Tenant Wins Excess Deposit Return Under Tenant Fees Act 2019

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : HAV/29UM/HTC/2025/0001 Property : 108 [ADDRESS], [POSTCODE] Applicant : [redacted] First Respondent : [redacted] [NAME] Respondent : [redacted] Application :

Recovery of Prohibited Payment – Sections 15(3) and (5) of the Tenant Fees Act 2019 Tribunal Members :

Tribunal Judge H [NAME] [NAME] : Havant Justice Centre (via CVP) Date of Hearing :

19th August 2025

Date of Decision : 26th August 2025

DECISION

2

Decisions of the tribunal

(1) The tribunal refuses the application of [COMPANY] for the case to be struck out. . (2) The tribunal joins [RESPONDENT] as a [NAME] respondent to the proceedings.

(3) The tribunal orders the First Respondent and the [NAME] Respondent (with joint and several liability) to pay the Applicant the sum of £537.69 by way of deposit repayment, such repayment to be made within 28 days of the date of this decision. Introduction 1. The Property is a building in Sheerness, Kent in which the Applicant sought to rent a room which was advertised to let by [COMPANY], acting as estate agents.

2. The Applicant seeks the recovery of a prohibited payment or holding deposit of £699.00 under Sections 15(3) and (5) of the Tenant Fees Act 2019 (“the Act”).

3. The application was received on 10 April 2025 and was made against the First Respondent only.

4. The basis for the application is the holding deposit the Applicant paid exceeded the permitted maximum of one week’s rent (as provided by the Act). The Applicant withdrew from the letting and seeks the return of the amount paid. The deposit was paid to the [NAME] Respondent. The respondents assert that the monies held were set off against monies owed to them.

5. The First Respondent has applied for the case to be struck out on the basis that it is merely a holding company and had no involvement in the letting of the Property or the receipt of the deposit.

6. The tribunal was provided with a bundle running to 43 pages. The contents of this were noted by the tribunal. The First Respondent has not provided a response to the case beyond arguing that it is not the correct respondent and so has provided no evidence.

7. The hearing was conducted using the CVP video service. The Applicant attended as well as [NAME] [APPELLANT] [NAME], who identified himself as an executive director of the First Respondent. There were no other witnesses present for either party.

3 Relevant statutory provisions 8. The relevant statutory provisions are contained in the Tenant Fees Act 2019.

9. The Act provides that any holding fee in excess of one week’s rent is prohibited. This is called a prohibited payment and can be recovered by the payor, including by reference to this tribunal. Identity of Respondent 10. The First Respondent argues that it is not the correct respondent to these proceedings. It claims to be a holding company, to have no interest in the Property or responsibility for it and to have never advertised it. It also contends that it has had no communication with the Applicant. [NAME] [APPELLANT] contends that [COMPANY] is a trading name which is not owned by the First Respondent ([RESPONDENT]); he asserted that the trading name is owned by a different and unidentified entity. It has therefore applied for the case to be struck out. 11. [NAME] [RESPONDENT] emphasised he was there on behalf of the First Respondent. He answered questions from the panel. He refused to say who the correct entity was and repeated that the correct entity had much evidence to put to the tribunal but had not done so because the wrong entity had been served as respondent.

12. The bundle provided by the Applicant had contained an email dated 20 March 2025 on page 28 to the Applicant from [NAME]/[COMPANY] [EMAIL]. [NAME] was taken to this email, who said it was not from the First Respondent. He said this was the trading style of [RESPONDENT], to whom the deposit had been paid. He was asked who the directors and owners of [COMPANY] were, he confirmed it was owned by the group but he was not there to speak on its behalf. 13. [NAME] [NAME] acknowledged that the email from [NAME[NAME] showed a website address – www.kushman.co.uk. He also agreed that this website had at its end the following words: © 2025 The [COMPANY]. All rights reserved. [COMPANY], and [COMPANY].

14. [NAME] [NAME] argued that it was not fair to join [RESPONDENT] as a co-respondent as no response had been prepared on behalf of them. It was noted that [NAME] [APPELLANT] later spoke fluently on the events involving the Applicant and the non-return of her holding deposit.

4 15. The Applicant commented that [NAME] [APPELLANT] claiming not to know the Applicant was clearly untrue and he had sent the Applicant multiple emails. She argued that the group operated as one entity as the same directors operated across all entities and they traded from the same location. She contended that they were claiming a complicated structure to avoid liability for their actions. Tribunal consideration 16. The tribunal considered [NAME] [NAME] to be an unconvincing witness and felt his answers were deliberately unhelpful and disingenuous. His assertions were un supported by any evidence.

17. They began by considering whether the First Respondent was the correct respondent. They noted that it was said to be the holding company for the group and that both it and [COMPANY] had the same two directors, [NAME] [NAME] and Ms [NAME]. They both had the same registered office and the First Respondent had control of the [RESPONDENT]. In addition, [NAME] [RESPONDENT] and Ms [RESPONDENT] had control of the First Respondent. No evidence was provided as to who owned [COMPANY] trading name but ultimately ownership would rest with the top company.

18. The tribunal then considered the email from Ms [NAME] contained in the bundle. This does not identify any company that she was said to be acting on behalf of. No evidence has been provided who owns [COMPANY] trading name. There is a reference to the deposit being paid to [COMPANY] but no indication in what capacity it will receive it. As referred to above, there is a reference in the email to the website; the First Respondent is clearly held out as its owner and that it incorporates various other companies.

19. The tribunal concludes that the First Respondent is deliberately attempting to use the lack of detail to evade liability in this case, trying to rely on contended technicalities but without providing any evidence in support. However, the tribunal concludes that the similarity of directors and their ultimate control together with the evidence from the email and website means that the First Respondent is indeed the party that held itself out as the agent advertising the Property and who collected the deposit. As it is the correct respondent, the strike out application must therefore fail.

20. The tribunal accordingly refuses the application of [RESPONDENT] as respondent for the case to be struck out.

21. The tribunal then considered whether [RESPONDENT] should be joined as [NAME] respondent. It has already found that the First Respondent is the entity that held itself out as the agent and collected the

5 holding deposit. However, the actual deposit was paid to [COMPANY] and [NAME] [NAME] confirmed that the group still held the deposit. No evidence was provided as to whether that was [COMPANY] or another entity. However, as that company had been paid the deposit and was controlled by the First Respondent, the tribunal considered that it should be joined as a party.

22. The tribunal accordingly joins [RESPONDENT] as a [NAME] respondent to the proceedings.

23. The tribunal then considered whether the [NAME] Respondent should be given the opportunity to provide evidence. The First Respondent had had a full opportunity to provide evidence but had instead chosen to rely on technical arguments to seek to avoid liability. Running those arguments did not prevent it providing a response and so it has no excuse for that failure. In addition, the [NAME] Respondent has the same directors as the First Respondent and no evidence of a distinction has been provided. It has been joined as a party merely because it received the deposit, not because it was advertising the Property or sought the holding deposit. No benefit would therefore be served by allowing to provide evidence and so it would not be permitted to do so. Holding Deposit 24. The Applicant explained that she had seen a room in the Property advertised to let by [COMPANY] on [NAME]. She did a virtual viewing organised by Ms [NAME], following which she agreed to take the room. By the email dated 20 March 2025 referred to above, Ms [APPELLANT] said the Applicant could rent the room, subject to credit references and was required to pay a deposit of £699 “at the earliest to reserve the room for yourself”. She said she had not signed an agreement, saw no terms and conditions and did have any breakdown of what the deposit comprised. She paid the £699 deposit.

25. The Applicant further explained that she changed her mind about proceeding and told [COMPANY] on 28 March 2024 she could not afford the amount payable. She asked for the return of her deposit but said she did not receive a response. She then visited the respondents’ then registered office to seek the return in person. This was a private residential address where she took photographs, including of the house and cars outside.

26. She then explained that she joined a WhatsApp group of persons who had supposed deposit issues with [COMPANY]. They sent what they called settlement letters to the respondents; this letter has not been provided to the tribunal. The Applicant says she then received a response from [NAME] [APPELLANT], refusing to return the deposit and saying it was being offset against costs the respondents had incurred. She then (rather ill advisedly) sent the respondents an email, impliedly threatening to key

6 one of the respondents’ cars if the deposit was not returned. The response from [NAME] [APPELLANT] and the Applicant’s email have also not been provided to the tribunal.

27. The Applicant accepts that the First Respondent would in normal course be entitled to retain one week’s rent, amounting to £161.31. However, she believed all the deposit should be returned as she contends that the First Respondent did not act faithfully or transparently. 28. [NAME] [APPELLANT] responded, arguing that the Applicant’s account was not accurate. He contended that the Applicant had wanted to move quickly and so the amount paid represented one week’s holding deposit and three weeks’ rent. He then listed a sequence of actions supposedly carried out by the Applicant, including multiple calls (supposedly up to 18 per day), hacking the respondents, whipping up an online furore against the group, threatening them through emails, visits and calls, vandalising [COMPANY]’ properties and keying his car.

29. No evidence was provided to support these allegations, other than the Applicant’s express admission of her implicit threat to key a car. He said that this would have been provided had the correct respondent been served. The Applicant denied the alleged actions and expressly confirmed that she had not caused any physical damage. 30. [NAME] [NAME] said that they had reported this to the police but decided they had other priorities rather than to file an online report which was required by the police; this was not therefore pursued.

31. He argued that the rental element of the £699 deposit would normally be returned but had not in this instance. He argued that the Applicant had acted in bad faith, had provided incorrect information for the purposes of her credit reference (no detail or evidence for this was provided) and had carried out the alleged actions referred to above. He argued that the respondents had suffered losses as a result of the Applicant’s actions and so the three weeks’ rent was kept as compensation for this. Tribunal consideration 32. The tribunal considered the evidence and the submissions made. It began by considering whether the £699 had been all a holding deposit or only part, as contended by the respondents. It concluded that the wording of Ms [NAME] email makes it clear that the whole amount was a holding deposit “to reserve the room”. There was nothing to support [NAME] [NAME] contention that the excess represented three weeks’ rent. As the letting was not completed, there was no basis for the respondents to continue to hold it as rent, in any event.

7 33. As a result, £537.69 of the deposit represented a prohibited payment for the purposes of the Act (that figure is £699 less one week’s rent). The Applicant was therefore entitled to the return of that amount. The tribunal dismissed the respondents’ argument it was entitled to retain this to cover damage it had suffered. No damage had been evidenced and it preferred the Applicant’s evidence to that of [NAME] [APPELLANT].

34. The tribunal then considered whether the remaining one week’s deposit should be returned. The Applicant had withdrawn without good reason and so, under the Act, the respondents were entitled to retain it. There is no provision for its return if a party acts in bad faith. Even if there was, the Applicant’s implicit threat to key a car would negate it. It therefore determines that the Applicant is not entitled to the return of the balance of the deposit over the £537.69 referred to above.

35. The tribunal accordingly orders the First Respondent and the [NAME] Respondent (with joint and several liability) to pay the Applicant the sum of £537.69 by way of deposit repayment, such repayment to be made within 28 days of the date of this decision. Cost applications 36. The Applicant has not paid any application or hearing fees in relation to these proceedings, as a result, the tribunal makes no orders as to fees.

8 Rights of appeal 1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to [EMAIL]

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.