Holding Deposit

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    Holding Deposit

    I recently received some cash from a prospective tenant before signing any form of contract. No receipt was given for the cash Nordid I complete a holding deposit form. With this in mind no agreement had been made and no terms or conditions were assigned to the cash - I simply had his cash to hold the property for him. On signing of the contract I would then use the cash as his bond.
    One week later he contacted me to say that he had changed his mind and demanded the full amount of cash back. I told him this was not acceptable as I had turned a tenant away the following day and would now have to re advertise. I offered him all the cash back minus my calculation of my losses (around £140)
    My question is do I have any legal right to withhold any of his cash?
    Thanks

    #2
    When you took the money from the applicant what was said exactly. Surely he did not say 'here mate have some dosh and I don't want it back'? What was said at that exchange would IMO form a verbal contract. You are calling the cash 'holding deposit' so what sort of let or tenancy was this for?

    Did the applicant not ask for a receipt?



    Freedom at the point of zero............

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      #3
      Originally posted by Interlaken View Post
      When you took the money from the applicant what was said exactly. Surely he did not say 'here mate have some dosh and I don't want it back'?
      Wouldn't surprise me actually: I quite often find that when I show a prospective tenant round that if they really want the place they will attempt to throw money at me there and then, without giving any thought to T&Cs. They might want a receipt, but other than that, just assume it will come off the total amount they need to pay when they move in (which is probably a reasonable assumption) but give no thought to the possibility that that might not actually happen.

      When we do get to deposits, it's always me who explains the T&Cs and produces the paperwork.

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        #4
        Originally posted by Interlaken View Post
        Surely he did not say 'here mate have some dosh and I don't want it back'?
        Well, no because that's the default position. The point is rather what right has OP to keep the money?

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          #5
          I have a vague recollection that if no terms were agreed then £££ is returnable, less any clear & provable losses - but have no evidence to back that up, and perhaps that only is the case if there is a contract which, arguably, there isn't in this case..

          Certainly ANY monies taken should be with a receipt (written, email...) with brief terms....
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            I would argue that an oral 'contract to create a tenancy' has been formed. If the tenant is in breach of contract then the landlord can indeed claim any mitigated costs/losses that this breach has caused.

            Of course, if it went to court, could you prove your costs/losses and prove that they were kept to an absolute minimum?

            This may be an interesting read http://www.landlordzone.co.uk/forums...d-for-security

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              #7
              Originally posted by Snorkerz View Post
              I would argue that an oral 'contract to create a tenancy' has been formed.
              So no need to carry out reference checks anymore, then?

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                #8
                It was strange but pretty much nothing was said about the cash that was handed over and a receipt wasn't requested. I counted the money, put it in an envelope and presumed it was mine to hold the house for him.
                The let was going to be an AST - just very standard really. No agents, annual rental well under £25000. So pretty standard really.
                He is threatening small claims court for any of the money not returned!
                Thanks for your reply

                Comment


                  #9
                  Originally posted by Jonnotsowise View Post
                  It was strange but pretty much nothing was said about the cash that was handed over and a receipt wasn't requested.
                  So what evidence could you produce to support your assertion that you are entitled to keep any of this money?

                  IMO you should make your procedure a bit more professional. Nothing said, and mo paperwork is a good recipe for trouble.

                  Comment


                    #10
                    Originally posted by Snorkerz View Post
                    I would argue that an oral 'contract to create a tenancy' has been formed.
                    Originally posted by jjlandlord View Post
                    So no need to carry out reference checks anymore, then?
                    I would think that in this situation it is not a case of 'no need' but rather without having put anything in writing, the landlord has rather shot himself in the foot if the references come back negative when such a contract has been agreed.

                    Comment


                      #11
                      Originally posted by jjlandlord View Post
                      So what evidence could you produce to support your assertion that you are entitled to keep any of this money?

                      IMO you should make your procedure a bit more professional. Nothing said, and mo paperwork is a good recipe for trouble.
                      I quite agree. I should have been more professional in this instance. I'll take this as a learning experience! No harm done.

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