A Misplaced Deposit

Published on Tuesday, 02 October 2012. Posted in Case Studies


Following the end of the tenancy and the completion of the check-out inspection, the Tenants alleged that the Agent withheld their security deposit despite advising them that it would be returned. The Agent responded by denying that they had received payment of the deposit at the outset.


The Tenants explained that prior to the commencement of the tenancy they visited the Agent’s office and made a debit card payment in respect of the balance of the security deposit (£200 having been paid previously as a holding deposit), the first month’s rent and an administration fee of £36. They also produced a receipt detailing the transaction. The Agent stated that they did not have a card payment facility in their office at that time and that payment must have been made to a company operating a franchise of the Agent out of that office. As such, the Agent considered that they had no liability to return the deposit monies. However, whilst the receipt recorded the franchise name, the date of the transaction occurred nearly after a month after the point that the Agent had said that the franchise had stopped trading. Furthermore, statements within the Agent’s file recorded their receipt of the first month’s rent, which had been paid in the same transaction.


It was not disputed that, at the time the debit card payment was taken, it was the Agent rather than the franchise which was operating from the office. That the payment facility used may have been the property of the franchise was an error made by the Agent, albeit not an error which prevented them from receiving the first month’s rent. I was, therefore, my view that the Tenants should not be disadvantaged as a result. As such, I upheld the
complaint and directed the Agent to make payment to the Tenants in the sum of £1,500, being the full deposit. I also pointed out that it was for the Agent and not the Tenants to pursue the matter with the franchise given the circumstances in which payment was made.



It is essential that clear and unambiguous records of financial transactions are kept by agents and that, should any transfer of business occur, all monies are correctly accounted for. The mechanism used by an agent for collecting money cannot be allowed to disadvantage a consumer where a dispute over the
existence of a payment arises.