Illegal Holding Deposit

[Kay15]

I recently enquired about a property advertised on Openrent which was originally advertised at £800pcm and the landlord responded saying that he didn’t have any up-to-date photos and he wasn’t able to arrange a viewing yet as the tenants were still there until 21st August. He asked us for a holding deposit of £400 to enable him to pause the listing and arrange for us to view the property. He then increased the rent to be £820pcm.

He stated in an email to me,

“Let me bring you up to speed. I am getting inundated with enquiries (some from unsuitable candidates) & viewing requests. I never let anybody view without knowing something about them first.
I would be willing to offer you first shout at taking this house & pause my advert with Open Rent with some provisions. Would you be happy with that, or do you want to get an internal viewing of the house first?”

then

“In the meantime, are you OK to pay a holding fee of £400 for the property. This is to keep the house for you until you move in or, in this case, view the property. This money becomes part of your deposit/first month’s rent when you sign the tenancy agreement. I have already paused my advert as of yesterday.”

I paid this deposit as requested, on the understanding that this was to hold it until we either moved in OR viewed the property, as stated. On viewing the property, it was not in a good state of repair and we also had been re-offered another property that we had previously accepted but the tenant was unable to move out.

I declined the property (we hadn’t signed any paperwork) and asked the landlord to return the difference between the week’s rent he is entitled to (I had since discovered) and the £400 we had paid, as I accept that he is able to hold onto that one week’s deposit.

He responded quite aggressively, accusing us of reneging on the tenancy and quoting Openrent in saying that he was entitled to keep the deposit. However, as you know, the amount he asked us for is now classed as a ‘prohibited payment’

He said,

“I always want my tenants to be happy so of course if you want to renege on your agreement with you that is up to you. I do feel that my good will has been abused though & I must point out Open Rent’s policy on Holding Deposits (point 3 in their guidelines I think) : i.e., they are not returnable unless the landlord opts not to take you as tenants.”

I have responded, pointing out that I am happy for him to keep 1 week’s deposit (£190) but would appreciate the difference in return and have heard nothing back. I have sent a similar post to this to Openrent, with details of the property and landlord included so they can see which ad it was.

Any advice anyone can offer would be appreciated.

[Daz]

Hi @Kay15 -

If you used Rent Now, then you should see the option to claim your holding deposit and our team will review any dispute to ensure everything is both legal and fair.

Alternatively, if you sent money to the landlord “off-platform” then I’m afraid we don’t control the money, and if you are in dispute over this payment you would need to resolve this with them directly. We don’t ever recommend sending money directly to other users on the platform - Rent Now is designed to protect both parties from situations such as this. As we can’t see how much money was paid, when, and under what terms, it’s impossible for us to intervene here. However, you are protected by the tenant fees act and can make a claim via tribunal here:

Form TFA1: Application for recovery of all or part of a prohibited payment or...

We have a help centre article about paying holding deposits directly to landlords here (for anyone else reading):

A landlord has asked me to pay a holding deposit to them directly

I hope this gets resolved amicably and without too much pain, and if you did operate off-platform then in future wouldn’t recommend sending any money to a landlord directly without fully understanding the risks involved.

[Colin3]

paying anything before you see it is a great risk ,that you take.

[David122]

You are entitled to the full £400 back, not just the difference between that and a weeks rent. The landlord took an illegal holding deposit and he didn’t let you know the conditions under which any of it could be retained. In fact his reply to you suggests that it would only be held until the viewing. He should also not have charged you the holding deposit before the viewing. I suggest you demand the whole deposit back and sue him if he doesn’t pay it. Use Openrent to help you make the demand.

[Kay15]

Many thanks David - Openrent are contacting him on my behalf and I’ve also got the option of the form above too. I know it was a risk but I’d researched the house, seen the outside in person and found old inside photos and we were confident it was what we wanted - but on viewing, it was clear there were water ingress issues, from the old chimney and under the bath and the landlord, contrary to his own rental agreement, said that if we wanted the place cleaned, or the carpets replaced (they were in a state) then we would have to do it ourselves. I didn’t have any confidence then that he was going to fix the other issues if he wouldn’t have the place even cleaned after the old tenants had left!

[Tim_Ira]

This is a slum LL and should be reported to OpenRent. He tries to rent substandard property and illegally takes and then withholds deposit.