Estate agent retaining holding deposit

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Estate agent retaining holding deposit

    Hello all,

    I was in the final stages of closing on a rental property when i was informed that after further inspection of my financial situation, the landlord had rejected the offer.

    To secure the viewing, I overstated my income. I didn't think much of it at the time (it's my first time renting) and didn't think this would be taken as an "official" declaration. It is a legal requirement to provide this information in order to book a viewing? If not, I find it strange they could use this against me.

    When it came time to fill out the offer sheet, I was honest regarding my income, I pointed out to the estate agent that I made a mistake and although my declared income is insufficient to qualify, I had a guarantor and the ability to pay a number of months rent in advance. The estate agent advised me to proceed with referencing.

    The referencing obviously came back showing insufficient income which lead to the landlord rejecting my offer.

    I understand that based on providing misleading I am not entitled to my holding deposit back. However, I believe it shouldn't have got that far. When I pointed out my mistake to the agent they should've stopped the process.

    Additionally, I stumbled, via Google, onto information stating they have a week to inform me in writing that my deposit will be retained. I was informed of the landlords decision last Thursday 1pm and was only informed in writing (after repeated chasing) the following Thursday at 4pm! (more than a week?) Is this true? I would like to be able to quote a better source to the estate agent than Google!

    I'm happy to admit I made a mistake. I will learn from that going forward. However, this is a well known, reputable estate agent in NW England, I would've expected more from them.


    Thanks for reading this far and for any advice offered!

    #2
    Originally posted by Davethewave View Post
    To secure the viewing, I overstated my income. I didn't think much of it at the time (it's my first time renting) and didn't think this would be taken as an "official" declaration. It is a legal requirement to provide this information in order to book a viewing? If not, I find it strange they could use this against me.
    They're not "using this against you".

    Everything past the point in your post after I lied about my income is, essentially, irrelevant.
    You're basically complaining that you were allowed to proceed in an attempted fraud further than you should have been allowed to and it's cost you money.

    Lots of prospective tenants lie about their income, and I doubt the agent was the slightest bit surprised and just carried on as a matter of routine.

    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


      #3
      Whether you are entitled to get the deposit back depends on the terms on which it was taken.

      Comment


        #4
        Did you pay the Holding Deposit when you lied about your income OR after you had corrected the error and filled out the Tenancy Application?

        IF you paid the HD when you lied, the LA and LL are obliged to remove the property from further marketing - so they are entitled to keep your HD.

        However, IF you paid the HD after you'd corrected the income declaration and at the time of filling in the Tenancy Application then I think you should have got your HD back - you gave the truth in the application and the LA / LL are only entitled to keep your HD if you gave materially false information (which on the form you did not).

        Could there be other things which came back from the Referencing which you failed to declare or lied about?
        My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

        Comment


          #5
          Whether the OP is entitled to get the deposit back depends on the terms on which it was taken.

          Comment


            #6
            Originally posted by Lawcruncher View Post
            Whether the OP is entitled to get the deposit back depends on the terms on which it was taken.
            Plus the legislation relating to the deposit.

            The deposit can be retained "...if the tenant provides false or misleading information to the landlord or letting agent and—

            (a)the landlord is reasonably entitled to take into account the difference between the information provided by the tenant and the correct information in deciding whether to grant a tenancy to the tenant, or

            (b)the landlord is reasonably entitled to take the tenant’s action in providing false or misleading information into account in deciding whether to grant such a tenancy."
            I think it would be reasonable for b to apply, even if the tenant corrected their initial lie during the process.

            And I think that there has been a fair outcome.
            The OP tried to deceive the landlord/agent and has been caught out and suffered as a consequence.
            Bet they don't do it again and the landlord/agent has been compensated for the time they wasted and the costs they incurred.
            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


              #7
              Originally posted by jpkeates View Post
              Whether the OP is entitled to get the deposit back depends on the terms on which it was taken.
              Which is exactly the point I was trying to convey.

              If the Applicant gave misleading information but no Holding Deposit was taken at that stage, then nobody has suffered a loss as the LA / LL can still market the property and invite Applications.

              If the Applicant was invited to complete a Tenancy Application, entered misleading info and paid the HD at that stage then the LA / LL cannot accept further applications and may suffer a loss IF false / misleading info was discovered at the referencing stage. The LL would be entitled to retain the HD.

              Given that the Applicant advised the LA of his real income and entered the true information on the Rental Application, was then advised it would likely fail referencing but offered a Guarantor, it is then purely a decision to let or not by the LL but the HD should be returned if the LL simply decides not to proceed with the Applicant.



              jpkeates,

              It has not been established whether the Applicant provided factual information when he paid the Holding Deposit?

              Surely, the point at which the HD is accepted is the point the LA / LL might reasonably have began to suffer a loss ie by not accepting other viewings and therefore the potential delay in securing a tenant and loss of rent during that period.

              If the Applicant provided factual info at the stage the HD was accepted but failed the referencing purely on income then it's simply the LLs choice not to rent so the HD should be returned.

              My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

              Comment


                #8
                Originally posted by landlord-man View Post
                Surely, the point at which the HD is accepted is the point the LA / LL might reasonably have began to suffer a loss ie by not accepting other viewings and therefore the potential delay in securing a tenant and loss of rent during that period.

                If the Applicant provided factual info at the stage the HD was accepted but failed the referencing purely on income then it's simply the LLs choice not to rent so the HD should be returned.
                There's no time restriction in the legislation, so the landlord could make a decision on the entire interaction.

                I suspect that (ignoring that) the landlord wasn't actually involved and the agent has simply taken the deposit.
                Which they aren't entitled to do, full stop.
                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


                  #9
                  But until the Applicant pays a Holding Deposit and the LA / LL accepts it, then there is no "agreement" nor any interaction other than an enquiry.

                  Until that point the LA / LL can accept as many enquiries as they wish just as the Applicant is free to make enquiries elsewhere.

                  Imagine if a LA / LL was held accountable for every comment or vague gesture they made prior to an Agreement being reached - wouldn't that be fun.
                  My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

                  Comment


                    #10
                    Originally posted by landlord-man View Post
                    But until the Applicant pays a Holding Deposit and the LA / LL accepts it, then there is no "agreement" nor any interaction other than an enquiry.
                    You can imagine a scenario where the agent says to the landlord this tenant is marginal, so it's your call, by the way he initially lied about his income.

                    Once you start off any process by lying, I think the odds of a successful outcome are remote.
                    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


                      #11
                      Originally posted by jpkeates View Post
                      by the way he initially lied about his income.
                      He did, and he admitted such to the LA , and the LA went on to accept his Application.

                      (1) Paid HD when he lied = no refund

                      (2) Paid HD when he truthfully completed Application = refund


                      My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

                      Comment


                        #12
                        The Tenant Fees Act says:

                        "In this Act “holding deposit” means money which is paid by or on behalf of a tenant to a landlord or letting agent before the grant of a tenancy with the intention that it should be dealt with by the landlord or letting agent in accordance with Schedule 2 (treatment of holding deposit)."

                        The problem with that is that it does not say what a holding deposit actually is.

                        So I think in each case you have to look at what exactly paying the deposit was supposed to achieve. A deposit has to back some sort of agreement. What was the agreement and what were it terms?

                        Comment


                          #13
                          Originally posted by Lawcruncher View Post
                          The problem with that is that it does not say what a holding deposit actually is.
                          With the Tenant Fees Act, I think it doesn't really matter what either parties think the "holding deposit" is for. There's only so much the landlord or their agent can do with such a payment. They can only take one holding deposit, and they are required to return the holding deposit unless one of the explicitly specified grounds are met.

                          The landlord decided to let to somebody else, return the holding deposit. The landlord don't make a reasonable effort to reach agreement, return the holding deposit. The landlord simply decided they don't like the look of the prospective tenant, return the holding deposit.

                          Let's say "but what about if the payment isn't a holding deposit as envisaged by the Tenant Fees Act?". Then it's not a permitted payment in the first place. So either landlord isn't entitled to take the payment at all, or the rules on whether it has to be returned under Schedule 2 applies.
                          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.

                          Comment


                            #14
                            Originally posted by landlord-man View Post
                            He did, and he admitted such to the LA , and the LA went on to accept his Application.
                            The problem for OP is that the Act says:

                            Paragraph 3(b) or (c) does not apply if the tenant provides false or misleading information to the landlord or letting agent and—

                            (a) ...., or

                            (b) the landlord is reasonably entitled to take the tenant's action in providing false or misleading information into account in deciding whether to grant such a tenancy.
                            OP did provide false or misleading information to the letting agent by their own admission.

                            So it comes down to whether (b) applies. There's no temporal restrictions on when the information was provided or when the landlord found out about the false or misleading action. Even if it's a small claims court (since only one week rent), you wouldn't really want to sue knowing the decision is solely dependent on the judge's decision on reasonableness.
                            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.

                            Comment


                              #15
                              Thanks for all the responses so far.

                              Just to clarify;

                              1. The holding deposit was paid after the offer sheet was submitted with the correct income information.

                              2. Once the estate agent was notified regarding my initial mistake, I was advised to continue with the process. Their error compounded my mistake.

                              3. Am I obliged the provide detailed information regarding my income in order to book a viewing? If not, I don't understand how they could use this information against me. I understand it wouldn't occur to them that I'm lying, but if that information isn't an official signed declaration, surely it would inconsequential, especially since I may not even be required to provide it (my assumption).

                              4. On page 11 of the Tenancy Fees Act (thanks to whoever referenced that), it says that I must be notified in writing within a week of the agent retaining my deposit, based on the timeline I provided in my original post (landlords decision last Thursday 1pm and was only informed in writing (after repeated chasing) the following Thursday at 4pm!), I believe that's more than a week and all the above regarding the misleading information is irrelevant, they must return the deposit regardless.


                              Thanks again.

                              Comment

                              Latest Activity

                              Collapse

                              Working...
                              X