Retaining Initial Holding Deposit

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charlie_164
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I agreed to let a 2 bed flat to 3 adults ( 30 year old son and his mother and her partner) I used RLA referencing which they passed and then the RLA form for Holding deposit. We have had numerous conversations via email and text and the older couple even came at my invitation to check the vacant property this week so we could discuss any issues.
We met today at the property to sign contracts and hand over keys and only now did the mother tell me that the son had a daughter and girlfriend who would also be moving in!
When the son had first called about the property I asked him who would be moving in, and again clarified this when they initially came to view.
I refused to sign the contract today on the grounds that this is only a 2 bed flat and not big enough for 5 people.
Am I within my rights to retain the deposit quoting section 7 of the Deposit form 'Where the Proposed Tenant/s (or any of them) provides false,
misleading or incorrect referencing information'
07/11/2015 16:55

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