Can I get my deposit back if I cancel the contract?

I've paid a deposit to an agent for a flat but haven't signed the contract yet. Since paying the deposit, I've split up with my partner and I've decided not to take the flat. When I asked the agent for a refund they told me I wasn't entitled to it. At no point did they tell me it was non-refundable. Is this legal?

I’m sorry to hear you have broken up with your partner. It can make the break-up period feel worse if you have to deal with contracts as well! We’re not sure which deposit you mean, a holding or tenancy deposit, so we’ve explained both of them below.

Agencies sometimes charge a holding deposit while they take up your references. If they do this, the amount should be deducted from any rent in advance or tenancy deposit you pay once any references they’ve requested come through.

If you don’t move into the property you could lose the holding deposit, because the whole point of it is that you’re guaranteeing you will move in. Usually, you would be asked to sign a contract with the letting agent; this would tell you whether this holding deposit is refundable.

As you weren’t told the deposit was non-refundable you might feel the agency has treated you unfairly. If you do feel this way you can explore the possibility of claiming the money back in the County Court. Before taking any action you might find it helpful to seek more detailed advice from your local Citizens Advice Bureau (CAB) or from Shelter. However, if you don’t have anything in writing, it could be difficult for you to prove what had been agreed between you and the letting agent.

If the money was intended to be a tenancy deposit, it belongs to you and should be returned to you once the tenancy has ended. The fact that you haven’t signed the contract could mean that you’re entitled to the money back. However, each case is different and will depend on specifics so it’s worth going to your local CAB or Shelter to discuss the case in detail with an advisor.

There may be other options open to you to get your tenancy deposit back, which are explained on our tenancy deposit article.

If you need to claim more than £10,000 (the limit for small claims), or you’d like further help with any aspect of this situation you can get confidential advice and information from Shelter, CAB or a local advice agency.

Answered by Shelter on 20-Mar-2014

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