Unauthorised withholding of holding deposit by letting agent

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    Unauthorised withholding of holding deposit by letting agent

    Hi all,
    I am in a near-legal battle with my letting agent who got axed more than a month ago. Lost list of complaints which will end up TPO way but I'm pondering small claims court as well. Hope you can help.

    1. Agent found a two couples ("in-laws") who wanted to rent my house together. Agreed in principle. References supposedly passed about a month before tenancy due to start. But no contract. 3 days before the start of tenancy I found out that one of couple were marketing my property on Facebook to sublet. I pulled out of the tenancy. The supposedly received £500 from the tenant but refusing to let me know what happened to the deposit despite multiple emails including an official complaint. They claim that as per the contract term it is only to recover the administrative expenses but I looked at the relevant legislation and it says if the tenant provides false/misleading information, it is not repayable.
    Secondly, they haven't provided any breakdown on how much was received, what was deducted if any and what was returned despite a formal complaint- which makes me suspect they withheld the whole money. This is surely against the law and reportable to trading standards?

    2. Same agent found me another potential tenant - we agreed to proceed but again the contract process was quite protracted and I gave a weekend as the deadline to sign the tenancy agreement. The prospective tenant failed to sign and requested a 3rd viewing. I pulled out saying this was it. Now the agency are claiming that I am liable for the whole year of letting and management fee. The wording on the contract is as follows:
    "This Agreement will end immediately if the Landlord withdraws their instruction before the Agent finds a Tenant. Once the Agent finds a tenant who meets the criteria agreed which was agreed with the Landlord, the Landlord must pay the Agent the agreed commission."

    For me, the tenant is someone who occupies the property (need to find a legal definition as there is no definition within the contract) - we never signed the contract and the agent didn't even share the draft contract with me. In fact, we didn't even agree in principle (as my wording in writing was "we can go ahead with xx as long as they agree to .....). Is that enforceable?

    Thanks again,

    #2
    Originally posted by Byrdewear View Post
    Once the Agent finds a tenant who meets the criteria agreed which was agreed with the Landlord, the Landlord must pay the Agent the agreed commission."
    You are at fault. You signed a contract which says "cheat me please".

    The above contractual term in and of itself is a reason not to use this agent. You NEVER agree to an agent handing over the keys to a property unless you specifically agree to the choice of precise tenant and have chosen them yourself.

    Why are you using an agent? The only real reason to use an agent is if you need protecting against your lack of knowledge. Or if you really really trust the agent and your time is more important to you than the fees. This agent is not protecting you at all, knowingly turning you into a potential HMO etc.

    Comment


      #3
      Giving people deadlines to sign agreements and declining repeat viewings isn't going to get a property let.
      Which is the idea.

      The agent is marketing the same property as suitable for one tenant and as a four person HMO.
      What "criteria" for a tenant did you agree to?
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        So how can the agent try and charge a fee for finding a tenant that meets the agreed criteria.

        I can't imagine the cost of converting the property to meet the HMO regulations would be met by the rent charged to a single tenant.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          As to 1, we need to know two things. The first is the terms on which the prospective tenant paid the deposit. That will tell us whether in the circumstances the tenant is entitled to a refund. It will also tell us for what purpose the deposit was paid. If it was to “hold” the property then it is you and not the agent who is holding the property and if it is forfeited it is you who is entitled to it. The second is what your contract with the agent says about the expenses he is entitled to recover from you if a tenant withdraws. If it says nothing then the agent is entitled to nothing from you and cannot deduct anything from the deposit if it is now yours.

          As to 2, we need to consider the meaning of: "Once the Agent finds a tenant who meets the criteria agreed which was agreed with the Landlord, the Landlord must pay the Agent the agreed commission." First, whilst it is true that a tenant "is someone who occupies the property", pragmatically it has to be accepted that, according to context, it can also mean "prospective tenant" or "former tenant". Here, we have to take it to mean prospective tenant. If the contract does not define “the criteria agreed” I think the clause has to fail for uncertainty. If the criteria are defined, I think it has to be implicit that the agent cannot simply find someone who meets the criteria, he has to find someone who meets the criteria and is ready, able and willing to proceed.

          Comment


            #6
            As to holding deposits please see post 10 in this thread: https://forums.landlordzone.co.uk/fo...lding-deposits

            Assuming the deposit can be retained, then the facts and the terms of the agency contract as you report them do not allow the agent to have a claim on the forfeited deposit.

            In the second case from what you say the agent is not entitled to any commission. The basic point about providing a service where the provider is paid by commission is that the provider is paid by results - no result = no commission. However, any case where an agent claims commission where no deal is done is likely to turn on the facts as much if not more than what any contract says; when it comes to facts there can often be some devil in the detail which leads to an outcome the opposite of what was expected.

            Comment


              #7
              Originally posted by Byrdewear
              With regards to the second point, I consulted a solicitor and he was of the opinion that no payment was due.
              That makes two lawyers who think they have no case!

              Originally posted by Byrdewear
              Pragmatically speaking, what makes them (or anyone) think that I would deny a tenant who met the criteria that I set myself so that I could forego the rent and keep the house empty? Would this in itself a valid argument?
              Not really, no. The question to be asked is: Did the agent do what the contract said he had to do to earn his commission?

              Comment

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