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I've tried to not make this too long so please bear with me!
So, to cut a long story short, I had tenants in my property who due to personal reasons had to cut their tenancy short. The letting agency (who I shall not name) found new tenants to replace them. All good.
Prior to the new tenants moving in the agency had a verbal agreement with them that they would waive the Holding deposit which consisted of Tenancy and Admin fee (£180) and Referencing check (£60), totalling £240 on the basis that they signed the agreement and take on the tenancy.
The agency was to take the first month’s rent from the tenants (£1300) and deduct my fees from it. The total cost of my fees was nowhere near £1300 so you would think they would refund me the remaining balance, but that is not what they said they would do. They do not manage the property either, so I have no property management account/bills with them. There was a lot of back and forth and I had their word in writing. eventually I ended up getting in contact with the tenants directly and we both decided to forgo the agency altogether and deal directly with one another. This was before any money was exchanged.
Because the agency verbally agreed to waive the fee for the holding deposit, the tenants argued that they were promised this and that it should be honoured. As a gesture of goodwill, instead of taking a full deposit I deducted the £240 from it so they paid less deposit than they should have. Months later they are not happy with this situation and would rather pay the full deposit and have £240 knocked off their rent which would leave me out of pocket (I am assuming they are hoping to leave the flat in tip top shape when they leave thus retaining their full deposit – a win-win for them).
My argument is that this agreement was between them and the agency not myself and was verbal. They have no written proof of the waiver. The agency in emails also refuse to acknowledge the verbal agreement they had. I suggested the tenants take the agency to small claims court if they wished.
AIBU to think that they have no rights in asking for money they have not lost out on? Have I done the right thing by trying to meet them in the middle by lessening their deposit? Or am I in the wrong?
Thanks for reading this far if you have!
Short quick answer is that you should have deducted the £240 from the rent you received NOT the deposit.
'The agency was to take the first month’s rent from the tenants (£1300) and deduct my fees from it. The total cost of my fees was nowhere near £1300 so you would think they would refund me the remaining balance'
What did the Agent return to you? What was their fee? (you outlined 'deduct my fees from it' what do you mean by this?
Is the rent for your property £1300 PCM? was the deposit £1300 also, £2600 or was it £1300 total (£650 Bond + £650 Rent)?
Sorry it slightly contradicts having just re-read so you took the agent out of the equation, if this is the case the £240 should have been deducted as said from the Rent not the deposit.
I’m wondering why I should be out of pocket by an agreement I had no knowledge of or was part of (I only came to know about it after we cut ties with the agency).
My fees with the agency (administration, finder’s fee etc) were in the region of £500ish so I should have been given back £800ish by the agency as I had no other bill to settle with them. They refused.
The agency did not receive the first month’s rent of £1300 from the tenants as we had all cut ties by this point. I paid my £500ish fee directly to the agency's account after I got the first month's deposit directly from the tenants. This meant that they did not have the opportunity to take the full £1300.00 as they were intending.
The rent is £1,300 PCM. The deposit was for 1.5 month’s rent (£1950.00) but I knocked off the £240 they felt they’d missed out on, so they only paid £1710.00 deposit, grand total of £3010.00.
Now they are saying that they are not happy with this and would rather pay the full £1950.00 deposit and get money knocked off the rent.
What I don't understand is why you would have knocked off the £240 they'd missed out on? They missed out on paying this to the Agent, so buy going direct with you, they missed out on paying this anyway.
You shouldn't have been out of pocket and should never have offered this, but as you did deduct it, which was your choice to offer, then it should have been deducted from the rent not the deposit IMHO.
But as you did deduct from the Deposit you haven't actually lost out on anything currently. (subject to them returning the property back to you in the same condition as rented when they do leave)
Forgive me I see what I’ve written wrong. They DID pay £240 to the agency and walked away when we cut ties with them, hence why I took it off the deposit as a good will gesture.
I haven’t lost out on anything by deducting from the deposit (their money essentially) which is how I want to keep it. If they leave the house in good condition they will get this all back.
If it comes out of the rent I will be losing out.
I appreciate you don't want to loose out but I think they are right in thinking that that £240 should have come out of the rent NOT the deposit.
I can see where the tenants are coming from.
To truely reflect your gesture of knocking £240 from deposit, you need to have received £1710 but protected £1950 to reflect the £240 that you offered to give to them in lieu for the agents fees/promise.
Because you only protecting £1710, then the tenant has lost out on the £240 paid to the agent.
Your point is to offer to accept £1710 deposit instead of £1950 means you are only going to pay back the £1710 received. The value of £240 discount is nill to you. This is because it was footed by the tenant.
I am guessing that your offer of the £240 discount from deposit was to help the cash flow for the tenant.
Tenant is right here as they seem to have lost the £240