Holding deposit with no paperwork and now prospective tenant is making a claim?

by Readers Question

9:35 AM, 29th October 2015
About 5 years ago

Holding deposit with no paperwork and now prospective tenant is making a claim?

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Holding deposit with no paperwork and now prospective tenant is making a claim?

I want to check whether my prospective tenant can claim back holding the deposit. In my case my future tenant agreed to pay me a deposit £200 to take the property off the market, but later on he asked me to create tenancy agreement without advance rent and 6 weeks deposit for which I didn’t agree. refund

The tenant was saying that he will pay advance rent on the day of key handover and was reluctant to give a deposit.

Now he has raised small claim against me for the holding deposit. There is nothing written between me and him as to whether holding deposit is refundable or not.

Please guide me about my options

Many thanks

Private Landlord

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Richard York

15:07 PM, 30th October 2015
About 5 years ago

Reply to the comment left by "Charles King - Barrister-At-Law" at "30/10/2015 - 11:58":

Appreciate the candour from Charles, and I didn't realise that is how it worked - I would add one point.

Whilst not banning holding deposits (which I think are reasonable), the OFT guidance is clear that the tenant should be given an opportunity to see the agreement prior to being asked to pay one:

"Tenants should be able to read the agreement before being asked to pay a holding deposit or becoming financially bound in any way"

Without being facetious, "reasonable time" implies the time to reach a contract arrangement on the tenancy agreement. If my understanding is correct, a reasonable time could be a year.

If the tenant were to propose amendments over an extended period which the landlord did not find acceptable then the situation is similar, the landlord could suffer a lengthy void, costing far more in a void just to retain a small holding contract.

That's clearly rediculous, so the point I'd like to make - if you want someone committed to a tenancy, get ink on paper asap.

Anna Ag

16:16 PM, 30th October 2015
About 5 years ago

Hi all,

It may be idiotic from my side but most likely i am going to reject this claim and ready to bear the cost as this matter of right and wrong. There should be a provision in law to secure landlord position otherwise any prospective tenant can come one day and say that he doesn't want to rent the property (obviously before signing tenancy agreement).

My question - if claimant decide to go for judgement, is it mandatory for me to attend hearing in person or i can providing all required details in writing and let the judge decide based on that. I can attend hearing at my location only but wouldn't like to travel anywhere else as it will be loss for me.

Mark Alexander

17:37 PM, 30th October 2015
About 5 years ago

Reply to the comment left by "Anna Ag" at "30/10/2015 - 16:16":

If you are defending you can ask the Courts to hear the case local to you.

Note the comments made by Charles, I know several clients who have used his services as a barrister via the direct public access scheme. His clients hold him in high regard.

Charles King - Barrister-At-Law

18:30 PM, 30th October 2015
About 5 years ago

Thank you Mark, and Anna - not idiotic at all! Stick to your guns. You can certainly make representations to the court on paper, but it is usually preferable to attend to make sure nothing goes wrong! You should win, but there are no guarantees in this area of the law under our legal system.

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