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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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I recently paid a deposit of £10,000 for a property investment

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I recently paid a deposit of £10,000 for a property investment training course (which covers 2 people), and I now wish to cancel as my friend has backed out and cannot pay her share. The company now want to retain 5% of that money, which is £500. I am happy to pay something to cover the company's administration costs, but I find £500 to be an unreasonable amount, and I am asking them to reduce this substantially. I did read the contract, however I find it rather vague. It states:

“Banking and administrative charges MAY be levied against payments but WILL NOT EXCEED 5% of any separate transaction covered.”

It does not state that charges WILL be taken and that they WILL amount to exactly 5%. I did not believe that they would exercise their right to take the full 5% on such a large deposit, especially considering that I could have paid a much smaller deposit. Surely it is customary for companies to charge a flat rate as an administration charge, which would be much more fair, and clear. I did sign the form/contract however. Where do I stand?
Submitted: 3 years ago.
Category: Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Hello, welcome to the website. My name isXXXXX can assist you with this.

tdlawyer :

You're right to highlight the "WILL NOT EXCEED" element, which as you say, caps the liability, but does not state what it is. In the absence of a specific figure, the law will say that it is a reasonable amount only.

tdlawyer :

Of course, it might be, that a reasonable amount is actually 5%.

Customer:

Hi Tony

tdlawyer :

Hello!

tdlawyer :

What you might want to do is consider asking them to justify the figures, and say that you consider their entitlement to be a mx of 5%, but otherwise a "reasonable" sum.

Customer:

should I quote what you say in my letter, and say that i have sought legal advice?

Customer:

£500 does seem outrageous for the little admin costs involved

tdlawyer :

The best thing to do is just say what you consider the legal position is, they will know that you've sought advice, but if they think you can afford to speak to solicitors (which are notoriously expensive!) they might think you can afford the £500 and that they should pursue you for it.

Customer:

Lol! yes good point! altho I could say I have spoken to my father who is a solicitor - I just didn't want him to know about this so I haven't asked him

tdlawyer :

Ah, well you could do that!

Customer:

I guess I am appealing to their sense of good will, so I will approach it as you suggest

tdlawyer :

That's even better - your father is a solicitor that will help you address this issue for your sake, and the common good! :)

tdlawyer :

In other words, if it turns out they can't legally charge 5%, that affects them in all other contracts too!

Customer:

how will I know if they can't legally charge 5%? You mean because they can't justify the figures?

tdlawyer :

The Court will decide it! It's the only way for a definitive answer. But yes, the staring point is can they justify their charges.

Customer:

but this isn't likely to go to court is it? I mean for £500 it isn't worth it (although it seems a lot to me right now!)

tdlawyer :

:) No, I wouldn't have thought it would, but you never do know! Even if it did, it'll take about 5-6 months to get there!

Customer:

Thank you very much for the advice Tony

tdlawyer :

You're more than welcome. Have a great, relaxing, Sunday!

Customer:

Thank you, XXXXX XXXXX :)

tdlawyer :

Bye!

tdlawyer :

Is there anything else I can assist with?

tdlawyer :

Please remember to rate the answer for me.

Customer:

Thank you Tony, I am just composing my letter to them, I can't think of anything else

Customer:

I will rate your answer, thank you, XXXXX XXXXX very helpful

tdlawyer :

Okay, good luck! I am off out, if you need me later, just let me know! Thanks!

Customer:

Great, thank you!

tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience: 11 years experience of general practice.
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