The complaint

This case concerns a dispute between prospective tenants, Brian and Shanae, and a letting agent regarding the retention of a holding deposit after the tenants withdrew from a proposed tenancy.

Brian and Shanae viewed the property in March 2025. The property was marketed as being available from 1st May 2025. Following the viewing, the tenants indicated that they wished to proceed with an application on the condition that the property was cleaned, redecorated and that a hot tub was removed.

These conditions were agreed and their application progressed on that basis. On the tenancy application form, the tenants expressed a preference for an April start date, while indicating a wish to move sooner if the agreed-upon works were completed earlier.

In early April 2025, Brian and Shanae paid a holding deposit of £403. They were subsequently issued referencing forms stating a proposed commencement date of 1st May 2025.

After successfully passing referencing checks, the tenants contacted the agent on 10th April to clarify whether the start date would be 1st May or earlier. On 14th April, they were informed for the first time that the tenancy start date was dependent on the landlord completing an onward purchase. A revised commencement date of 9th May was then proposed to allow time for the agreed works following the landlord’s completion.

The dispute

The tenants withdrew from the application on 21st April, explaining that they had not been made aware that the tenancy was dependent on an uncertain onward purchase and that they were not able to proceed under those circumstances.

They also argued that the holding deposit should be returned because a tenancy agreement had not been entered into within the statutory fifteen-day period and no written extension had been agreed.

The letting agent maintained that the property had always been marketed as available from early May and that the tenants had not required a fixed start date. They also stated that the proposed later start date resulted from the tenants’ own conditions for remedial works rather than the landlord’s onward purchase, and that the tenants’ withdrawal justified retention of the holding deposit.

The outcome

The Ombudsman found that the dependency on the landlord’s onward purchase was material information that should have been disclosed before the holding deposit was taken.

As the agreed remedial works were known at the outset, the agent should have adjusted the proposed start date or clearly explained the potential delay. The complaint was supported and an award of £403 was made to the tenants to reflect the service shortcomings identified.