Tenant Wins Return of Holding Deposit Under Tenant Fees Act 2019

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/0oAJ/HTC/2024/0003 Property : 11 [ADDRESS] [POSTCODE] Applicants : [redacted] : N/A Respondents : [redacted] : N/A Type of [NAME] : 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 : 11 June 2024

DECISION

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Decisions of the tribunal (1) The tribunal directs the respondent to repay to the applicant the sum of

£800 within 7 days of this decision being sent to the parties. _____________________________________________________ The [NAME] 1. This is an [NAME] for an order for the recovery of a holding deposit

in respect of a proposed tenancy of 11 [ADDRESS] [POSTCODE] (‘the property’) pursuant to section 15 of the Tenant Fees Act

2019 (‘the 2019 Act’).

The background 2. The applicant’s case is that during negotiations for the room, the

landlord failed to disclose a clause requiring a payment for any guests

that stayed in the property, and despite requests, the £800 deposit paid

by the tenant has not been returned. The tenant says that the landlord

has reclassified the deposit as a business (diverging) expense. The

dispute therefore concerns the £800.00 paid. The applicants’ case 3. In his [NAME] form, the applicant states he viewed the room at 17:00 on 10/11/23 and expressed interest in renting it at 19:29 the same day.

Ms. [NAME] instructed me to pay a £800 deposit in order for

viewings to cease cand to provide a passport copy for contract

preparation. The deposit was paid on either the 11th or 12th November

2023 and receipt confirmed. Upon receiving the contract, the applicant

I found an undisclosed clause which stated:

‘A guest is welcome and is charged £30 per night.’ 4. The applicant requested a modification to the clause, but Ms. [APPELLANT]

[NAME] refused. Within two days of 12th November 2023, the applicant

declined to proceed with the tenancy and requested a reasonable

amount of the deposit be refunded. 5. Ms. [NAME] response suggested the refund depended on finding a new tenant. On 11/12/23, she proposed retaining £500 for December's vacancy, requesting my bank details for the remaining £300. I consulted Citizens' Advice, who highlighted that the holding deposit exceeded legal limits under the Tenant Fees Act and that the guest charge

3 clause seemed unlawful. I explained this to Ms. [NAME] who then Ms.

[NAME] then classified the deposit as "business diverging" due

to not signing the contract and claimed a business loss for December. 5. The applicant then demanded a full refund and the respondent’s

response included false claims about previously disclosing the guest

charge and showing the contract during viewing. The respondents’ case 6. In an email response dated 4 March 2024, the respondent stated there

has never been relationship lodger-landlord with the applicant, as no

rent contract was signed. The plan of renting a bedroom at my property

was changed by Mr [NAME] after 3 days of paying £850 as a booking

fees obliged me to cancel 3 other viewings scheduled for the next couple

of days.

7. The respondent assert that because Mr [RESPONDENT] has changed his mind (the template of contract was presented to him during his viewing), I

advised him that the booking fees will be decreased by £100 if I find the

lodger from the 1st of December 2023.Unfortunately I was able to find a lodger only from the 1st of January 2023, that is why I have proposed to Mr [NAME] reimbursement of his booking fees at the amount of £300 (I have lost 1.5 month of rent @ £1350 per month because of Mr

[NAME] change of mind). He has never sent me his bank details

despite my numerous requests.

Reasons for the tribunal’s decision

8. The relevant parts (in bold) of Schedule 2 (holding deposit) of the 2019 Act state:

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

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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.

4If paragraph 3 applies, the deposit must be repaid

within the period of 7 days beginning with—

(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.

8. The tribunal finds as the landlord (respondent) and tenant

(applicant) failed to enter in an agreement by 26th November 223,being

the deadline for the agreement, paragraph 2(1) of Schedule 2 applies.

Therefore, the holding deposit is repayable in full by the respondent

by 26th November 2023.

9. The tribunal directs the respondent to pay to the applicant the sum of

£800 being the sum paid by way of a holding deposit and is a

prohibited payment of Schedule 2 of the 2019 Act.

Name: Judge Tagliavini Date: 11 June 2024

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Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) 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 (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).