Holding Deposit & Negotiations
Complaint
Miss F (the Prospective Tenant) complained that, after informing the Agent that she was pregnant, they had provided a poor level of customer service by breaching the terms of the holding deposit and discriminating against her by refusing to refund the holding deposit. The Agent argued that the change in Miss F’s circumstances, divulged to them after her offer had been accepted, had inconvenienced them and the landlord, adding that Miss F’s future reduced
income and potential claim for maternity/housing benefit had left the landlord no option but to withdraw from the tenancy.
Investigation
The Agent’s submission letter inferred that Miss F had deliberately withheld details of her pregnancy until after her offer was accepted. However, this inference was not supported by any information included within their file or submitted by Miss F. Furthermore, the Agent provided no evidence that the landlord had instructed them that he did not wish to consider tenants who were in receipt of benefits.
Outcome
I pointed out that it was evident that Miss F was not withdrawing from the proposed tenancy, but was merely informing the Agent that her circumstances were going to change, rather than had changed at the point of offer. Although Miss F claimed discrimination, I was more persuaded that the Agent had failed to provide a service consistent with either fairness or best practice. The terms of the holding deposit agreement clearly stated that if the landlord
withdrew from the proposed tenancy, the tenant was entitled to receive a refund of the full holding deposit. I, therefore, made an award equivalent to the holding deposit of £400 to reflect Miss F’s financial loss.
Learning
Holding deposits cover reasonable administration and referencing costs incurred by the agent. If a tenancy does not proceed, for whatever reason, it is not acceptable for the agent to claim further costs for inconvenience caused to them rather than the landlord. All agents should provide tenants with a fair service consistent with best practice.