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  • Legal FAQs

    Non Payment of Holding Deposit Enforcement

    Finally I’ve had a chance to see things from the tenants side!  As a landlord I’ve always thought that tenants have a lot of cards to play, but my view has changed recently!

    To cut a long story short, my son is attending Essex university and is trying to rent a flat with another boy in Colchester.

    They found a place and paid a holding deposit to the agent back in mid June. Moving in date was supposed to early August.

    However the AST was only produced and sent out on the 23rd August, despite constant chasing, and all parties signed by the 28th August electronically.

    A electronic completion certificate was received.  Funds were transferred and a valid contract was formed.

    The agent then later unilaterally decided to withdraw from the contract for reasons only known to themselves thereby creating a breach of contract and is also refusing to return the holding deposit.

    This of course leaves the boys in a very difficult situation of having to find accommodation in a short timescale in Colchester.

    My understanding is that “a breach of the requirement to repay the holding deposit is a civil offence and will be subject to a financial penalty of up to £5,000”.

    My question is who is supposed to enforce this offence?

    I tried to contact Trading standards in Colchester, via citizens advice line, but they don’t seem interested. I’ve filed a complaint with the Property Ombudsman but it is a slow process requiring me to first go through the complaints process of a cowboy letting agent who won’t respond!

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    well if you have followed the complaints pprocess and waited for response within X days (does their process state X?), then I would ensure delivery via ordinary mail two sends, tracked mail, and email (perhaps using yesware to know if it was opened). At that point, apart from going to the shop which would be best if you can (and ask to record the conversation on phone or in person, then record it), you have truly exhausted their complaints procedure and should be able to go to TS and PO. Reneging on a signed contract might have a legal perspective re damages (or specific performance)? - I am just a private landlord with an in house lettings office, but I am always worried about signing contract before getting vacant possession. We have to do it to keep continuity, but across hundreds of contracts have had a couple of notices given, we then relet, then later the incumbent changed their mind. In one instance they accepted that notice was binding (but we let them another room by good chance available), in one we cited the old double rent /distress for rent acts (not sure if they would hold but it revived notice plan A!), and in the third we had to temporarily come up with another room for the inbound tenant. If the incumbent were to sit it out for S21, S8 or bailiffs, non-departure would be a few months' long headache. Good comms and relationships help navigate these problems, but sounds like you have good reason to be plaintive.
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    ps as a LL yourself, then if you are an  RLA or NLA member, then you could ask their helpline about the situation where there is a signed contract?
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    I have an email from them saying they won't talk to me. So I've forwarded that to the ombudsman. But frankly we needed the property not compensation!
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    Would need David Smith to confirm but from what you have said the Agent is in breach of contract. Consequently you would be entitled to sue the agent for liquidated damages which in this case would be the additional costs you have had to incur in finding alternative accommodation eg If a new flat is an additional £20 per week and your initial tenancy was the usual 50 weeks, you would by entitled to £1,000 damages + if he had to use a hotel in the area for a few weeks whilst he found accommodation you would be permitted to claim the difference it would need to be a travellodge  or similar standard

    Whilst this doesn't get you the flat, pointing out to the agent the level of damages you will seek might focus their mind on finding you something.The level of damages would fall within the remit of the small claims court, so a credible threat to make.


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    I'd make a formal complaint against the Agent,  then referring it to the Property Redress scheme.  Also,

    A  complaint against the Council,  that is usually required for the LGO  to intervene  ( as it definitely is before Prop Redress intervene with Agents )

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