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beardiebloke

Paying A Deposit Before You See The Tenancy Agreement?

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I just had a letting agent tell me that to secure a property we need to pay a £250 deposit which is refundable if the LL pulls out.

I asked what happens if I don't like the terms of the tenancy agreement - do I lose the deposit? I haven't seen the document so in theory I might not like it. He simply said that it's never happened before and I shouldn't worry about it. In the end the house went so I didn't have to pursue the matter of seeing a draft agreement.

Could they really keep my deposit if I pull out on the grounds that I don't want to sign the their tenancy agreement which they have refused to show me? This seems terribly dodgy (and no, I'm not surprised).

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A deposit can only be non-refundable if paid in connection with a contract. It takes two to make a contract. That means you need to ask what both parties have agreed to do when a deposit is paid. If no obligations are imposed on the landlord there can be no contract and any deposit must be repaid.

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If the contract is between the agent and the potential tenant exactly what is the agent agreeing to do? If an agent makes money this way and does it without the landlord's consent he is making "secret profits". The agent could also be guilty of an offence under section 4 of the Fraud Act 2006, though I suspect it would be difficult to get anyone interested enough to prosecute.

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If you pay prior to reviewing it and there turns out to be unfair terms that the LA are unwilling to remove, then the LA will have to refund you the money. If they refuse threaten them with the small claims court - the judge will easily find in your favour as it will class as being under duress. However its much easier if they are sensible enough to show you a sample prior to putting down the holding deposit.

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I'd be surprised if (a) the average T&Cs were well enough drafted to cover it and (B) whatever is agreed between agent and prospective tenant is sufficient to constitute a contract.

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I'd be surprised if (a) the average T&Cs were well enough drafted to cover it and (B) whatever is agreed between agent and prospective tenant is sufficient to constitute a contract.

What contract are you asking about?

There's certainly enough to form some sort of contract

tim

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What contract are you asking about?

There's certainly enough to form some sort of contract

tim

What usually happens is that a landlord or agent takes what is referred to as a "holding deposit". In my experience the arrangement is usually a bit vague. The first point is that it takes two to make a contract and both parties must have undertaken obligations. However, even if the landlord "holds the property" (whatever that may mean) for there to be a contract there needs to be certainty as to terms. Exactly what is it that is being "held"? How long is it to be "held" for? On what terms is it "held"? What does "held" mean? The first question is an important one; what is being "held" is the grant of a tenancy. The parties need to know the terms of the tenancy and that means more than the length of term and rent payable.

What it comes down to is that landlords/agents want to have their cake and eat it. They want to pin prospective tenants down without committing themselves to granting a tenancy. That is very difficult to do.

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What it comes down to is that landlords/agents want to have their cake and eat it. They want to pin prospective tenants down without committing themselves to granting a tenancy. That is very difficult to do.

It's known by some as headology. You convince the tenant he has no real choice, and he won't try to exercise real choice.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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