Tenant pulls out after reference checks, so holding deposit returned in full?

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    #16
    I did and I'm afraid I couldn't follow your point in relation to my response to Berlingogirl.

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      #17
      Agent has come back to say:

      Please see the below terms as per the government website:

      "You must refund the holding deposit where a tenant later enters into a tenancy agreement, the landlord decides not to rent the property, an agreement is not reached before the ‘deadline for agreement’ or if you impose a requirement that breaches the ban and/or act in such a way that it would be unreasonable to expect a tenant to enter into a tenancy agreement with you (i.e. including unfair terms in a tenancy agreement or harassment etc.)"

      So if a tenant says they are pulling out within 15 days they get no refund and if they don't say anything for 15 days they get a refund. I am thinking to respond with the tenant has caused the 15 days of delay, so should therefore lose the deposit. They have been slow to respond and non responsive.

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        #18
        Originally posted by cuttingman View Post
        So if a tenant says they are pulling out within 15 days they get no refund and if they don't say anything for 15 days they get a refund. I am thinking to respond with the tenant has caused the 15 days of delay, so should therefore lose the deposit. They have been slow to respond and non responsive.
        You can think that if you wish, it's a free country.
        You'd be breaking the law if you actually did that, but thinking it is fine!

        You need to return the holding deposit to the 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).

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          #19
          Originally posted by jpkeates View Post
          You need to return the holding deposit to the tenant.
          It has already been returned. My question is whether the agent was correct in doing this. Are you saying there is no reason to ever keep the holding deposit?

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            #20
            There are three situations that allow you to keep someone's holding deposit.

            The tenant provides false or misleading information to the landlord. But, more than that, the information has to be reasonably material to the landlord's initial decision and when the landlord discovered the issue the landlord has to reasonably decide that this is the reason no tenancy should be granted. That's actually quite a tough test that looks like a simple test.

            The landlord/agent does everything that they could reasonably do to enter a tenancy agreement within agreed timescale but the tenant doesn't. Your situation is complicated by the guarantor. The legislation doesn't accommodate a situation where the landlord, agent and tenant all do what they reasonably could, but someone else doesn't.

            The tenant notifies the landlord before the agreed deadline that they have decided not to go ahead.

            In all cases, unless you agree otherwise with the tenant, the deadline is 14 days.

            If you got to day 15 and the tenant hadn't either signed up or said they didn't want to proceed, unless you can show that the prospective tenant tried to mislead you in some fairly significant way or didn't do what a reasonable prospective tenant should do, then your agent was probably right.
            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).

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              #21
              Agent should have contacted the tenant to extent the deadline then and say no resolution, no deposit? Tenant says no and pulls out or says yes and continues to delay, more extensions!?. Tenant's responsibility to ensure guarantor is good to go otherwise they have misled us, so again no return.

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                #22
                Originally posted by cuttingman View Post
                Agent should have contacted the tenant to extent the deadline then and say no resolution, no deposit?
                Yep, they could have agreed an extension, they can't threaten no deposit.
                I'd have thought that after 15 days, any extension would only be a day or two to sort out a final detail or so.
                Otherwise what's the point of the holding deposit in the 1st place?
                Tenant says no and pulls out or says yes and continues to delay, more extensions!?.
                If the tenant pulls out, they forfeit the holding deposit.
                Tenant's responsibility to ensure guarantor is good to go otherwise they have misled us, so again no return.
                That's a tougher one.
                The tenant could argue that they acted in good faith and the proposed guarantor let them down.
                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).

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                  #23
                  From the additional information youve given its clear that the agent had no choice but to refund.The agent had the option to agree a longer period than 15 days, but this should have been written into the holding deposit agreement from the start. In the normal course of events 15 days may be enough and indeed if the tenant really did willfully delay his decision to exceed the deadline, a longer period may not have helped. I dont think its possible to say the agent was negligent as they were just following the law. I think you just have to put it down to a badly thought out peice of legislation.

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                    #24
                    Originally posted by cuttingman View Post
                    in the end she got a different guarantor. Thought all was fine and the references/credit check came back with no problems. Then she said she had found somewhere else
                    Assuming all that happened within the required timeframe, I don't understand how that can be interpreted as anything other than either the prospective tenant notifying "the landlord or letting agent before the deadline for agreement that the tenant has decided not to enter into a tenancy agreement" or "the tenant fails to take all reasonable steps to enter into a tenancy agreement".
                    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                    I do not answer questions through private messages which should be posted publicly on the forum.

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                      #25
                      Originally posted by cuttingman View Post
                      So if a tenant says they are pulling out within 15 days they get no refund and if they don't say anything for 15 days they get a refund. I am thinking to respond with the tenant has caused the 15 days of delay, so should therefore lose the deposit. They have been slow to respond and non responsive.
                      The holding deposit does not need to be repaid if a) no agreement is reached by the deadline b) the landlord (and agent) took all reasonable steps to enter into an agreement and c) the tenant did not take all reasonable steps.

                      Simply not responding for 15 days clearly isn't taking all reasonable steps to enter into an agreement.

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                        #26
                        tatemono,

                        I should have made what I said a bit clearer. I do ask prospective tenants if they have any ccjs or have any court cases for money arrears. I had one T say he had none but it turned out he had 3 so I kept an element of the HD.

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