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propertylawyer, Solicitor
Category: Law
Satisfied Customers: 288
Experience:  Property Solicitor with expertise in commercial and residential property transactions.
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I recently paid a letting agent a Holding Deposit of £3,250

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Good morning,
I recently paid a letting agent a Holding Deposit of £3,250 to secure a property in Wimbledon. The property was to have been occupied by my god daughter and 4 others. The property had 4 double bedrooms and was built over 3 floors. I was told by the agent that the property was licenced as an HMO by the local authority for up to 7 people and that the landlord had no objection to house being occupied by sharers. The intention was that the property would have been leased in my name and sub let to my god daughter and 4 others.
During the referencing period I requested amongst other things 1, A copy of the draft lease 2, A copy of the properties HMO licence.
The draft lease that was sent to be for signature was incorrect in a number of areas - wrong tenant name - wrong security deposit amount and more importantly expressly restricted occupation to members of the tenants immediate family and also prohibited multiple occupation. These matters were pointed out to the letting agent and I was told they would be rectified before "check in".
The HMO licence I asked to be provided with before "check in" never appeared and I have now been told by the local authority that no licence is presently in force. Although an application has been submitted.
On the morning arranged for check I received a text from the agent asking me to transfer further funds, one months rent £3,250, referencing fees £360. A revised lease was never sent to me for signature by the agent, no HMO licence was provided and no invoices for the additional monies being asked for.
I replied to the text advising the agent I no longer wished to proceed. I have since written requesting the return of my "Holding Deposit" setting out my reasons for withdrawing [above] and they have responded saying that my deposit will not be returned [because I withdrew for personal reasons] in accordance with the terms of their "Holding Deposit Receipt" which had been signed before sending the money.
I'm fairly confident of my position but need guidance on the quickest way to proceed having tried and failed to deal with the matter amicably.
Interested to hear your thoughts,
Peter Rennie.


Do you have a copy of what you signed stating the terms of the holding deposit?

Customer: replied 1 year ago.
It reads "As payment to Lawson and Daughters for work done or to be done in connection with the above named renting this property. On the signing of the Tenancy Agreement this sum will be allocated to form part of a dilapidations deposit for the property. This sum is fully refundable if Lawson and Daughters cannot proceed with the application by the persons named above to rent the above property.The sum may also be transferred to another property with the approval of Lawson and Daughters. If the above named withdraws from proceeding with the renting of the above property [or another property through Lawson and Daughters] or supplies unsatisfactory references, this holding deposit is not refundable"Peter Rennie.

So, technically, you did not withdraw. The agent has not provided the documents in order to complete, is that correct?

Who is the agent?

Customer: replied 1 year ago.
that is correct - no HMO licence was provided and the terms of the draft lease were unacceptable. The agents are a small firm based in Fulham [London].

Then your case is that the agent failed to provide the correct tenancy agreement and if it had done so you would have proceeded with the letting. As such, you have not withdrawn. It is the fact that lawman and daughters could not proceed by not providing a suitable tenancy agreement.

Hopefully you have all this recorded in email correspondence.

Must suggestion is that you formally write to the agent, send by normal and recorded delivery.

In the letter set out the facts, with particular emphasis on (1) the terms of the holding deposit and (2) the agency 's failure to produce a suitable tenancy agree (3) therefore the agency/landlord has been unable to proceed with the letting and as such you demand the return of the deposit within 14 days from the date of the letter (4) failure to return the deposit within the specified period will result in the matter being referred to the small claims court and not only claim the deposit but also court fees and 8 % interest.

You use to recover the funds. You have to send a letter before action first. If you get no response or no refund then put the claim in.

No guarantees of success can be given, each case turns on its facts and it will be down to how the court interpret the terms of the holding deposit and conduct of the parties.

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