Tenant Wins Repayment of Holding Deposit Under Tenant Fees Act 2019

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/00AP/HTC/2024/0009 Property :

Flat Front GF, [ADDRESS], London N17 oJP Applicant : [redacted] [NAME] [COUNSEL] : [COUNSEL] Respondent : [redacted] (2) [RESPONDENT] : [COUNSEL] [NAME] of application : For recovery of all or part of a prohibited payment or holding deposit: Tenant Fees Act 2019 Tribunal member : Judge Tagliavini Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 6 August 2024

DECISION

2 The tribunal’s decision (1) The tribunal determines the [NAME] are

required to repay to the applicant within 7 days of this decision being

sent to the parties, the sum of £323.00 pursuant to paras. 3 and 3(c ) of

The Tenant Fees Act 2019. _____________________________________________________ The application 1. This is an application for an order for the recovery of a holding deposit paid in respect of a tenancy of [ADDRESS] [POSTCODE] (‘the property’) pursuant to section 15 of the Tenant Fees Act 2019. Background 2. The applicant asserts that on or around 19 February 2024 the

respondent received payment of £323.00 from or on behalf of the

applicant, but that, despite requests, the respondents have not repaid the

outstanding holding deposit when the tenancy did not proceed. The

applicant also alleges that the landlord harassed and threatened her to

withdraw her application so that she would forfeit the holding deposit

she paid to [NAME] and that was transferred to the first and or second

respondent. Preliminary Matters 3. The application has been made on behalf of the prospective tenant

Therefore the tribunal has exercised its discretion under rule 10 of The

Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2019

to substitute the correct applicant who has the legal standing (i.e. being

a party to the intended tenancy agreement), to seek the return of a

deposit that she has paid is therefore the person entitled to seek its

repayment. 4. Although it has been asserted the applicant is a ‘vulnerable person’ it is

unclear what the nature of this vulnerability is, other than unfamiliarity

with the English language. The hearing 5. Neither party requested an oral hearing and therefore the tribunal

determined the application on the documents both parties had

submitted to the tribunal.

3 The applicant’s case 6. The applicant relied upon her application form and the copies of her

electronic messages to the respondents to support her claim. In the

application the applicant’s representative stated:

My friend [COUNSEL] has limited English and was

looking to enter a rental contract on a property, she paid a holding

deposit of £323 on 19th February 2024. My wife [NAME] [NAME]

agreed to act as a guarantor, through the website [NAME].

However she was unhappy with the landlord and the terms of the

guarantee which meant she would be liable for the rest of her life

and that the liability would pass to her children after her death.

[RESPONDENT] attempted to discuss this with the landlord and ask for

a limited position of two years, but he refused to change his

position or negotiate in any way. As a result she did not feel

comfortable going in to an open ended agreement with this

individual. The transaction fell through so the holding deposit

should have been returned according to the Tenancy Act 2019.

Unfortunately, the landlord used aggressive and harassing

behaviour to force [NAME] to withdraw from the transaction and

thus forfeit the holding deposit. As per the attached screenshots

he threatened her for a month’s rent claiming that he needed to

cover costs he had incurred from [NAME] and inventory etc.

She has limited English and funds so was very scared about

having this liability and eventually did as he ordered by

withdrawing from the transaction. This meant that she lost the

holding deposit per [NAME]’s terms and the Tenancy Act. On

raising this with [NAME] their position is that she provided

misleading information thus justifying the forfeiture of the rent.

Throughout the process [NAME] acted in good faith and did not

seek to deceive the landlord, we provided details of the messages

the landlord sent her and the pressure he put to make her

withdraw. We are therefore asking for the holding deposit (plus

interest) to be returned to [NAME].

Even if [NAME] had provided misleading information the official

government advice on the Tenancy Act says that the landlord

should only retain the cost of undertaking the reference rather

than the full amount of the holding deposit.

It's clear from the attached correspondence the landlord acting

in a threatening and harassing manner to pray on a vulnerable

person by making untrue statements about her liability

4 The respondents’ case 7. The respondents accepted made a payment of £323 as a

holding/reservation deposit for the subject property. Subsequently, the

applicant failed to enter into an agreement with landlord/agent for a

tenancy and she and/or her guarantor had provided misleading

information to or had otherwise misled the [NAME]. The tribunal’s reasons 8. The tribunal finds the following:

(i) The applicant paid a deposit of £323 in respect of a holding

deposit for a tenancy of the subject property.

(ii) The deposit was paid on or around 19/2/2024 to [NAME] who

received it on behalf of the [NAME] and who

subsequently transferred it to the first respondent on or about

25/03/2024.

(iii) On 20/02/2023 the applicant and/or their guarantor refused to

enter into an agreement with the respondents for the tenancy of

the subject property as stated by the first respondent’s email to

[NAME] dated 20/02/2023. In this email the tribunal finds the

first respondent indicated his wish to keep the applicant’s holding

deposit for ‘timewasting.’

(iii) The parties should have entered into a tenancy agreement by

05/03/2024 being the 15th day after the holding deposit had been

paid unless the applicant had withdrawn her application before

this date.

(iv) In a WhatsApp message dated 23/02/2024 the applicant’s

representative requested the first respondent to return the

applicant’s deposit. This request was repeated on 26/02/2024.

(iii) The parties failed to enter into a tenancy agreement by

05/03/2024 as the applicant was unable to put forward a

guarantor who agreed to the terms of the guarantee included in

the lease. Unfortunately, the draft tenancy agreement was not

provided to the tribunal. Therefore, the applicant’s

representatives assertions that the terms of the guarantee were

unreasonable or have been correctly interpreted

cannot be ascertained by the tribunal.

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(iv) The tribunal finds the respondent’s assertion that ‘Ms [RESPONDENT]

misrepresented herself especially her guarantor Ms [NAME] in entering into the tenancy agreement. As per [NAME]

terms and conditions the applicant cancelled the application and

[NAME] forfeited the holding deposit.

(v) On 22/02/2024 the tribunal finds [NAME] informed the

respondents that the applicant had pulled out of the tenancy for

the subject property and will forfeit the holding deposit. 9. The Tenancy Fees Act 2019 (‘the 2019 Act) sets out what are permitted

and prohibited payments that can/cannot be charged by a

landlord/letting agent to a tenant or person in connection with a tenancy

of housing. Schedule 2 of 2019 Act deals with the treatment of holding

deposits the relevant parts of which states:

1 This Schedule applies where a holding deposit is paid to a

landlord or letting agent in respect of a proposed tenancy of

housing in England.

2(1) In this Schedule “the deadline for agreement” means the

fifteenth day of the period beginning with the day on which the

landlord or letting agent receives the holding deposit.

(2) But the landlord or the letting agent may agree with the

tenant in writing that a different day is to be the deadline for

agreement for the purposes of this Schedule.

Requirement to repay holding deposit

3 Subject as follows, the person who received the

holding deposit must repay it if—

(a)the landlord and the tenant enter into a tenancy agreement

relating to the housing,

(b)the landlord decides before the deadline for agreement not to

enter into a tenancy agreement relating to the housing, or

(c)the landlord and the tenant fail to enter into a

tenancy agreement relating to the housing before the

deadline for agreement.

(emphasis added by the tribunal)

4If paragraph 3 applies, the deposit must be repaid within the

period of 7 days beginning with—

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(a)where paragraph 3(a) applies, the date of the tenancy

agreement,

(b)where paragraph 3(b) applies, the date on which the landlord

decides not to enter into the tenancy agreement, or

(c)where paragraph 3(c) applies, the deadline for agreement.

5(1)The person who received the holding deposit must repay it

if—

(a)that person believes that any of paragraphs 8 to 12 applies in

relation to the deposit, but

(b)that person does not give the person who paid the

deposit a notice in writing within the relevant period explaining

why the person who received it intends not to repay it.

(2)In sub-paragraph (1) “the relevant period” means—

(a)where the landlord decides not to enter into a tenancy

agreement before the deadline for agreement, the period of 7

days beginning with the date on which the landlord decides not

to do so;

(b)where the landlord and tenant fail to enter into a tenancy

days beginning with the deadline for agreement.

…

9 Paragraph 3(b) or (c) does not apply if the tenant provides

false or misleading information to the landlord or letting agent

and—

(a) the landlord is reasonably entitled to take into account the

difference between the information provided by the tenant and

the correct information in deciding whether to grant a tenancy

to the tenant, or

(b) the landlord is reasonably entitled to take the tenant's action

in providing false or misleading information into account in

deciding whether to grant such a tenancy. 10. The tribunal finds that no later than 23/02/24 the applicant had made

clear to the respondents she wished to withdraw from the application

for the tenancy of the subject property by her request from the return of

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holding deposit. The tribunal finds this withdrawal was made

before the deadline for the agreement was reached and therefore the

applicant was not permitted to withhold repayment of the holding

deposit. 11. The tribunal finds the first and or second respondents are required to

repay to the applicant within 7 days of this decision being sent to the

parties, the sum of £323.00 pursuant to paras. 3 and 3(c ) of The Tenant

Fees Act 2019.

Name: Judge Tagliavini

Date: 6 August 2024

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal ([NAME]), then a written application for permission must be made to the First-tier Tribunal at the [NAME] which has been dealing with the case. The application should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-toappeal-a-decision-to-the-upper-tribunal-lands-chamber The application for permission to appeal must arrive at the [NAME] within 28 days after the Tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the Tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal ([NAME]).