Topic: Holding deposit
Resolution wanted - Holding deposit refund
Award - £288.46
What happened?
The tenant said:
- she arranged to view the property on 13 July
- two days later, the agent confirmed the landlord agreed to proceed and confirmed the monthly rent amount
- on the same day, she paid a holding deposit equivalent to one weeks’ rent
- three hours later, she requested a refund after deciding the move in date was too soon
- there was also a suggestion that the landlord may want to sell the property in the near future
- the agent refused, saying that the holding deposit was non-refundable and offered a conditional agreement to delay the move in date and not sell the property until the tenancy ended which she declined
- on 3 August, she asked the agent why the holding deposit and it was a prohibited fee under the Tenant Fees Act 2019 (the Act) as they just ignored all her communications
The agent responded that:
- the property was taken off the market, after the tenant made an offer to rent the property and paid the holding deposit
- the referencing application was processed before the tenant somewhat confusingly said they did not want to proceed and then asked if she could move in at the beginning of August
- the tenant was asked to confirm her position by24 July and only responded on 3 August. This was past the deadline for agreement date and the holding deposit did not need to be refunded in line with the holding deposit agreement
What evidence was provided?
Emails, holding deposit form, text screenshots
What was decided and why?
- The evidence showed the prospective tenant paid the holding deposit on 15 July
- This made the deadline for agreement date the 30July (day 15 after the holding deposit was paid) which both parties agreed to
- The agent if they were going to enter into the agreement
- The agent offered the prospective tenant until the 24 July to confirm their position. They took all reasonable attempts to make sure the tenancy was going ahead, but heard nothing more until after the30 July when it became clear, the tenancy was not going to start
- While the prospective tenant had not kept to the 'deadline for agreement’ date:
i. The clause in a holding deposit saying the holding deposit is non-refundable is an unfair clause
ii. the agent had not provided the reasons for keeping the holding deposit, in writing within 7 days after the ‘deadline for agreement’ has passed - As the holding deposit rules under the Tenant Fees Act 2019 (TFA) had not been followed, the holding deposit was to be fully refunded to the tenant
How can you avoid this happening in future?
- A tenant must be clearly told why you are requesting a holding deposit, the amount required and in what circumstances it can be retained
- Just taking a holding deposit and saying that it is non-refundable is not allowed
- Where a tenancy does not go ahead, the tenant is entitled to be refunded with a portion of the holding deposit where it is reasonable to do so. All deductions from the holding deposit should be justified
- Following the introduction of the TFA, a holding deposit must be refunded where a tenant does move in unless it is agreed that it can used as part of the depositor the first months’ rent
- If the TFA, rules for retaining the holding deposit are not followed, it will be fully refundable to the prospective tenant or to the person who paid it
