Hello, I need help regarding a holding deposit dispute. I paid a holding deposit to take a property off the market during the referencing process. I did not pass the reference check, so I withdrew my application. The landlord is now refusing to refund the holding deposit, even though the tenancy did not go ahead.
Did you lie, mislead or fail to disclose anything they asked? (Eg, if they asked if you had CCJ’s, and you do, but said No, or if you told them an income level higher than would have been confirmed via the referencing process).
If so, they can keep the deposit. Otherwise, it should be refunded.
Oooh, hang on a minute… you said you ‘withdrew your application’. If so, you loose the holding deposit.
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You should not have withdrawn your application. You should have waited to see the landlords reaction. You reacted too soon
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Hello,
I understand that normally a holding deposit can be retained if an applicant withdraws. However, the holding deposit was paid privately outside of OpenRent, and no formal Holding Deposit Agreement was provided to me as required under the Tenant Fees Act 2019.
Because there was no written agreement setting out the terms, and no clear conditions explaining that I would lose the holding deposit.
Also when I fail in my reference I ask me to agree to pay 1 month deposit + 1rent and 2 month in advance
It sounds like you already have done your research, so you can complain to trading standards / Citizens Advice. The threat of doing so, might convince the Landlord to refund.
@Admir a contract is a contract whether written or verbal. Holding deposits don’t have to be provided via OR so that is totally irrelevant
You may have a hard time proving you weren’t told that if you failed referencing you wouldn’t get the holding deposit back and that this wasn’t explained to you - unless you have a witness or other evidence such as an agreed written record of what was agreed. But you can try taking to the residential property tribunal which decides on cases like these. The agreed facts are that you withdrew. Whether LL did not obtain holding deposit correctly and if that affects their ability to retain when you withdraw is for the courts
Offering rent in advance in response to a failed reference is totally irrelevant and under RRA will be illegal for LL to accept and not a reason why a holding deposit should be returned. Not yet clear whether such payments in advance will need to be returned I ‘think’. It also indicates you were willing to entice the LL into activity that will soon be illegal so not in your favour
Good luck
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Hi @David240 I want to clarify that my girlfriend is a witness to our verbal agreement regarding the holding deposit. I do not see any reason for the landlord to keep my deposit after I failed the reference.
When the landlord asked if I still wanted the property, the required payments were: one month’s rent, one deposit, and two months’ rent in advance. This was a significant amount that I could not afford, so I decided to withdraw from the process.
Given these circumstances, I believe the holding deposit should be refunded.
Try Karl 11 advice then, as above
Do you mean after you failed referencing he asked you did you still want the property?
After he ask for that big amount of money me and my girlfriend we ask time to think about and we decide to not move forward
so he asked that AFTER you failed referencing?
After failing in my reference
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What you ‘believe’ is based on your perspective not the contract or the law tho, isn’t it?
You need to look at the reasons why LL can withhold holding deposit and consider if these apply.
Google ‘When can a landlord claim a holding deposit? Openrent’
And consider
You have withdrawn from your original application.
You can
“ challenge a claim using this ground if they can demonstrate that the landlord has acted in such a way that it would be unreasonable to expect the tenant to enter into a tenancy agreement with the landlord.”
You don’t say if you tried negotiating following LL’s attempt to still go ahead or, or eg offering a guarantor. Or just decided to withdraw.
A court will decide based on whether you (and LL) acted reasonably or not. LL has lost money dealing with you and having their property off the market for more than a week and on referencing, and will need to spend more time on viewings and referencing again. They will have lost more than a weeks holding deposit. If you made no attempt to go ahead with the tenancy following the failed referencing despite LL attempt to offer you something that would address that from his pov, then I’m not sure whether court will consider you have behaved reasonably or not
Good luck
In theory, you seem to have a case for having the holding deposit returned, but its not a strong case and success will depend on the quality of your evidence. Your girlfriend is not an independent witness and consequently her evidence may be challenged. Look for texts and emails as well as bank statements and other paperwork. Get some initial legal advice and think about sending a letter before action to the landlord.
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