properly, which includes giving him sufficient chance to pay you back (even though we both know he doesnt want to).

you should be able to find the relevant info on the goverment website, but one part involves sending him a letter, where you can state you are willing to compromise a bit, if he isnt then your going to court for the full lot.

Steven--_3

Thanks for the response, I've signed up to moneyclaim, so will go ahead next week when his "please respond" deadline has passed

real1314

but a contract has been formed - a verbal one - and the handing over of a deposit is evidence that this has happened. Imagine if it were the other way. Around ? I paid a deposit but an hour later he let it to someone else?

I would suggest that you put it in writing asap that you no longer wish to take the property and that you would like your deposit returned as you advised by phone within an hour. Ask for a response within 7 days. Keep a copy.

See what the reply says. If he doesn't reply, send another letter stating that you will take legal action if not refunded within 14 days.

I think you may have toaccept some loss though, it could be that the LL missed a newspaper ad deadline and therefore suffered a loss.

How youd go on at court is anyones guess, on the one hand u told him within an hour on the other he was prepared to hold the property for you.

tbs624

I think the OP has a strong case for getting most of his fee refunded. Unfair Contract Terms include those which place one party to the agreement at a disadvantage.Had the LL decided to withdraw within 24 hours he would have suffered no financial loss himself, so it should be an agreement on an equal playing field.

IMO the LL/LA should only be able to retain part of a holding deposit to cover any necessary expenditure involved ,or losses incurred, and in this case they'd be minimal.

Steven--_3

tbs624 wrote: »

I think the OP has a strong case for getting most of his fee refunded. Unfair Contract Terms include those which place one party to the agreement at a disadvantage.Had the LL decided to withdraw within 24 hours he would have suffered no financial loss himself, so it should be an agreement on an equal playing field.

IMO the LL/LA should only be able to retain part of a holding deposit to cover any necessary expenditure involved ,or losses incurred, and in this case they'd be minimal.

Precisely, we're talking 600 quid here for an hour!

Utterly unjustified, but I understand the indecision should enable him to take his expenses, but there shouldn't be any kind of penalty

How could anyone justify keeping someones cash in such a fashion? Legally it may be shakey, but morally its outright theft

real1314

tbs624 wrote: »

I think the OP has a strong case for getting most of his fee refunded. Unfair Contract Terms include those which place one party to the agreement at a disadvantage.Had the LL decided to withdraw within 24 hours he would have suffered no financial loss himself, so it should be an agreement on an equal playing field.

IMO the LL/LA should only be able to retain part of a holding deposit to cover any necessary expenditure involved ,or losses incurred, and in this case they'd be minimal.

Had the LL decided to withdraw the OP could have sued the LL, what they'd have got back is anyones guess though.
However, compare this holding deposit to one on a new build property purchase - until very recently the vendor (builder) would never have lost a penny, possibly in many cases they would have gained, but they were always able to keep deposits that were not followed through.

Having said all that I do think the OP should be able to get most of it back - I'd suggest asking the LL to retain half of 1 weeks rent to cover costs as a last resort.

tbs624

real1314 wrote: »

Had the LL decided to withdraw the OP could have sued the LL, what they'd have got back is anyones guess though.

Yes - but the argument would work both ways: my point is that there needs to be a balance of fairness to both parties. Just as the LL's losses after just 24 hours are negligible, so would a Tenant's be if the LL had phoned to withdraw within 24 hours. It would obviously be different if a couple of weeks had passed by, in which case either side would be likely to have incurred costs of one sort or another. It's this sort of thing that gives LLs a poor reputation.

I think it unlikely that the LL could show that he had turned down numerous other potential tenants within that 24 hrs , who were now all fixed up - he'd need to mitigate his potential losses, and he can surely do that by finding another tenant, and maybe charging for rea-dvertising costs only?