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I am based out of London, Great Britain. We came to the UK last month and are a bit in-experienced with the UK market. Me and my wife are currently viewing properties around the London area and came a property marketed by a small real estate agency run by 1 or 2 people. The property looks amazing and we were ready to formalise our commitment. Today, I was a bit taken aback when the agent asked me to pay a 1-week holding deposit.

First question, is this a legitimate request? As far as I understand holding deposits are not protected by a financial scheme?

Furthermore, when I was setting up the payee in the online banking system, I got a warning from the bank notifying me that something was wrong. The real estate agent confirmed that the name of the account holder which I am using is different from the actual one on the account. When I asked for identity documentation of the landlord, I was provided with an ambiguous statement saying that the landlord used to live there before.

Second question, in the UK if as a tenant I am asked for proof of identity am I wrong to expect the same from a prospective landlord? Does this fall under the umbrella term of landlord protection?

To complicate matters, the real estate agency does not have a proper commercial address where they can be physically reached. They make use of a third-party post-box service for registration purposes. The agency itself is legitimate, has filed taxes for the past 6 years and is registered with a VAT number. They also have a number of high-value properties listed on the market for both renting and selling. Yet, their agency website is not SSL protected, LinkedIn presence is meagre at best and the agent I spoke and met with is not listed as an employee on official records. However, the agent is mentioned by name on real estate agency review sites.

Lastly, do all of these practices line up with that of someone who intends to defraud naive individuals?

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  • To clarify, you are talking about renting, not buying? I ask because in the UK, estate agents (without the "real" part) handle selling properties, while letting agents handle lettings to tenants - though there are agencies that do both.
    – Steve Melnikoff
    Commented Sep 30, 2020 at 13:51
  • @SteveMelnikoff Yes, we are renting through a letting agent.
    – FoldedChromatin
    Commented Sep 30, 2020 at 14:14
  • (Land registry contact details may or may not be up to date - presumably where the owner lived when purchasing the property - could be property itself!)
    – nsandersen
    Commented Oct 2, 2020 at 11:37

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  1. A holding deposit of up to 1 week is normal when reserving a rental property. It is governed by the Tenant Fees Act 2019. The deposit is forfeit if you pull out without good reason; if the tenancy goes ahead, then it must either be returned or deducted from the first month's rent; if the landlord pulls out, then it must be returned.

  2. This does sound a bit dodgy. Reputable letting agents should not be having problems relating to their accounts, and should be able to give you a straight answer. Are they registered with a professional trade body (e.g ARLA) and an official redress scheme? Which official deposit scheme will they be using if the tenancy goes ahead?

  3. It is possible that they are genuine but a bit rough around the edges...but it's also possible that they are not.

One thing you could do is to contact the landlord directly. If the letting agents won't give you the contact details, for a small fee the Land Registry can provide you with the title document for the property, which should include the landlord's details.

Failing that, if the agents are unable to convince you that they are genuine, walking away may be the only solution.

To address some of the other points:

the real estate agency does not have a proper commercial address where they can be physically reached. They make use of a third-party post-box service for registration purposes.

If they really are a tiny agency, they may not have an office, and their staff could all be working from home. Use of a PO Box for official correspondence is a convenient alternative to publishing their home address.

Yet, their agency website is not SSL protected

While deprecated, if they're not using their website for anything sensitive, this doesn't prove anything.

the agent I spoke and met with is not listed as an employee on official records.

What official records? Companies are not generally required to publish lists of employees (but company directors are publicly listed).

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    To the second, they are registered with ARLA and NAEA. They are also registered with the RICS deposit scheme. For the last, that would be my mistake assuming that all employees are listed on public records.
    – FoldedChromatin
    Commented Sep 30, 2020 at 15:01

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