Tribunal orders letting agent to repay deposit after guarantor wrangle

In a warning to all agents, a North London agency is told to give a deposit back after failing to give adequate reasons for withholding it.

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A letting agency has been ordered to repay prospective tenants’ deposit after a dispute about how an agreement fell through.

The Property Tribunal found that Arlen Properties of North London was not justified in withholding the deposit of £346 after the tenants withdrew from a rental agreement.

Mohit Motwani and Shubham Kastiya had agreed to take a two-bedroom flat in Hendon before paying the deposit. They were asked to provide a guarantor, but the person they proposed refused based on some of the clauses in a draft agreement.

The pair were then unable to source another guarantor, and decided to pull out asking for their deposit back.

But Arlen Properties told them the deposit would not be returned, and, according to Motwani and Kastiya, did not give any reasons for the refusal. Arlen said they had emailed an explanation, but this was disputed by the pair who accused Arlen of fabricating an email.

Inadequate and inaccurate

The tribunal said the deposit must be repaid and concluded that: “Irrespective of the validity or otherwise of the disputed email of 25 October 2021, the tribunal finds the reason for withholding the deposit expressed in this email under discussion is inadequate and inaccurate and cannot justify the respondent’s actions of withholding the deposit which is contrary to the statutory provisions.

“The tribunal does not accept the respondent’s contention that the applicants had not taken reasonable steps to complete the agreement.

The tribunal is satisfied that once the applicants realised that their chosen guarantor would not proceed they did take appropriate steps to seek alternative security and only withdrew when it appeared to them that they would be unable to satisfy the respondent’s requirements,” the tribunal added.

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