Here is a blog clinic question from Sandy (not his real name)
I wonder if you could help. I was about to rent a house. I paid the sum of 11,000 GBP into Estate Agent account in anticipation of entering into a tenancy agreement that I shall not now be entering into due to unforeseen circumstances.
I have not entered into a lease or tenancy agreement nor I have I entered into a binding agreement to take a lease.
The document that Estate Agent as the landlords agent, provided me with, clearly specified the consequences of my electing not to take the tenancy.It provides that they will deduct from the deposit a sum to represent reasonable expenses likely to be your administration charge plus any costs of obtaining the reference; and then refund to me the balance.
Unfortunately they refuse to refund me any money. What should I do?
I agree that the administration charges and referencing are unlikely to cost £11,000, which is a substantial sum of money. It may be that they are also entitled to deduct a sum for holding the property back and not letting it to anyone else while dealing with your application.
This is generally an allowable expense, as a landlord can lose out by holding a property for someone who then fails to take it, as other prospective tenants may by then have gone elsewhere, and it will take him longer overall to let it (losing him rental income for that time).
You don’t say how much the rent is, as this may have a significant effect on the sum you are entitled to have refunded. If for example the property is an expensive one, with a rent of say £8,000 per month, then the landlord may be entitled to a significant part of your deposit, particuarly if the property has been withdrawn from the market for some time to process your application.
On the other hand if the rent is considerably less particularly if the £11,000 reflects a payment of several months in advance, then you should definitely be paid the greater part of the money back.
I suspect that you are entitled to most of the money and that it is being wrongly withheld from you. You should write to the agents requesting the money be returned to you within seven days and threaten court proceedings if it is not. If they still fail to pay, issue court proceedings. You can do this yourself using the County Court Money Claim online service.
Note that if the agent is a member of an organisation such as ARLA or the Property Ombudsman you can make a complaint to them about it also.
And trading standards are the guys to go to for this as well. Make a complaint and they can use their powers on the agent.
Also call your council’s housing advice officer or Tenancy Relations Officers and ask them if they know the agent, it will give you an idea of what you are taking on.
If it is a major one, contact head office and put in a complaint, ask them to investigate under threat of publicity.
We dont keep statistics on this but anecdotally I can say that I have seen perhaps a 200 or 300% increase in complaints with dodgy letting agents involved in the past 2 years, in fact most of my time is spent dealing with them, which is a major turnaround
Surely they should at least have written to you explaining exactly what the money is being held for and how they came by that calculation? If not, you clearly need to ask them.
Eleven thousand pounds seems a ludicrously large sum for what would appear to be a holding deposit if what Sandy says – “I have not entered into a lease or tenancy agreement nor I have I entered into a binding agreement to take a lease” – is true.
Sandy should show the document he signed with the agent to a specialist solicitor. The document may have spelt out the consequences for Sandy if he didn’t proceed with the tenancy, but what were the obligations on the other party’s side? – I don’t think a ‘one-way’ agreement would be enforceable.