Holding deposit returned on failed reference

Landlord Discussion
1

Hi, this is the first time of using open rent,I had always used a reliable letting agent. But trying to reduce costs etc.

My question is that I have had three separate references for tenants at £30 each and one guarantor also at £30. All of which have not passed. Do you normally give back all their deposits money or do you let the prospect tenants that you will request the £30 if they fail the credit reference report?

Many thanks Sherman

2

Give it back

It would be illegal to charge for the cost of referencing (whatever the outcome) under the Tenancy Fees Act 2019.

Nor can you keep the holding deposit (or part of it) because they fail referencing- unless they were misleading or lied to you previously (perhaps if they told you an income which was totally false)

Suggest you consider doing some LL training

Good luck

1 Like
3

In addition to above, you may also keep deposit if the right to rent check fails, or if the tenant withdraws from application.

2 Likes
4

To have so many fail, raises the question of whether you did any pre-checks. If these are done, then they are less likely to fail, and if they do, are more likely to have misled you, as you would have asked the right questions.

Had you asked screening questions, have you asked for 6month of bank statements to assess affordability? etc..etc..

3 Likes
5

Its illegal to take more than one holding deposit and you can’t charge the tenant for references.

Getting rid of a managing agent is not a saving if as a consequence you get civil penalties because you don’t understand the law. I echo the suggestion of some urgent training.

1 Like
6

Sherman,

Dis you tell them the minimum income in order th afford the rent? If the confirmed jointly the could afford the rent then you can adk openrent to withhold the deposit to keep it as the misled you.

It is also help to state in your rental ad the minimum income required for the rental. This is normally 30 times monthly rent.

It would have been helpful to give more information on mt the had all failed referencing.

Note. OpenRent will hold the deposit for a month before giving it to you. I got the holding deposit.

Best of luck.

Scott40

1 Like