Prospective tenant withdraws- effect on deposit?

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  • Prospective tenant withdraws- effect on deposit?

    We've recently decided to rent our house out through an agency as we are moving away. The first couple that came to look at it took it and laid down a deposit with the agency. 3 weeks later, they pulled out.

    Arla have said the tenants get the deposit back after admin fees are deducted etc. The agency we are with have said they keep the deposit and another agency we contacted said we are liable for 3 weeks worth of rent.

    Does anyone know where we stand here as we have lost out 3 weeks worth of inspections and potential tenants? And who is right on who keeps that money?

  • #2
    Originally posted by baxter View Post
    We've recently decided to rent our house out through an agency as we are moving away. The first couple that came to look at it took it and laid down a deposit with the agency. 3 weeks later, they pulled out.

    Arla have said the tenants get the deposit back after admin fees are deducted etc. The agency we are with have said they keep the deposit and another agency we contacted said we are liable for 3 weeks worth of rent.

    Does anyone know where we stand here as we have lost out 3 weeks worth of inspections and potential tenants? And who is right on who keeps that money?
    1. What does your Agreement with Agent say? That must be the starting point: to what Terms of Engagement did you agree?
    2. Again, on what basis and Terms did couple 1 pay deposit? Did they sign anything?
    3. At least for these purposes, ignore ARLA and the other agency.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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    • #3
      My partner is the one dealing with all of this, he says there is nothing in the agreement with regard to if a tenant pulls out.

      We believe the tenants did sign the agreement but i'm unsure as to what it said. My partner just told me that the agency had let us know that the contract had been signed by the tenants.

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      • #4
        Sorry, got that wrong, the other agency said we should get 3 weeks worth of rent. Not that we are liable.

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        • #5
          There'd be no point in a holding deposit if they get it back. I normally keep deposits if people change their minds. Otherwise you wind up with a vacant spell while you find other tenants & you lose rent because of them changing their minds.
          Once I take a property off the rental market the holding deposit is mine. The tenant only gets back in as much as it is taken off the rent when they move in.

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          • #6
            Yes, i find it very strange that the deposit goes back to the people who put it down. Is that not the whole point of the deposit, to stop them from pulling out and wasting valuable time. However, Arla seems to think this is the way it is. And offcourse, as an agency are dealing with it i don't think we have much of a say.

            We personally haven't lost any money yet as we haven't moved out, so we haven't actually been burnt, but the house has been off the market for 3 weeks.

            I was just keen to know what the real deal is meant to be.

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            • #7
              Originally posted by Robin View Post
              There'd be no point in a holding deposit if they get it back. I normally keep deposits if people change their minds.
              Doesn't make it legal though!

              Originally posted by Robin View Post
              Otherwise you wind up with a vacant spell while you find other tenants & you lose rent because of them changing their minds.
              Once I take a property off the rental market the holding deposit is mine. The tenant only gets back in as much as it is taken off the rent when they move in.
              I quite agree with the sentiments, and personally I don't see why it shouldn't be enforceable; however I think you'll find that if ever you get a clued-up 'professional' tenant who wants a deposit returned under such circumstances, then you wouldn't have a leg to stand on in court. The ARLA position you were told about is the correct one as I understand it.

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              • #8
                In "Renting out your property for Dummies 2nd ed" the authors recommend a written agreement about the holding deposit. This doesn't charge the T if he fails your credit searches other than for the searches themselves (ie LL decides not to rent to him) but charges him a daily rent if he refuses to take up the tenancy-from the date he had his application approved up until another T takes the property or 30 days later, whichever is sooner.

                Whether this would stand up in court I do not know-it sounds eminently reasonable, but as Robin is finding out this LL/tenant thing is often not what a reasonable person would expect...

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