Holding deposit on rented house - someone has bid higher

[crazymumofthree]

Just wondered if this is right...

We went to view a rental house last week and really liked it, we put in an offer on the Friday and landlord accepted it, Saturday we went and viewed again and and said we defiantly wanted it and paid estate agent a £500 holding fee Saturday evening.

Obv Sunday was closed, this morning estate agent emailed over referencing documents. She then rang an hour later saying someone else had offered £100 more and would we increase by £50 to make landlord accept us!

I said no it was too much perhaps £25 more (stupid I know!!) she said she will put it to landlord and get back to me.

She hasn't spoken all day, after speaking to other half we've decided we would rather pull out, we haven't got time to wait for landlord to make a decision and feel a little done over, after all £500 holiday deposit is to reserve it for us and it was for a done deal. Phoned estate agent who is now saying we can't have the holding deposit back until landlord makes his decision and only if he decides not to go with us.

Is this legal? The £500 was paid in the pretense that reserved the property for us and they have now breached that (apparently other offer hasn't viewed so it's okay?!?)

Other properties we have viewed also said the deposit was refundable if checks were to come back rejected etc so it should never be taken anyway.

Not to mention the estate agent also wants £400 for referencing on top for a Homelet check which we know is only £100 I total! Are they being CF? I stupidly bank transferred the holding fee! Have I got a leg to stand on?!?

Legally, letting agents can’t take money from you to “reserve” a property. £400 for referencing is a ridiculous amount. It will cost the company £5 at least.

Yes you have lots of legs to stand on, they have to refund the holding deposit even if they like to give you the impression not. It doesn't matter who changes their mind, they can only keep reasonable fees for work actually done.
Otherwise they can take massive deposits and then give over tenancy agreements with terms you won't want agree to, then keep the deposit when you refuse. That would be totally bizarre. Well so far for a start they've accepted your deposit and then changed their minds about the rent, so by that logic they should be paying you a deposit and forfeiting it!!

They've accepted your holding deposit then allowed someone else to 'gazump' you on the rent. They haven't kept their side of the deal so even if the LL decides you are their preferred tenant, but you pull out you should get your money back. You're not telling me that if you pull out they won't go with the other people instead, that's nonsense. I'd go to their office and make it very uncomfortable for them until I got my money back. You didn't pay them a sweetener no matter the outcome, it was to get the property.

Bit of an update - company still refusing to give money over! They are saying landlord accepted the £25 more and because I said this on the phone it's agreed. We have had no paperwork of anything confirming the deposit or what for and terms and conditions etc!

We sent a letter as advised by ombudsman and she rang DH offering £200 off the rent if we accept the higher offer, he said no, we just don't want to go through them as an agent. I've had the main boss ringing me shouting down the phone, not letting me get a word in edgeways and demeaning me saying we won't find anywhere because we have a dog etc etc! (It's not a small amount of rent we are talking just shy of £2000 a month here! ) she then turned around and said she has 15 days to reply which we assume she will just leave it until then to return the money.

Does anyone else have experience of this? What was the outcome

To clarify, you don't want to rent the property any more, even at the original rent?

Have you signed anything?

The original amount we agreed to was £1900, all verbally, nothing signed and deposit was paid on this assumption. They then rang the day after saying someone had offered £2000, could we up to £1950, I said no possibly £1925 need to confirm with partner, she said she will put that forward to landlord, I spoke to partner we thought t through and agreed it was a bit cheeky considering we had paid deposit to hold it and that no we actually were willing with that and either £1900 or nothing. They are now withholding on the basis of us pulling out because they want £1925. We loved the house, if it came on with a different agent we would go ahead but because of how agent has acted and conducted themselves no longer want to proceed as we will be paying another £400 in fees and giving them personal stuff such as bank statements and alarm bells are ringing due to how they have acted and trust is lost.

Sorry to hear this is escalating, despite the fact that you are in the right, they are so unprofessional they are trying to get business through bullying.

Just in case you needed further confirmation that there's no such thing as a non returnable deposit, especially if they are the ones messing around, even if you had signed terms and conditions they still need to supply proof they have provided services that cost money as a result of your booking, and that it was reasonable and the cancellation was down to you. None of which would be true as far as I can tell.
See:
www.gov.uk/guidance/unfair-terms-explained-for-businesses-full-guide#deposits-advance-payment-and-cancellation-charges

In all honesty it sounds like shady agents and you can do something like say they have until to refund your deposit otherwise you will start a claim and they will be responsible for all expenses in addition to the original amount. That might clarify their mind.

Good luck.

You can also find out if they are a member of any "professional" bodies, and report to them. They are probably not going to be helpful against a member that's paying them membership fees, but at least they will be aware their reputation is being tarnished by association.

Are they registered with the property ombudsman?

Here is the guidance on holding deposits:

Where a prospective tenant is asked to pay a holding deposit, the agent must provide that person with a written receipt detailing the charges and fees that will be offset against the deposit (if any) and the terms of repayment or forfeiture should the tenancy not proceed. The agent should also explain the purpose of the payment (for example, removing the property from the market while references are being undertaken). Any deductions from the deposit must be reasonable and must take account of the specific circumstances of the situation and the services actually properly provided.

It doesn't sound like they've provided you with any documentation or any services that would be reasonable to charge for so if they do not refund you in its entirely then I think you have cause to complain via the ombudsman or small claims court if necessary.

I am not sure if my DH has already put in a complaint, it was the ombudsman he rang who advised the letter.

Before sending the deposit I researched the company as it's not a chain agent and isn't local to us it's in London about an hour away. There were the logos for all the regulators on their website and I also found reviews on another side however after going back to visit the site I have realised the people reviewing happen to have the same surname as the boss that I spoke to 🤔🙄

Thinking we've been horribly done over..

You haven't been done over as you know who has your deposit and the law is clearly on your side. Unfortunately the hard part is convincing them if that. Stay calm and deal with it one step at a time.