Is this legal? - Rental booking deposit

MrMorooka

When you view a property and decide you would like to take it you have to pay a €500 non refundable booking deposit. The agent will then pass your references on to the landlord for review. Once the landlords has agreed to let to you, on the terms agreed, you must give us your home details and bank account details in order for the lease to be completed.

Took this from an estate agent's site. Am I allowed name them?

Anyway, is this non-refundable fee legal? Especially as it does not seem to actually secure the property, it is only for a chance to have your references looked at.

The_Morrigan

No you may not name and shame any business on this forum.

/Mod

FobleAsNuck

looks like a scam to me.

@Mod: if it's available online surely OP can provide a link, no?

Eldarion

Sounds REALLY scammy. Not a hope would I agree to this.

The_Morrigan

This is why....

FobleAsNuck wrote: »

looks like a scam to me.

@Mod: if it's available online surely OP can provide a link, no?

Eldarion wrote: »

Sounds REALLY scammy. Not a hope would I agree to this.

If they print T&C's on their website they are responsible for them, but as soon as a poster here accuses them of a scam/fraud/illegal behaviour -it becomes a potential problem for Boards.ie

/Mod

MrWalsh

A quick google reveals all....

I wouldnt touch it a barge pole.

ec18

I've seen it as part of T&C's before with some agents but never actually paid it. Just the deposit + first months rent

Muahahaha

I can't understand this, are the agency actually charging the tenants €500 just to get the property? i.e. on top of your months rent in advance and deposit you also have to pay another €500 which you will never get back ?

If so this is a new low in the rental sector. I wonder how landlords using that agency feel about it? Effectively the agency are making money from both the landlord and the tenant, thus making the landlords property more expensive to rent without giving them the extra money earned.

Gatling

Seen this a few years back from one estate agent in particular .
Went to see a house needed a bit of work no real issue there .
Estate agent then asked for €500 non refundable holding deposit as other people were viewing the house .
We left it there then the agent spent best part of a week ringing the wife asking for 450, 400, and so on if we agreed to take that house we viewed ,
stupid situation been honest

Atlas_IRL

A friend told me this is standard practice in the UK. He was looking in Liverpool and they all do it. Different pricing with all of them and they literally make up prices. I'd say their chancing there arm and people will pay it if they like the place..

super_furry

So does the money go towards your security deposit or do the letting agency keep it?

tele2

The €500 comes off the security deposit. I don't see anything illegal about with it. They're essentially forcing you to put all your eggs in one basket though. It means you can't shop elsewhere with the same system as if you had €500 with two different agents then you would lose €500 if both accepted your deposit to rent. For the agent it means they are not putting their clients to the trouble of reviewing references Nd then to find out that prospective tenants have gone elsewhere. It's obviously a landlords market and they are exploiting that situation. Immoral - yes, illegal - I doubt it.

MrWalsh

Do you get it back if the landlord doesnt accept you?

MrMorooka

tele2 wrote: »

The €500 comes off the security deposit. I don't see anything illegal about with it. They're essentially forcing you to put all your eggs in one basket though. It means you can't shop elsewhere with the same system as if you had €500 with two different agents then you would lose €500 if both accepted your deposit to rent. For the agent it means they are not putting their clients to the trouble of reviewing references Nd then to find out that prospective tenants have gone elsewhere. It's obviously a landlords market and they are exploiting that situation. Immoral - yes, illegal - I doubt it.

My reading of it though is that you pay the deposit before you are offered the place- as in you go to the viewing, the 50 odd people there all cough up the €500 each, then references are checked and someone is chosen. Their particular €500 comes off their security deposit, but what about the 49 others? The 'non-refundable' part implies they get nothing back. But maybe it's just the wording throwing me off, and the non-successful applicants get the money back.

The_Morrigan

MrMorooka wrote: »

My reading of it though is that you pay the deposit before you are offered the place- as in you go to the viewing, the 50 odd people there all cough up the €500 each, then references are checked and someone is chosen. Their particular €500 comes off their security deposit, but what about the 49 others? The 'non-refundable' part implies they get nothing back. But maybe it's just the wording throwing me off, and the non-successful applicants get the money back.

why don't you contact them and ask them to explain it?

Gatling

MrWalsh wrote: »

Do you get it back if the landlord doesnt accept you?

By the term "Non refundable" I doubt you see a penny again .
Wonder how many people have fallen foul of this

MrWalsh

MrMorooka wrote: »

My reading of it though is that you pay the deposit before you are offered the place- as in you go to the viewing, the 50 odd people there all cough up the €500 each, then references are checked and someone is chosen. Their particular €500 comes off their security deposit, but what about the 49 others? The 'non-refundable' part implies they get nothing back. But maybe it's just the wording throwing me off, and the non-successful applicants get the money back.

^^This - I would be very surprised if the non successful applicants dont get it back - it would just be unworkable.

MrMorooka

The_Morrigan wrote: »

why don't you contact them and ask them to explain it?

I have, sent them an email when I started the thread. If they reply I'll post it up here.

The_Morrigan

MrMorooka wrote: »

I have, sent them an email when I started the thread. If they reply I'll post it up here.

Don't post any identifying details please.

/Mod

Grandpa Hassan

Pretty standard stuff in the UK. If you get the place, it goes toward the security deposit. If the LL walks away on account of you failing credit checks, you get it back. But you commit to the property and stop others looking at it. Obiously there is scope there for a scammer to take loads of deposits and walk away, but I've only ever dealt with the big London names (Foxtons etc)

worded

Gives the EA huge cash flow if they have a few properties on the go at one time.

Say 500 deposits x 500 people at any one time 250k at any one time.

Sweet - 0% finance comps of all prospective tenants

tele2

I would say in the region of 5 deposits max. The agent will get a good feel for the prospective tenant and will only recommend imo 2/3 to the client.

Lemming

Atlas_IRL wrote: »

A friend told me this is standard practice in the UK. He was looking in Liverpool and they all do it. Different pricing with all of them and they literally make up prices. I'd say their chancing there arm and people will pay it if they like the place..

It is not standard practice in the UK. Only charge I had to pay above deposit + first months rent was the reference fee and that was when I said I was willing to rent having had a look; nothing about non-refundable deposits just to have your application looked at or any such cobblers. The only part in all of the above that was ever non-refundable was the reference fee as it went off to a third party.

Clive

I had a similar experience with a letting agency. They asked for a booking deposit which would have been part of the security deposit. What they didn't make clear was that they were taking booking deposits from anyone whose application they were passing to the landlord.

The landlord went with someone else, and in fairness the booking deposit was refunded promptly. However I wouldn't look at another property from that agency.

DivingDuck

"When you view a property and decide you would like to take it you have to pay a €500 non refundable booking deposit. The agent will then pass your references on to the landlord for review. Once the landlords has agreed to let to you, on the terms agreed, you must give us your home details and bank account details in order for the lease to be completed."

So basically, if the landlord does not agree to let to you, you still don't see your cash back?

This reads to me like a ploy to get more people on the books. "Em, that landlord said no, but sure we have two other properties you might be interested in, and that way you won't be losing your deposit?" It leaves you stuck with that one agent, essentially. Them asking for a deposit upfront is fine, but calling it non-refundable before any agreement to rent has been made is unacceptable in my book.

I wouldn't touch this with a 10(sq)ft pole, as a tenant or a landlord.

Graham

It's a fairly respectable and well known agency, I would hazard a guess that the non-returnable part only applies if the potential tenant changes their mind.

The terms go on to state that the booking deposit forms part of the property deposit and is handed to the landlord.

Probably better to wait for the agency to respond before we start passing out the pitchforks.

Zippie84

Grandpa Hassan wrote: »

Pretty standard stuff in the UK. (Foxtons etc)

some parts of UK maybe.
Have lived in Scotland years and never heard of this