A letting agency in London has been caught charging a holding deposit much larger than the Tenant Fees Act allows during a dispute over the fee which took place in February this year.

Bal Real Estate Ltd based in Tooting, SW London, which has a registered address at the offices of an accountancy firm in the area, charged applicant Claire Steffer £1,000 as a holding deposit to cancel other viewings of the room within a first-floor flat in Tooting even though the rent was advertised at £1,400.

This is much larger than the one-week rent limit for holding deposits under the law.

After chasing the owner of the agency for a contract as the starting date approached, eventually one was sent to Steffer and her partner, but it appeared to be a ‘sample’ contract, contained errors including referring to a six-month not 12-month contract, cited the wrong start date and requested a £3,576 deposit, far in excess of five weeks, the legal limit.

The letting agency’s representative and sole director, Pritpal Singh Bal, acknowledged the errors and, after admitting the holding deposit was in breach of the Tenant Fees Act, returned part of the £1,000 but kept the ‘one-week’ portion of it, or £323, after the tenants withdrew citing his mistakes when preparing the tenancy.

Steffer repeatedly asked for this to be returned, but after this failed she took the agent and his firm to a Property Tribunal.

Not reasonable

Its judgement is that Bal Real Estate Ltd must return the remaining deposit, saying: “It was not reasonable for the landlord/letting agent to delay issuing the tenancy agreement and when it was issued, just before the deadline, for it to be in a form that could not be signed by the tenant.

“The tribunal finds on the evidence provided by the tenant that she took reasonable endeavours to enter into the tenancy agreement.”

The firm has until the first week in September to appeal the decision. Read the judgement in full.