Does estate agent owe me half of the holding deposit?

Does estate agent owe me half of the holding deposit?

9:08 AM, 13th September 2021, About A week ago 13

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An estate agent has refused to pay me half of the holding deposit of tenants who withdrew on the point of signing. Does he have the right to hold onto their full holding deposit? When this has happened before, other estate agents have always split it in half with me. Is it solely within the discretion of the agent whether he splits it?

If he does owe me half, who do I complain to? Is it trading standards or the property ombudsman (he has their logo on his website)?

The reason why the tenants withdrew was that I used the NRLA AST (stamped all over with their logo) and followed NRLA advice to include a copy of my headlease so tenants could have full knowledge of that. The agent panicked, and in front of the tenants whose pens were poised to sign, rang me and said “I’ve never seen an AST like this. You’ve included the headlease! I don’t know where to put the date!”

Despite having yellowflashed it everywhere the prospective tenants understandably panicked and upped and left the office. Later the agent agreed there was nothing wrong with my AST.

Jean



Comments

by Ian Narbeth

9:34 AM, 13th September 2021, About A week ago

Hi Jean
It sounds as if you have an incompetent agent. Unless his contract with you allows it he should pay the full holding deposit to you, especially as his ignorance led to the tenants' pulling out. You also need to be careful that the tenants don't try to reclaim it under the Tenant Fees Act. All they need to do is mount a half plausible argument about being misled as to the terms of the tenancy and you face a world of trouble. Hours of work to defend the decision to forfeit the deposit if you win. Hours of work and a fine of up to £5000 if you lose and should have refunded it!
I think you should sack the agent and tell them that if (a) they don't understand ASTs and (b) think that they deserve any part of the holding deposit after their display of incompetence they are in the wrong business.
Do you really want to enter/stay in a long term business relationship with such people?

by Property Gal

9:47 AM, 13th September 2021, About A week ago

I agree with your comments about the agent!! Clearly, the Fawlty Towers of estate agents and I will never touch them again. My contract with the agents does not mention the holding deposit so perhaps I don't have a leg to stand on? Unless there are rules somewhere that apply generally even if not referred to directly in a specific contract??? I have not seen the tenants' holding deposit terms with the agent. This happened a couple of months ago and the withdrawn tenants have not pursued their holding deposit with me.

by DSR

9:57 AM, 13th September 2021, About A week ago

....and possibly contact the Property Ombudsman to tell them this issue for them to investigate the Agent who clearly is incompetent!

by Ian Narbeth

10:12 AM, 13th September 2021, About A week ago

Reply to the comment left by Property Gal at 13/09/2021 - 09:47"My contract with the agents does not mention the holding deposit "
In which case there is a strong argument that the deposit is yours. They received the money as your agents. They have not performed the service of securing the tenancy entitling them to a fee and indeed their incompetence has cost you money. Write to them demanding full payment within 7 days. If you have the time you could issue a small money claim through MCOL https://www.moneyclaim.gov.uk/web/mcol/welcome

by Property Gal

10:21 AM, 13th September 2021, About A week ago

thanks!

by Tanya Demetriou

11:50 AM, 13th September 2021, About A week ago

Hi, I got contract with L.V estate agency. I lost confidence so I drive 5 hours to make sure flat is clean. Tenant left and left absolutely filthy flat last day 31 ofAugast , even so estate agent confirm cleaner left keys in the office I picked up on fist of September.When I send photos it was not clear they give me excuses they didn’t have time to clean because I collect keys to early. My curtains in replaced I asked for my original curtains they said they haven’t noticed, shelves is on the floor instead on wall. as it was COVID-19 I told them I got tenant ready to move in .
That’s their answer.:
The flat was not in a perfect condition, however please refer too clause 6.2.6, as the tenant opted into our 3rd Party deposit alternative scheme no deposit was taken. As per the clause the deposit alternative can only be used should LV be chosen to re-let the property. As we have not been instructed to re-let the property you have voided the agreement.
Is right they don’t take any responsibility for cleaning and missing items in flat.

by Ian Narbeth

14:50 PM, 13th September 2021, About A week ago

Reply to the comment left by Tanya Demetriou at 13/09/2021 - 11:50
Tanya, what has this got to do with Jean's question?

by Property Gal

15:08 PM, 13th September 2021, About A week ago

I cqnnot see the relevance myself!

by Suresh Parikh

15:36 PM, 18th September 2021, About 3 days ago

Hi
Your problem arose because you attached the Head Lease, thereby making your AST cumbersome.
As a retired Lawyer, I have a clause in my AST that the Tenant shall abide by the Covenants contained in the Superior Lease - viz., ......
I then specify the ones I want my Tenant to be bound by.
Hope this helps.

by Suresh Parikh

15:48 PM, 18th September 2021, About 3 days ago

As for the holding deposit:
The Agent in law is your Agent. Under the law of Agency, the Agent must carry out any lawful instruction given by the Principal (you).
When you want to keep the holding deposit, it depends on the terms of your agreement.
If the Agreement is silent, then I would imagine it depends on the situation.
If the Agent has charged you a setting up fee, then the deposit should belong to you to compensate for the void period.
If he has not charged you anything, but has incurred costs, then to that extent he is entitled.
If it is difficult to quantify, then equity is equality, and you split 50%.

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