Holding Deposit not refunded by Landlord

I am a student looking to move to the UK. I spoke to the Landlord after looking at his advertisement on OpenRent and he asked me to pay a deposit of £500 as holding deposit to secure the house in London. I decided to pay the same and sent him my details. However, I did not sign and send him the initial agreement for the holding deposit. He asked me to send a reference letter from my friend which too wasn’t sent from my end. After that within 48 hours I asked the landlord to return the holding deposit since the agreement wasn’t signed and I couldn’t help him with any reference check. The landlord has refused to provide me with the money and has sent me the final agreement to be signed without any background check or my consent. The holding deposit was more than 2 weeks of rent since the landlord deemed me to be a ‘risky’ tenant. Since I was unaware of the laws, the landlord has taken advantage of the same. As a student the money does matter a lot to me and has put me through lot of stress. The money was directly paid to his bank account. What can I do now?

Normally the holding deposit can be retained by the landlord if the prospective tenant changes their mind as the advert is locked so nobody else can make enquiries. If you change your mind you have wasted the landlords time and they would be well within their rights to keep the holding deposit.

The other thing is, it is the law that the landlord can only charge a maximum of one weeks rent for the holding deposit. I believe that it is the case that Open Rents software would calculate the holding deposit amount based on the advertised rent and wouldn’t allow the prospective tenant to pay more. The deposit is paid to Open Rent who hold the deposit and then freeze the ad. I haven’t used OpenRent before so anyone can correct me if I am wrong. Sounds like you have gone outside of Open Rents platform and paid the deposit direct to the landlord. Now it’s going to be virtually impossible to get your money back.

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Hi Chris, appreciate your time to reply to my post. Just to add to Open Rent’s policies, they have mentioned you can directly pay the landlord too if he hasn’t registered for payment through Open Rent. I am assuming this would be normal practice and saw no malice and paid up the extra deposit without knowing the rules. Is there any way I can enforce the one week rent law and get the rest of my deposit rent refunded?

Yes it is common for landlords to just use OR to market their properties and nothing else. There are also a lot of other posts regarding the referencing of tenants from overseas which is a problem for landlords because those from overseas cannot be referenced in the usual way as those living in the UK. This landlord has come up with a unique way to mitigate the extra risk that he faces but it is illegal. He would be better off asking for 6/12 months rent upfront. You can try appealing to the LL better nature and inform them that the amount taken is illegal as it breaches the Tenants Fees Act 2019 (he may not be aware) Say that you are happy for them to keep the equivalent of one weeks rent and ask them to them to refund the additional amount. I think that is the best you can hope for. If the LL doesn’t comply you would have pursue it legally. You don’t really want to pursue this avenue Unless you are studying law.

Good luck!

The landlord has taken an illegal holding deposit as the limit is one week. Insist on a refund or you will report him to the Council.

I like the suggestion of David122 better. Reporting LL to the Council.

Did you ever view the property?

I think he probably didn’t view in person as he is abroad. It is common for those overseas to secure a property on the strength of a video or even a live video viewing.

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Yes you will be correct Pity that as a video does not give the whole picture, Shame that poential tenants do not google the laws on renting in U K first

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