Holding Deposit

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10 years ago
We advertised our property in the local newspaper to let and showed it to a prospective tenant on 17 May. The tenant wanted the property and we took a holding deposit of £100 and payment for the credit checks. We agreed we would not show the property to any other prospective tenants and called a number of people who were due to view the following day and advised them of the situation (we had let it subject to satisfactory references-and that if referencing did not pass we would show them around later that week). We agreed they would pay the first months rent and 1st months deposit just before moving in when the assured shorthold tenancy agreement forms would be signed The holding deposit was taken on the understanding it would be returned if the tenant and guarantor did not pass the referencing undertaken by Rentguard. They were due to move into the property 17th June, and passed the Rentguard referencing checks on 22nd May. On 7th June they wrote to us advising they changed their minds and no longer wanted to move in. We were on holiday and received this letter Saturday 15th June. They asked for their deposit of £100 to be returned, and I explained there was no agreement to repay the deposit if they changed their minds but as an act of goodwill I returned £70 to them, which was £100 less the costs of re-advertising for this week. I explained we had other people who were keen to view the property in May, but as the referencing was approved we advised these other prospective tenants the property was no longer available.

These individuals have today returned my cheque for £70, and stated that If I do not return their £100 deposit in full via bank transfer within 3 days they will take legal action.

What is the situation and do I have to return the full holding deposit? I do not feel I should have to as they changed their minds after 3 weeks and we held the property for them, turning away other prospective tenants, all of whom have now found alternative accommodation.

Please could you advise?

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