Holding deposit
Submitted by Sabbri on Thu, 01/07/2010 - 11:52
Students property was viewed and chosen by one of five through a letting agent. The other four were abroad. Holding deposit and first months rent was paid in good faith by the parents. When the four returned and viewed the property, decided it was in a bad state and changed their minds.
No holding deposit or tenancy agreements were signed. No terms of the holding deposit were set out. Never told any circumstances under which we may or may not get the money back at the outset.
What happens to the holding deposit and first months rent?
Can we get one or both back if the letting agent failed to follow the correct procedures.
Thank you for your help
Hi Sabbri,Whether you can
Hi Sabbri,
Whether you can get the holding deposit and the first months rent back will depend entirely on the terms and conditions of the verbal agreement between the student and letting agent as there appears to be no formal written agreement relating to either the holding deposit or formal tenancy agreement.
If no terms and conditions were specifically dicussed and no contract (tenancy agreement) has been signed it could be argued by the students or their parents that the holding deposit and first months rent were taken subject to the other students approving the property. As the other students did not approve the property and no contracts were signed the money should be returned immediately.
I hope that this helps.
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Sabbri I am not sure that I
Sabbri
I am not sure that I agree entirely with Gerards answer. To assist me could I ask what you understood the purpose of the Holding deposit to be, and why the agents said they would take it.
Richard Paremain
Holding Deposit
Hi Richard,
The holding deposit was paid to secure the propery and stop marketing it. And when the Tenancy Agreement is signed, it becomes a security deposit.
Kind regards,
The Agency should have had
The Agency should have had their paperwork in order so that in the event of a situation such as this it is quite clear whether monies are retained or returned. I suspect that a county court judge would penalise the agency,who are after all the ones with the experience , for not having the paperwork in order. By this I mean the judge will lean in your favour if he can.
I struggle to find a benefit to the agent in taking a holding deposit at all, if it is not to be retained in the event that the tenancy does not proceed. If the agent simply returns why bother taking it. However if your understanding is different, and given the agent has all of the experience, I think it is incumbent upon him to make it clear that it is to be retained. By not doing so he leaves a court to make a judgement as to intention. I suspect that to bring a successful claim your argument does not have to be more convincing than the agents it simply has to be believable.
Richard Paremain
Holding Deposit
Thank you for your inputs. It's greatly appreciated.