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Holding Deposit


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#1 thejaksie

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Posted 03 April 2012 - 01:52 PM

hi

I have sold to rent (or in process to) and have found a place we would like to rent in London and would like to start negotiating contract.

However, before the EA will show us a draft contract he wants a "holding deposit" of 2 weeks rent. He won't take the flat of the market, won't show us draft contracts, won't do anything before we pay him this amount. The amount would be transferred without contract and it is extremely vague under what conditions we would get this back, if ever.

We are pushing to at least see the contract before we pay anything but the EA is basically telling us we're being difficult and that he will push the flat with others. I am now at the point of walking away as this sounds like extremely dodgy business practice.

Wondering (1) is this normal, and (2) is this even legal???

#2 zebbedee

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Posted 03 April 2012 - 02:03 PM

hi

I have sold to rent (or in process to) and have found a place we would like to rent in London and would like to start negotiating contract.

However, before the EA will show us a draft contract he wants a "holding deposit" of 2 weeks rent. He won't take the flat of the market, won't show us draft contracts, won't do anything before we pay him this amount. The amount would be transferred without contract and it is extremely vague under what conditions we would get this back, if ever.

We are pushing to at least see the contract before we pay anything but the EA is basically telling us we're being difficult and that he will push the flat with others. I am now at the point of walking away as this sounds like extremely dodgy business practice.

Wondering (1) is this normal, and (2) is this even legal???

I've heard of this being done, legal enough IMHO, however if the rental falls through through no fault of yours they have to return the deposit, I'd go so far as to say that as you were not permitted to see the contract prior to giving up this deposit that issue you may have with the contract would be no fault of yours. Indeed even failing the credit checks would be no fault... as it is subjective based on the LL opinion as to whether or not they are to his satisfaction.

The LA are know for taking the deposit off a number of peeps and not bothering to return them but will more than likely capitulate in the face of a court summons.

Edit. Although personally I'd tell them to f off with the 2 weeks rent size deposit.
As for the getting it back if they decide not to rent to you, no deposit can have been made for something that was not available to you.

Edit again. Maybe even if you pull out the OFT would rule it an unfair penalty as it would be disproportionate to the agents costs.

Edited by zebbedee, 03 April 2012 - 02:06 PM.

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#3 rw42

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Posted 03 April 2012 - 04:17 PM

Run a mile.

#4 gadget

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Posted 03 April 2012 - 06:44 PM

Pretty standard in my experience. And legal. However if they attempt to keep hold of it in most circumstances they'll be breaking the law. Probably won't stop them trying to mind.....

#5 porca misèria

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Posted 03 April 2012 - 10:32 PM

Isn't taking it up thejaksie all part of the London experience?

#6 Scary

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Posted 04 April 2012 - 07:45 AM

However if they attempt to keep hold of it in most circumstances they'll be breaking the law. Probably won't stop them trying to mind.....


Yeah, and good luck getting it back...

#7 Bruce Banner

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Posted 04 April 2012 - 08:53 AM

How on Earth can you be expected to commit to something before you've seen the terms of the contract? Sounds to me like desperation from a company about to go tits up.
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#8 thejaksie

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Posted 21 April 2012 - 03:33 PM

as an update FYI the EA had some tricks up his sleeve in terms of costs and requirements . We have since been told that the "landlord" did not want to continue with us as we were "difficult" (despite that our issues only had anything to do with the EA's fees and stupid requirements and nothing with the tenancy agreement or flat).

Luckily they did refund the deposit.

Found a nicer, bigger flat, in better location since then > at the same price.

With this behaviour this EA will be out of business in a matter of time only I suspect




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