Myself and 3 friends paid a holding deposit for the rental of a flat after we spoke to the agent, made our offer and the agent responded saying that the offer was accepted and could we pay the holding deposit. After paying the holding deposit on (Edit: Saturday not Friday), we recieved an email today (Monday) from the Agent saying that they had recieved a better offer from another candidate and they had paid the holding deposit before us and now they want to refund the deposit. Is this allowed? I was under the impression that by paying the holding deposit, we are “reserving” the property.
Can we ask for proof that the other candidate paid before us as I find it unlikely that this occured? Surely the Agent would have told us before we paid that they had just recieved a better offer?
On OpenRents FAQs (https://blog.openrent.co.uk/difference-holding-deposits-security-deposits-agency-fees/), it states that "One you have paid the holding deposit, the tenancy is taken to be agreed subject to referencing. The landlord should not proceed with other tenants, and must not accept any other holding deposits. " Thus the agent recieving 2 holding deposits is wrong?
Thanks for your post and we’re really sorry to hear that this particular tenancy has fallen through.
The terms that you have quoted come from OpenRent’s terms of use and apply to tenancies that are set up using our Rent Now tenancy creation service. It appears that you paid the holding deposit directly to the landlord rather than through Rent Now so the exact terms in your case may differ. The landlord’s representative should have provided a copy of their terms when you offered your holding deposit.
If you believe that the landlord has breached this requirement, or any other requirement, of the TFA then you should report this matter to your local Trading Standards office. You can contact your local authority here: https://www.gov.uk/find-local-trading-standards-office.
Regardless of whether there has been a breach of the TFA, if the landlord’s representative has now rejected your application you should ask for the holding deposit to be returned or for the representative to clearly outline, in writing, what grounds of the TFA they are using to withhold the holding deposit. Further guidance on requesting this can be found using the link above.
If you’d like any further guidance on your personal situation please feel free to email our customer support team at https://www.openrent.co.uk/faq#i-have-more-questions. While our team is not legally trained they will be happy to answer any questions they can and to provide links to other organisations where appropriate.
We wish you, and your friends, all the best in finding a new property and we would always recommend that tenants use our Rent Now service to place a holding deposit. Rent Now prevents landlords from accepting a second holding deposit. The holding deposit will also be protected in our client funds account giving tenants peace of mind. The service is entirely free to tenants and further information can be found here: https://www.openrent.co.uk/rent-now.