A letting agent has been ordered to repay a £150 holding deposit taken from a prospective tenant, but not returned.

A tribunal has ruled that while it was legal to take a deposit from the applicant, the agent breached the Tenant Fees Act by failing to give it back when she didn’t proceed.

The court heard that the prospective tenant, Karen Mak, responded to an advert for a room in Wheatsheaf Road, Romford advertised by Nviri Homes.

They met at the premises and agreed on a tenancy starting on 27 June 2022. However, no agreement was signed and the relationship broke down.

The agent notified the applicant that he was putting the room back on the market on 24 June. He told the applicant that her tenancy deposit was non-refundable.

According to the First-Tier Tribunal of the Property Chamber, Mak alleged that Nviri Homes had altered the advertised terms while the respondent made allegations relating to her conduct.

Allegations ‘not relevant’

However, the tribunal ruling made it clear that these factors had no bearing on the case under the Tenant Fees Act 2019.

“None of these allegations or counter allegations are relevant to the central question of whether the respondent is required to repay the deposit,” stated Judge Shepherd.

He said the Act stipulated that “the person who received the holding deposit must repay it if…. the landlord and tenant failed to enter into a tenancy agreement relating to the housing before the deadline for agreement”.

The deadline for an agreement being reached under the Act is 15 days from receipt of the holding deposit, or 22 June in this case.

“At this date the parties had not entered into a tenancy agreement. In fact, the terms of the tenancy agreement were still being negotiated. Accordingly, the [agent] should have repaid the deposit by the 29 June 2022. The applicant had requested repayment… but the respondent had wrongly refused to repay it.”

The judge ordered Nviri Homes to repay the £150 deposit to Ms Mak.