I Haven’t Protected My Tenant’s Deposit, What Should I Do?

For a general overview and background on tenancy deposits, please refer to the tenancy deposit guide. For those of you that are familiar with the legislation but have failed to protect your tenant(s) deposit for one reason or another, you’re in the right place.

Brief reminder of what is required to comply with the Tenancy Deposit Legislation

To be in compliance with the Section 213 Housing Act 2004, any money taken from a tenant as a security deposit must be protected in a Government approved scheme with in 30 days of receiving it. Just to clarify, it is NOT a legal requirement to take a deposit, so this legislation only applies to those landlords that do (which, quite frankly, is most).

After the deposit is protected, the tenant must be given the Prescribed Information related to the protection of the deposit, also with in 30 days. NB. Make sure you have evidence that you have done it.

It’s also worth noting that ALL deposits ever taken must now be protected– even those taken before 2007 when the original deposit legislation was introduced (that was previously NOT the case). Landlords had until the 23rd June 2015 to protect deposits!

Once the deposit is protected and the proscribed information is served with in the allocated time, you have complied with the law until the tenancy ends – even if you allow it to roll on (known as Statutory Periodic Tenancy) after the fixed term has ended.

I didn’t protect my tenant’s deposit!

Mr Forgetful
If you are one of the many landlords or Letting Agents (yep, they screw up too, but that’s probably no surprise) who have not protected your tenants deposit you’ve got a problem. Well you know that otherwise you wouldn’t be reading this. Hello, welcome.

There have been so many changes to Deposit Protection Legislation, since it was foist upon us in the Housing Act 2004, it’s not surprising that so many landlords get it wrong– but unfortunately ignorance is no defence in law.

I am going to do this backwards because it is when a problem shows its ugly face that most landlords realise that they have screwed up, so let’s look at some of the most common scenarios (sadly, none of which will save you), and from my experience, when most landlords frantically start becoming concerned about their non-compliance…

1) My tenants are threatening me
Your tenant(s) has discovered they can prosecute you and potentially make a quick buck by seeking compensation for your failure to comply with the law. Either you pay compensation or face legal action.

This is unbelievably common, which is pretty sad. More about what to do in this scenario below.

2) I need to get rid of my tenant but I can’t serve a Section 21
The penny usually drops when you reach for a Section 21 Notice and read the notes which tell you what you have to do to serve a valid Notice on your tenant.

If the Deposit Protection Legislation has not been followed, you’re screwed – meaning your only option is the hassle of a Section 8 Notice where you must prove grounds for eviction (which you may not even have).

3) The Judge threw out my Section 21 because I had not protected the tenants deposit
Most savvy tenants will take advice when they are served with a Section 21 and one of the first questions they will be asked is “Did your landlord protect your deposit?” Followed by “Did he send you the legally required information about your deposit protection within 30 days?”

If they cannot answer YES to both questions they will be told to contest the Section 21 in court. That’s when the Judge will most likely look at the details and throw the case out of court, so here you are.

4) A bloke in the pub told me that I should have protected my tenants deposit – what is he talking about? I didn’t have a clue!
This is a typical case where the landlord has just one property, from when he moved in with his girlfriend, and hasn’t a clue about the landlord legal requirements. You have also heard through your sources that the tenant can gain compensation… and now you’re scared, wondering if it’s all true.

Yes, it’s true.

5) I forgot!
You forgot to protect the deposit and/or serve the prescribed information (not sure how many people will believe this one!).

Any of the above sound depressingly familiar? If your case is not one of the above (or similar), please leave a comment with the details…

I didn’t comply with the tenant deposit legislation– what can I do?

Now, let’s get to the crux of the matter.

As it stands, these are your options:

  • Recommended solution: Protect it now and serve the prescribed information hoping that if an issue arises and it goes to court the Judge will take the view “better late than never”
  • Pay the deposit back to the tenant and hope that he doesn’t find out that he can get compensation, although it might be difficult to explain *why* you’re giving it back.
  • If you’re trying to get rid of a rogue tenant, use a Section 8, with grounds for eviction.
  • Do nothing, but sit tight and pray that your tenants don’t realise protecting the deposit and serving the Prescribed Information is a legal requirement and/or they don’t care enough to seek compensation because you’ve been an amazing landlord.

If your tenant hasn’t mentioned anything…

There’s a good chance your tenant isn’t aware of the tenancy deposit legislation or the ramifications of failing to comply. It’s also not unusual for tenants to be aware, but waive their right to prosecute because their landlord has been reasonable throughout the tenancy.

The point here is that you don’t want to give your tenant a reason to look into the legislation or exercise their right to claim compensation.

  • The most common reason why tenants proceed to take legal action is because they feel screwed about the return of their deposit (i.e. when landlords try to make deductions over trivial and menial damages, which actually, quite often fall under wear and tear). So when it’s time for them to vacate, forget the temptation to deduct £90 for carpet cleaning, or £50 for picture hook repair, just let it go. Otherwise they may start looking into their rights. Generally speaking, biting your lip and absorbing those costs is the safest and cheapest option!
  • The second most common reason is failure to complete repairs promptly, or making repairs at all. Ignoring your duty to maintain and repair is a sure-fire of pissing your tenants off, consequently giving them reason to prosecute given the opportunity. So with that in mind, and ethics aside, it might be sensible to ensure your attend to repairs and maintenance issues promptly, and generally be a good landlord all round (you should be anyways, mind you!).

    It’s also worth noting that if your tenant does take the matter to court to seek compensation (regardless of whether you’ve been a good or bad landlord), some Judges do take into consideration how the landlord has conducted themselves during the tenancy before determining how much they should be penalised.

Can I get in serious trouble for not protecting my tenant’s deposit? What can happen?

Putting it bluntly, you have broken the law, so yes, there can be consequences.

  • A tenant, who takes legal action, can expect to be awarded compensation because his legal rights have been denied. A Judge has the power to award between 100% and 300% of the deposit in compensation and may also instruct you to return the whole deposit. This can be an expensive loss, not just because of the compensation, but also if you actually need use the deposit to cover damages.
  • Because you have not complied with the law, your rights to use legal process to remove a rogue tenant have been reduced- you can no longer use Section 21 of the 1988 Housing Act (which is often the most efficient method of removing a rogue tenant).

My tenant is threatening me with legal action, what should I do?

Ok, so presumably shit has hit the fan; your tenant has discovered you failed to comply with the deposit legislation, and now they’re after a handsome payout. Unfortunately, this is becoming a terribly familiar scenario, rightly or wrongly so.

What to do at this stage will depend on the individual circumstances, so there isn’t a simple solution for all. However, there’s more information available in the “ways you can legally end a tenancy agreement.

My letting agent did not protect the deposit…

Oh dear.

Your hired help has failed you. Common scenario.

So where do you stand in this case? Are you given the luxury of mercy? Unfortunately, you’re in the exact same position as if you have no association with a letting agent.

If you are using a Letting Agent and they do not protect your tenants deposit correctly– you’ll still ultimately be held responsible. Even if you have not touched a penny the law states that the deposit was taken on your behalf and therefore you are responsible. That’s why it’s essential to ensure that your Letting Agent is a member of a Property Redress Scheme (legally required since October 2014) so at least you will have redress if they screw up.

A Letting Agent cannot go to Court for Possession without the property owner, he can go with you as what is known as a “McKenzie Friend”. He can complete the Notices and other documents but you must sign them. Only a legally qualified person can represent you in Court.

Does anyone else have any additional tips to share? Do you have any experiences to share regarding this matter, weather you’re a landlord or a tenant? I’d love to hear your story!

434 Comments- Join The Conversation...

Showing 384 - 434 comments (out of 434)
Guest Avatar
Nelly 3rd September, 2017 @ 12:44

@David,

I've been reading through all your comments and help given and thought I would ask if you could help me at all? I started a 12 month contract (AST) with my landlord in December 16. I have 3 months left to pay and requested if I could end the contract early as I'm relocating. The agency stated I would pay £200 for relisting fees etc to see if anyone would be able to move into the property but in that time I would be responsible for rent up until the end of my contract - so all is fair in my mind. They then came back to me and said the landlord is not willing to relist the property on the market even with me paying the fees because he has other properties in the same building that need to be rented - I understand that the landlord has to look out for his own interests but I explained to them that some of these flats have been on the market since June and also do not boast the same features that my flat does (balcony, rustic reatures etc) however they still said no and that I would have to pay until the end of my agreement. I'm waiting for a response regarding advertising the flat myself and finding someone and if all applicable with the new tenant whether the landlord would accept that as alternative means as I really can't afford to pay rent on two flats or even if it saves me 1 month worth of paying two lots of rent it would be helpful.

So I'm clutching at straws at the moment, my deposit was put into a deposit protection scheme within the week I moved in so there's nothing wrong there. The only thing I was wondering about was my inventory, I was sent an unsigned PDF of the inventory before I moved in and then given a hard copy to sign which I annotated loads on it and signed but was never given a copy of what I annotated or a copy of it being signed by the landlord - would this or could this be something to nullify the contract at all or give me some leverage with them?

The landlord and agency are being so difficult with me and I know they are just taking me for a ride because they know they can. I understand my hands are tied as I am in a 12 month contract but I was wondering whether there would be anything at all that could nullify my contract? Thank you in advance

384
Guest Avatar
David 3rd September, 2017 @ 14:07

@Nelly

The inventory you signed is the legally valid one, it does not matter that they have not returned it to you nor does it help you legally.

What may help you is if they did not serve the prescribed information telling you where the deposit was, this may have been done by the deposit company in their paperwork, but it is often a thing the agents are sloppy at. Ideally they should have given it to you and had you sign a copy, otherwise hard to prove a negative.

Regarding breaking your agreement, the law and guidance on this is pretty clear, that the Landlord has to mitigate your losses. That means he has to make every effort to replace you at the lowest reasonable cost. The fact that he is advertising actually reduces his costs to you as he was advertising anyway.

Now things are not sweet between you, but is that the Agent saying that or have you been in direct contact with the Landlord?

If you have direct contact with your landlord send him this link or quote the logic.

http://www.propertyinvestmentproject.co.uk/blog/your-tenant-wants-leave-early/

The fact that there are other properties in the same block un-let suggests that Landlord may be asking over the achievable rent. You should also find the LHA rate and record proof of both as they can show he is not making every effort to rent the property and will not with yours.

Now assuming your tenancy does not have a break clause

http://www.propertyinvestmentproject.co.uk/blog/tenancy-agreement-break-clauses/

you have several options.

Advertise the flat on OpenRent at 10% over what you are paying or as much as you think you can get away with, check out the applicants, type up a copy of your tenancy agreement of download one off this site and amend it to be a close a match as possible. Put the Landlords name as the Landlord, advertise, no checking in fee, no admin fee but high deposit of 6 to 8 weeks rent, this is to weed out some at low end, you should be asking for people who are employed but seeking professionals.

http://www.propertyinvestmentproject.co.uk/blog/landlord-advice/finding-tenant-guides-for-landlords/

Make sure you meet your landlords requirements, no pets, no children, no dss, suitably employed for long period of time, legally allowed to be here, consider age, professionally employed single people in their 50's can be good option, only risk is if they might get married again, they also look after property better than some younger tenants.

Be mindful that the agent may see the ad so try to make it look like a different one in same block, be wary of emails that ask the address. Shortlist down to 5 tenants and do the Donkey work on the referencing, that means copies of payslips, checking them out on social media and tenant referencing

Follow the suggestions on tenant referencing in article below but the first thing to do is to call the old Landlord and ask them one question "Would you let your property to this person again" do it on the phone, then follow up with rest.

http://www.propertyinvestmentproject.co.uk/blog/guide-on-referencing-tenants/

Now having got to this stage you could sign up the tenant, which would be a bit naughty or you could say to the landlord,

"I have someone who is willing to move in, I have gone to the trouble of referencing them for you and they came back great, I also took the opportunity of increasing the rent by X percent, which is more than you are asking for other flats you own in this building.

Mr Landlord, you do not have to proceed with these tenants but I have taken advice and I understand that you are obliged to mitigate my loss, I have demonstrated here that I can be replaced for £50 referencing, there will be no loss of rent, in fact there will be an increase and you will have no agent fees. You are of course free to use an agent, but these days online agents have shown that letting agents are scum sucking bastards and unnecessary creatures that will soon be extinct.

If you do decide not to take one of these proposed tenants I will of course be using the above in any legal action required to recover losses. To this end I have not paid my last months rent and you can offset that against my deposit. I have taken a video of the property to show that it is the same condition as the amended itinerary I signed and provided you with at the beginning of my tenancy.

I have always hoped we could resolve my leaving early amicably, but I feel that your agent is working against you here, probably because of their fee and their incompetence.

Another reason I think that you should jump at the chance to proceed is that December is an awful time to find tenants,

http://www.propertyinvestmentproject.co.uk/blog/poor-quality-tenancy-enquiries/

my departure actually gives you the opportunity to get one of the best times annually, post holiday, pre Christmas.

Please confirm whether you would like to take on these tenants, I am willing to have a meeting with them and you at the property at a time that suits you.

Either way I will be leaving at the end of September."

Now if you paid your rent already then this is going to be end of October, but that is up to you, I would get them in ASAP.

Now how well it works depends on the type of Landlord you have, by not paying your rent you recover your deposit, you have created a defence for any claim he may have against you and to be honest he would be foolish not to jump at the chance if you give him good tenants which are almost fait accompli.

Now do NOT NOT NOT to via the agent, do a Land registry search of your property if your tenancy agreement does not list the landlord (or shows the agent as Landlord).

Or just ask the agent for the details of the Landlord, failure to provide this is grounds to withhold rent.

If the Landlord is a bit of a lemming and relies totally on the agent you can expect the agent to contact you after the landlord contacts them. They may want to find reasons to reject the tenants but it does not matter, you will have the referencing info and that will be good enough to defend any case.

Some landlords will create damage to try and suggest a claim on your deposit, you can ask the deposit holder to arbitrate this and I can give you what you need to quote them.

To be clear, the landlord has to make every effort to rent the place ASAP to mitigate your loss. If the agent takes too long to list it, top long to see people, etc then you evidence will help you. They cannot charge you fees such as agent fees which they would have had anyway in a few months, not any other fee that could have been avoided.

bit.ly/oftguide

He would need to bring a case against you in small claims Court and to be honest it is hardly worth the effort, especially as you will have created a defence.

If you do a good enough job on finding replacement tenants he should jump at the chance.

385
Guest Avatar
BUDGIE 4th September, 2017 @ 10:27

I would like some advice please as I have made a boo boo. I have unintentionally not placed my tenants deposit in a TDS. This is my first time renting so I can honestly say I had no idea but I know this is no excuse and I hold my hands up to this.
The tenants are great and I am a very good landlord. Their tenancy is up on the 29/10/17 and I plan to renew it. However today through the post I received a letter from the council requesting information for them to claim Housing Benefit (which if I am honest I am not 100% happy with. Anyway one of the questions on the paperwork is "Has the tenants deposit been put into a TDS and if yes provide evidence". Am I right in thinking if I say no this will no doubt hold up or stop their application.
Or do I ask the tenants to sign a new contract from today return their deposit to them and then they give it back to me again and then put it in a TDS? Is this legal and would this affect their housing benefit claim as all the information they want would be from todays date of the signing of the new contarct.

386
Guest Avatar
BUDGIE 4th September, 2017 @ 10:35

Sorry I meant to add or do i pay the money in today into a TDS and hold my hands up to the tenants and will that be ok for the council or would the council still reject their claim as I did not protect their money within the 30 days
thanks in advance

387
Guest Avatar
David 4th September, 2017 @ 11:53

@BUDGIE

No I doubt it will hold up the payment, they only need to confirm that the tenant is paying the claimed amount of rent.

They may ask other questions for other reasons, for example if they ask if you have served notice or plan to evict the tenant it may signal that the tenant is actually seeking housing.

Check with the tenant so you can keep things friendly.

You are under no obligation to tell them if the deposit is protected, they are just being nosey, it is common for them to check with a tenant who has applied for housing as the failure to protect a deposit is a show stopper for an S21. Same applies to a current Gas Safety and an EPC done within last 5 years.

If it is just a Housing Benefit claim I would drop them a line simply confirming the tenancy, and rent amount, maybe send them a copy of the tenancy agreement.

I would protect the deposit TODAY, it helps your case if you can be shown to have protected the deposit as soon as you became aware, keep the paperwork from the Council, just in case.

I would not bother renewing the tenancy, tell the tenants that you are happy with them as tenants and plan to extend the tenancy indefinitely by allowing it to become a Statutory Periodic Tenancy, so it will roll over month to month, the terms of the previous contract still apply and the law says you have to give 2 months notice should you wish to end the tenancy and they only have to give one month (on an SPT).

Now this is a time to enhance your relationship with them because in my experience it is only tenants who feel a sense of loss that come after landlords for deposit sanctions.

Remember that people relate to people, not emails or phone calls. Ask to drop in to see them in next few days as you would like to get their input for letter you got from Council. Take the opportunity to ask them about their situation, do they have reserves in case the Council does not pay 100% of the rent, are they prepared to have HB paid direct to you (usually requires 6 weeks of arrears but can be done by agreement - you will always be paid 4 weeks in arrears though). Ask them if they are seeking social housing (usually only available for vulnerable or someone with children who are at risk of being homeless).

Say to them that you would like to support them at this difficult time by not applying any stress, say about happy to continue on with them on SPT, bear in mind that if they give you notice or leave because you offer SPT it will scupper any attempt they have of getting social housing as they will have intentionally made themselves homeless.

Now would be a good time to advise them that you have protected their deposit which was an oversight and that you would like to offer a settlement of £300 for any inconvenience. Doing it now and having a written settlement that this is in full and final settlement of any Housing Act Sanctions will prevent them coming for free money in the future.

Have a look at this page for guidance for negotiating

http://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

The reason to get this done now, is firstly that things are sweet between you and secondly because they are beholden to you, if they want to stay beyond October they need you to agree (i.e. not to issue an S21 with 2 months notice).

People change once they leave, the relationship is over and they have no reason to be nice.

388
Guest Avatar
Nelly 9th September, 2017 @ 18:53

@David

Thank you so very much David for your quick response and chivalry. I have quite a fair bit to add since we last spoke on here and I am sorry for all the following questions I have!

With regards to serving me notice re deposit. I was sent an email from the TDS deposit company stating my deposit was protected (this was done within 10days of me moving into the property). I looked through my contract and I found in schedule 4 of the contract details of where my deposit is kept, safeguarded, I.e. the company name, address, telephone number, email address along terms of the deposit, such as ‘interest gained will be kept by the landlord and or agency to recover administration cost (which I myself find disgusting that this is and can be the case). I take it this is the prescribed information? Apart from whats in my contract that I signed, I don't believe I signed anything else regarding my deposit with TDS.

I was initially in contact with the agency, and it was them who said my landlord has said no to re-listing the property. But wasn't sure how much information they were relaying across to the landlord, so as I didn't trust them, I emailed the landlord directly, of which I got a somewhat hostile email from the agency stating I should liaise with them at first hand and not the landlord. I would say things are not sweet between me and both the landlord and agency now.

Regarding early termination, breaking my agreement, my contract states in two areas: Schedule 1: To pay to the landlord or the agent all reasonable cost and expenses awarded by the court or incurred by the landlord for the following: any re-letting costs or commission incurred by the landlord if the tenant vacates the premises early apart from according to a break clause. Schedule 3: If the tenant vacates the premises during the term apart from according to any agreed break clause which is included within the agreement, the tenant will remain liable to pay rent and any other monies payable under this agreement until the term expires: or the premises is re-let whichever is earlier. Sadly there is no break clause, so, I don't know why they have included this in the contract but based on the above, I assume if my landlord did agree to re-let it, I would have to pay the associated costs? I would be tempted to ask for a break down of these costs to see what it actually does entail?

To give you some perspective on the landlord, he owns around 100 flats in the building I am living in, which he has one agency that looks after all of those flats on his behalf.

As mentioned previously, I emailed the letting agent and copied the landlord into the email regarding me finding a new tenant instead and whether they would be happy with that. It has now been over 7 *working* days and I STILL have not heard from the agency. Does the agency have a legal responsibility to respond to tenant queries within a certain time frame?

I took on board what you said about advertising, I bumped into a girl near my flat who I started talking to, she informed me that she was supposed to visit a property in my building with the agency I am with but that she was running a little late and the agency left. We got talking and I showed her my property and she loved it and wants to move in ASAP. During that time, the agency called her and rearranged her appointment to visit the property she was supposed to have seen this Monday instead, however she has her heart set on my flat now. I informed her not to mention she has seen my flat as they might use her ‘international student status’ as a excuse for not accepting her as a new tenant for my flat, do you think that's okay? Also I thought if they allow her to actually view another property in my building then that gives me more ammunition against them rejecting her as a potential tenant for my flat? Although I read that students should not be discriminated against if affordability isn't an issue? Also how hard is referencing for international students?

During my talk with this girl she asked if she could negotiate £600/month (I currently pay £625 - but she said if they say no she would be happy to pay £625), so I informed her that I would honour this, so I was thinking to inform them that I have a tenant and would they accept £600 and see if they accept that before submitting the awesome letter you wrote regarding my notice to them and state that she would accept the rent I am currently paying. What are your thoughts? When I send this email stating I have found a tenant, what is the legal time requirement for them to respond to my email? I have read somewhere it’s about 48hours?

Also if I were to submit my notice letter for end of end of sept, do I need to vacate my personal belongings from the property at the time of my email or can I wait until the end of September (when I plan to move my things) or should I wait until I hear from the landlord/agency? Also if I do serve them with this notice but they do not act upon using the tenant I found for my flat, do they have a right to take my deposit?

Thank you so very much regarding the information you gave me earlier, if I was a landlord and my tenant found a suitable replacement tenants, how could I not help them vacate early? I feel karma would only come and bite me in the backside!

Very much looking forward to your advice and ideas!

389
Guest Avatar
David 9th September, 2017 @ 21:43

@Nelly

There are no legal obligations about how long they take to reply.

With regard to the PI, it is THEY not the TDS who must give you the details of the deposit protection, this MUST include the reference number under which it is protected, they have to have evidence you received the information.

If the TDS sent you the information with a password and you used that password to log into the portal that would be evidence you received it. The deposit organisations are happy to support landlords in this regard because it is landlords that choose them.

I have seen cases where I knew damn well the tenant had received the information via DPS but the Judge ruled it was the Landlord who had the responsibility. That too was a case where the terms had been provided as means of removal but no reference number.

I had another case where the Landlord provided their own information as provided by the DPS but that too was dismissed because it did not give the tenant access to be able to make protect to the deposit company

This is the PI

2.—(1) The following is prescribed information for the purposes of section 213(5) of the Housing Act 2004 (“the Act”)—

(a)the name, address, telephone number, e-mail address and any fax number of the scheme administrator(1) of the authorised tenancy deposit scheme(2) applying to the deposit;

(b)any information contained in a leaflet supplied by the scheme administrator to the landlord which explains the operation of the provisions contained in sections 212 to 215 of, and Schedule 10 to, the Act(3);

(c)the procedures that apply under the scheme by which an amount in respect of a deposit may be paid or repaid to the tenant at the end of the shorthold tenancy(4) (“the tenancy”);

(d)the procedures that apply under the scheme where either the landlord or the tenant is not contactable at the end of the tenancy;

(e)the procedures that apply under the scheme where the landlord and the tenant dispute the amount to be paid or repaid to the tenant in respect of the deposit;

(f)the facilities available under the scheme for enabling a dispute relating to the deposit to be resolved without recourse to litigation; and

(g)the following information in connection with the tenancy in respect of which the deposit has been paid—

(i)the amount of the deposit paid;

(ii)the address of the property to which the tenancy relates;

(iii)the name, address, telephone number, and any e-mail address or fax number of the landlord;

(iv)the name, address, telephone number, and any e-mail address or fax number of the tenant, including such details that should be used by the landlord or scheme administrator for the purpose of contacting the tenant at the end of the tenancy;

(v)the name, address, telephone number and any e-mail address or fax number of any relevant person;

(vi)the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy; and

(vii)confirmation (in the form of a certificate signed by the landlord) that—

(aa)the information he provides under this sub-paragraph is accurate to the best of his knowledge and belief; and

(bb)he has given the tenant the opportunity to sign any document containing the information provided by the landlord under this article by way of confirmation that the information is accurate to the best of his knowledge and belief.

(2) For the purposes of paragraph (1)(d), the reference to a landlord or a tenant who is not contactable includes a landlord or tenant whose whereabouts are known, but who is failing to respond to communications in respect of the deposit.

http://www.legislation.gov.uk/uksi/2007/797/article/2/made

Now even if they have given you default information I would not recommend trying to go after them for this, a Judge can go either way.

With regard to what they write in the contract they can only charge their actual costs, the guidance is quite clear and Judges use this guidance as a bible for unfair contract terms, common law also applies for mitigating loss.

"3.49 We would object to a term in a fixed term tenancy that requires a tenant who leaves early, without the landlord's agreement, to pay rent for the remainder of the period in full. Although a landlord is normally entitled to the rent for the
whole of the term, whether or not the tenant remains in occupation, a tenant may have a valid defence to a claim for rent. In those circumstances such a term would be an excessive penalty. This would also allow landlords to escape their obligation to reduce (or 'mitigate') their loss, by re-letting the property to another tenant."

They are also not allowed disguised penalties

"3.58 We will object to any term that requires excessive payment in the event of the tenant's early termination of the agreement, or where the tenant does anything else against the landlord's wishes. A penalty clause may have the
appearance of a 'core' term, 25 but, if it has the effect of an unfair penalty, the form of the term is not relevant and it will be regarded as a penalty clause. A penalty cannot be made fair by transforming it into a provision requiring payment of a fee for exercising a contractual option. For instance, we would object to a term requiring payment of the full rent for the whole period of the tenancy where the tenant ends the tenancy early. We are unlikely to object to a term requiring a tenant to pay a reasonable re-letting fee and the rent due until the property is re-let, where this would be less than the outstanding rent for the remainder of the fixed term."

These are in the guidance which you can download here:

bit.ly/oftguide

The difficulty you have is that the agent is close to them so they may delay just to stitch you.

So my previous advice stand, just do it.

The one issue I would have with the Student is that if she had already made contact the with agency then they may consider themselves as the introducer. It may not be an issue as the Landlord seems to want to use them and is happy to pay them.

I would have tried to get the rent UP not DOWN as it would have really secured you as it would be an offer they cannot refuse.

You also may expose yourself to cost of advertising although as you say they advertised for another flat.

I just feel would have been cleaner if you had got the tenant yourself through open rent or if you got this girl and she had been pre-approved by the agency.

With regard to your stuff, my advice would be to hire a garage from a local housing association. If you are able to give notice but go immediately (subject to inventory and video) then they would have even less reason to decline as you would effectively surrendering early and in the event that they did come after you a Judge would say they had unfettered access to the property and you already paid most of September.

If you are going to leave your stuff there then you delay things, in that tine, they could be cleaning the property, redecorating it and so on.

I very much doubt that they would take legal action, it is so expensive and if you create the defence as I outlined above the risk is too high for them.

I would do all I said in the previous message, get her vetted, make sure she is legally here (this is now a legal duty of Landlords).

I did say to withhold your rent, it focuses their mind and you can be sure they will be calling you or returning your calls. They can take the deposit for non performance of contract, subject to contract being fair.

They can drag the void out for a month which is why I gave the advice above.

Our own government is crap at referencing people abroad, but there is no reason for you not to follow up her references, maybe ask her if she can find a guarantor in the UK?

I know you met this person and you liked them but in business you have to take the sentiment out of the equation. You might say to her to go back to the agent (assuming is same one as yours) have them show her another property and vett her, then when they offer her the property she can say she prefers yours.

Otherwise I would just follow my previous advice, do the donkey work yourself!!

390
Guest Avatar
Nelly 10th September, 2017 @ 09:06

@David,

Thank you again the in depth response and advice.

I was never given a username and password regarding logging onto the TDS website therefore have never accessed or had any contact with TDS and therefore the PI. Do you think I have leverage here? Should I add this information to my email, as correct me if I am wrong but I can technically I can claim 3X my deposit?

If I tell the new prospective tenant to ask the letting agents to see my flat in particular and or any flats that are due to be released in the next month or so, would they have to be forthcoming with that information? More specifically, could the prospective tenant, say whilst I was waiting for the agency lady to view the other property initially planned, that she happened to see another flat (flat XXX -my flat) and I understand the tenant is looking to vacate immediately, can I therefore take that flat as I really like it?

You have already mentioned getting the prospective tenant to go along with another property and once the vetting is complete, she can say she prefers mine. Could this back fire and the letting agents say no to my flat at that point to her? Or are they legally obliged to go with the prospective tenant demand of wanting my flat and so can let my flat out, mitigating my losses? Would she need to put a deposit down and or sign anything that would tie her to the other property during the vetting process?

If I vacate the property with all my belongings into storage and then submit the letter, would I drop the keys to the agency that same day or just leave the keys in the flat and close the door behind me?

Thank you again for your advice, ideas and help.

391
Guest Avatar
Nelly 10th September, 2017 @ 09:29

Also David, my water and electricity meter readings can only be done through the agency (location is difficult to get to), could the agency mess me around here too? Should I ask for the meter readings before sending the email so I know they don't screw me over here? With regards to council tax-do I just tell the city council I am no longer living in the property, and would therefore fall onto the landlord? Thank you again

392
Guest Avatar
David 10th September, 2017 @ 14:40

@Nelly

As I said, in my opinion you should follow my initial reply as using this lady reduces the defence I outlined in that reply for the reasons stated in my 2nd reply.

It is a free market and a free country, as I originally stated if they are not managing to rent all the properties then it is likely a case of asking too much rent or over supply. You said he owns hundreds of flats in that area, that suggests a big city like London or Manchester but rent seems low for London. It is up to him or agent which one they prioritise, some of those may be ready to move in, he may have to spend money giving your property a refresh (some landlords do this between every letting to maximise rent).

Ironically the site owner just published this on why a property is not letting

http://www.propertyinvestmentproject.co.uk/blog/why-isnt-my-property-renting/

With regard to meter you can ask the energy company to read the meters, no landlord (other than HA) can impose energy supplier on you so just change energy supplier, use Uswitch or similar, consider deals from companies where you can't switch via uSwitch but are shown on Uswitch site. e.g. Solarplicity. Or just ask your energy company to read meters.

You do not want to just drop off keys, everything must be documented, you need to deal them a done deal. So ask they do an inspection and inventory and if they decline say you will get another agent to do it. In reality you just do a video of it empty with zoom in everywhere, especially the areas you highlighted in the inventory you returned.

Nelly, learn from this, never sign an agreement without a break clause unless you are prepared to take the risk but also do not give somebody the disputed inventory until you have photocopied it. It does not matter as you can refer to the one you signed and demand the original if it ever got to Court, it would help if you had emails from around that time that referred to the signed but disputed inventory. Never walk away without there being evidence you have left, so at least walk in get a receipt for the key or video yourself returning the keys with a date stamp (if they become stroppy).

As I said you are much better delivering them a potential tenant, so to mitigate your defence, ideally not the tenant they found. No there is nothing that says they have to offer your flat, you could ask the girl to send you an email saying she wants your flat because of balcony and outlook etc and retain that as evidence. Then ask her to go in but they could still decline just as they could put rent up to £900, it is a free market. However, they can just have their own reasons to let one of their other flats. Still you will be able to show someone wanted your flat and they could have let it.

If your Landlord has over 100 flats each at £600 and the agent is on just 10% then the agent could be on £6000 a month income or £72k a year. That may seem a lot but they may just be a busy person. It does explain why you and agent are not best buddies.

The way the deposit sites work is that you can search for them with just the month, postcode, surname and rent amount. From what you have said it sounds as if they gave you generic information, i.e, your deposit is/will be protected at the TDS and here are the terms. I guess the real clincher is WHEN did they take the deposit, if it was a week or so before you took occupancy it may have been protected and the reference buried in the paperwork somewhere.

I have seen Judges say that it was enough that you knew where it was protected and others that say not. You can of course deny having received the comms from TDS but you can't deny what you signed in your contract. I know with DPS they have a lax policy of sending email and only send SMS at beginning of tenancy if the email bounces. Having got that admission from the DPS it was easy to show that the tenant was not informed.

If their email had a "receipt request" and you did not disable that in your email client then it is possible TDS have that, whether they are that organised or even would share it, the data protection act does apply here and certainly can be tricky.

So you could mention that you have not been given adequate details of your deposit protection in accordance with the legislation, they would refer to the tenancy agreement and you might then argue that this does not meet the standard of the legislation. It is thin but might make them think a bit or might piss them off. You could bring it as a counterclaim if they bring action on your breach of contract but as I said, if you create a good defence as outlined above you make that more risky for them.

It is funny how many Landlords end up on the end of tenant wrath over deposit issues because they behave in a petty way. The landlord should have just let you break the contract.

So although this girl may seem like an easy option I would follow my original advice, if she comes through meanwhile then great, certainly get her to go to agency, let them show her another flat, let them reference check her, makes sure she gets an email confirmation of acceptance, then and only then, she flips and asks them via email if she can have your place instead. So you get the girl to forward you the email from the agent saying she has passed referencing, and a blind copy of the email where she says she wants your flat, plus their response to that request. Make sure it is all done via email.

393
Guest Avatar
David 10th September, 2017 @ 14:42

Yes you tell the Council you vacated the property on X date, perhaps give them the name of the new tenant if things work out

394
Guest Avatar
Nelly 10th September, 2017 @ 16:43

@David, thank you again for all your advice and the quick response.

I will follow your advice on your first reply regarding advertising it myself etc. By doing this and say this girl falls through, should I withhold my rent due at the end of September? (By this time I would have relocated 4hours away and completely vacated the property and then that would be 1 of 3 of the last months of rent due).

I will inform this girl not to tell the agency that she has seen my flat first and get them to vet her, although I wonder if they will charge her a fee or an upfront holding fee if she initially goes ahead with the flat she is going to see with the agency tomorrow. And also whether they will be bastards and eventually refuse her a right to my property just because they can and then she looses this money invested.

Thank you with regards to making the video, I will make a video with the memory of the comments I made on the inventory, I am slowly learning everything you have taught me, just feel like a bit of an idiot with not photocopying it and to my loss there are no emails with regards to it being amended either.

The city is a large city and northern one which may account for why rent is cheaper here.

I paid a holding fee of £200 a month before I moved in and this was used as part payment for my deposit which I then made 5 days before moving into the flat. I know this was not protected beforehand as I just found an email from the TDS company who attached the protection certificate to the email they sent me. It states when TDS received the deposit, which was the date by which I got the email from TDS regarding my deposit protection (10days after I moved in|) and interestingly it states when the landlord received my deposit which is documented as the date I moved in, but the money left my account on a working day-5days before that date. Does that detail matter? It also seems that the landlord has two company names, one of which I pay into every month and another which is on the certificate as the landlord.

Thank you for all your advice, I honestly feel like such an idiot and dislike how unwilling they have been towards me, I have only grown to dislike them due to this and how they have been hostile towards me for no reason as I have been nothing but pleasant with them. I also feel quite stuck and I am starting to loose sleep over what if I don't find someone or the difficulties of travelling to show potential interests around my flat and then the landlord taking me to court :(

I can't thank you enough for all your help, I will not forget this and will give some charity in your name and hope only good karma comes your way David.

395
Guest Avatar
David 10th September, 2017 @ 18:52

@Nelly

Yes end of month seems fine, if you can give them possession before that and have the emails from the student then you will have what you need, make sure you do it in the stages I outlined above.

Tell the girl to decline to pay holding fee, no doubt they will charge her for the referencing.

Tell her to say, I will not pay a holding fee until you are happy you are prepared to let me rent one of your properties, have her say she has been advised this by CAB as agents have a habit of holding on to tenants money thus preventing them taking another property.

Have her say, "I am extremely interested, but I want to go through referencing and have a written offer by email before I pay any money." By saying it is CAB advice she has authority.

If they have that many places empty they will keep her sweet and if not let her walk as the procedure is the correct one, I would not pay a holding fee unless I had an proper offer, they can't make an offer unless they are happy with a tenant.

They will play scarcity game and she can say "I will take that risk, surely it will not take you long to get me approved".

The detail DEFINITELY matters, go to Land Registry, spend three pounds getting the title deed for the property. It should match the name of the Landlord. The different name you are paying could be because you are paying the agent, what does it say in the tenancy agreement? (do not mention names here on this public page, just say if they are same).

Let me be clear, if the deposit does NOT contain the correct name of the Landlord then the deposit protection is VOID under part (iii) of act above. It sounds to me like it might be a tax dodge, you may be paying an offshore company. If you need to send me anything confidential do so by the forum link above on this site, once registered my profile is below, you can PM me a google drive link or similar via that forum.

bit.ly/davidpip

As I mentioned previously, if you ask for the name of the Landlord and the agent does not furnish it can be grounds to temporarily withhold rent. You can't mention the certificate right now, but it is helpful for you to know who your real Landlord is. We have had cases here where agent pretended to be agent, they can give their address as serving address for Landlord but they have to give you the bona fide Landlord details and if you look at part iii above they have to give full details and confirm it is true to best of their knowledge. If there is a discrepancy between what is stated on the tenancy agreement and the Deposit certificate then the deposit protection is void legally and they are in big trouble.

Now it may all be fine, but if you were to feel unsure, bitter and upset with them if they do not treat you fairly, a call to the Inland Revenue giving them a copy of the company and bank account you are paying and the land registry search and the tenancy agreement might be something they are interested in pursuing, especially if you mention it is 1 of 100 they own.

With regard to deposit protection, you have 6 years to file a claim, you can mention it only when they have threatened you with taking legal action, at which point you can seek a settlement. Can you imagine if that agent has screwed this up on 100 flats? You could go from door to door, offer to take 20%!

As for the date of the money, it is from the moment they take the money, it must be protected within 30 days of taking the money.

Don't lose any sleep over this, I have no doubt they will bark loudly but that is a scare tactic, if they have indeed screwed the deposit up they will back off and seek a settlement.

Remember what I said in my first reply, you just need enough evidence to show they have NOT mitigated their loss, you are right to have belt n braces with the student, if you have both then the Judge will see it for what it is.

However, I doubt it will get that far, the civil procedure rules mean they have to write you a letter before action, they have to try to resolve matters and avoid Court. If you show them you have a solid defence and they proceed anyway they can open themselves up to your costs for not settling (wasting Court's time).

As I said, do not worry, once you are gone and they have the keys back they will just want to get it rented because they have lost income. Make sure you leave the flat super clean, if the tenancy agreement says you have to pay for professional carpet cleaning get that done.

Then take the video of the whole flat, first of all a walk around then in video2 zoom into everything that did not match.

Do not feel foolish about any aspect of this, it is how we learn in life.

396
Guest Avatar
Bob 11th September, 2017 @ 17:52

David, a section 8 has to do with the behaviour of the tenant, not whether the owner wants to sell.

397
Guest Avatar
Bob 11th September, 2017 @ 18:27

David, my previous post is in reference to your post of 3rd July, 2017 @ 07:06.

398
Guest Avatar
David 13th September, 2017 @ 07:28

@Bob

Sorry you misunderstood my comment, I was just picking the relevant part of S8 in response to Lee's post.

Lee 2nd July, 2017 @ 20:01

"we are going to SELL our rented out house and have informed the tenant that when the tenancy comes to a end we will no be renewing it and we will be selling the property."

Hence my response

"Section 8 is the appropriate law if you are selling, although probably a bit more expensive it is more likely to succeed, some prefer to do both. "

If you want to be anal retentive on my posts I will not waste my time, but if you wished to generalise about S8 I think it would be better to say

S21 is no fault or reason, S8 is about fault or reason

If anyone is in doubt they can read this page

http://www.propertyinvestmentproject.co.uk/blog/section-8-evicting-tenants/

and this one

http://www.propertyinvestmentproject.co.uk/blog/end-terminate-tenancy-agreement/

399
Guest Avatar
vic 26th September, 2017 @ 12:43

@David
To continue on my saga with tenant claiming for compensation due to me not protecting/serving PI on itme
I've been reading on my AST agreement and it says in one part:
The Landlord lets to the Tenant the Premises for a period of 12 months. The Tenancy shall start on _________ (the first day of the tenancy) and shall end on ________ (the last day of the tenancy). If, at the end of this time, you want to continue the tenancy and you have not already received from us two months' notice to end the tenancy, it will carry on from month to month as monthly contractual tenancy. You must give 1 month's notice to end it. This notice must end on rent payment day.

My question is, does this section of AST agreement means that the tenancy is no longer an AST, but a contractual tenancy and am I correct that under contractual tenancy is not covered by Deposit Protection scheme, so landlord does not need to protect deposit?

Thank you

400
Guest Avatar
David 26th September, 2017 @ 14:23

@Vic

I am afraid not, no contract can override common law, if it tried it would become an unfair contract term.

What that part is saying is that if the contract is not extended and you remain in the property you will go month to month on an SPT, that happens in law whether or not it is specified in the contract.

So the law in this area works in two ways, usually it is a snapshot of what the law was at the time, but in deposit protection legislation there have been amendments (from 3x deposit to between 1x and 3x), also amnesties (which have expired) and new legislation which helps you.

The deregulation act effectively says "if you have been naughty on your initial tenancy you will get a slap, but if you did the right thing then you will not be punished again for the transition from AST to SPT.

Let us take a hypothetical situation, a Landlord issues a tenancy in 2011 which rolls over in 2012 to a periodic which ran to 2016 when a new AST was issued and protected properly and which subsequently rolled over in 2017 to another SPT.

The 2011 tenancy would face a sanction of between 1x and 3x the deposit, as would the 2012 tenancy. There would be no sanction for the 2016 tenancy as all was done properly and the Deregulation Act 2015 would mean the 2017 SPT did not need to be re-protected so no sanction payable.

The argument you would make to the Judge is that you only had one property, you were a novice landlord and were unaware of the legislation, however, as soon as you did become aware of it in 2016 you correctly protected the deposit.

You would would ask the just to consider that you are indeed culpable but there is mitigation in that you protected it as soon as you became aware. The act allows for between 1x and 3x sanction for each breach at the discretion of the Judge, you can remind the Judge that their discretion in such cases was confirmed and ratified in OKADIGBO vs CHAN appeal at the High Court:

"In my judgment, however, the judge was entitled to regard the question of culpability as the most relevant factor in determining what order to make and was entitled to find that the culpability in this case fell at the lowest end of the scale for the reasons which she gave. It is not as if the breach was uncorrected and therefore, although the appellants were lacking the protection for a period of some months, in the end matters were put right."

http://www.bailii.org/ew/cases/EWHC/QB/2014/4729.html

Note that in that case they had an agent so depended on professional advice from them but I have seen many Judges give the 1x sanction with no agent involved and there not being an issue of the deposit not being returned, i.e. it was safe and no harm done.

I advised you previously to negotiate with the legal firm, you need to tell them that your case has mitigation and you will be asking the Judge to take the above discretion into account, so you are prepared to offer them what they will likely receive in Court, 1x sanction for each of two of the tenancies.

They may of course go after their fees, but you can say they are excessive and they may lose costs for not accepting the offer as they should be well aware.

Then it is a case of how prepared you are to show your mettle and call them, a Judge will take a dim view of them wasting the Courts time when a settlement has been offered which is likely to be similar to what S/He might award, hence they often punish this by not awarding costs, some even award your costs.

As I have said this is always a game of P O K E R, you have to be prepared to lose but your liability is between 1x and 3x on just the two pre 2016 tenancies (assuming that was protected properly and PI issued - both within 30 days).

I hope this helps.

401
Guest Avatar
vic 26th September, 2017 @ 14:53

@David,
Thank you very much again for clarification and fast response.
Kind Regards

402
Guest Avatar
J.Sterling 3rd October, 2017 @ 15:10

Seeking advice for a terrible situation!

Entered a 12 month AST with tenant in Nov 2015, tenant was due to pay £1000 deposit, and first month’s rent of £1500 upfront. Excluding separate agreement to pay £34 monthly towards the water rate, which I pay myself.

I accepted the tenant with only £500 deposit, in total she was due to pay £2534 and she only paid £1,500 but promised to pay towards the deposit in monthly instalments of £50 during the contract term, until the full balance was settled. I told her I would put the deposit into a protected deposit scheme, once she settled the full sum). She moved in with her two children, paid towards the deposit for the next two months, and then no more.

Throughout the term she underpaid the rent by £200 and failed to pay anything more towards the deposit. I sent her three letters in total, reminding her of the deposit, and her failure to pay for some furnishings I bought for the house, and she had verbally agreed to pay for. The letters also contained details of how she had breached some of the contract terms:

The rent was continuously late, she had a party (against a specific clause in the contract), she failed to keep the porch door secure and locked (a standard tenancy obligation to secure the premise) and eventually moved her brother and his girlfriend in (excessive and prolonged occupancy). I granted the AST under the agreement that the premise was for her and her two children only. When there was a an issue with the outer two front doors, I agreed to pay for new locks, and gave her the money to arrange it. She agreed to provide a copy of the property keys once the job was done. She never gave me the keys despite verbal reminders, and two further letters.

In a nutshell she continuously broke the contract terms, and eventually refused to speak to me or answer the last two letters I sent to her. If I see her in person she ignores me completely.

My question is- now I have filed and paid for a possession order hearing including the rental arrears- will I get into trouble because I have not protected the deposit, relying on the tenant to pay the full amount, and knowing that she was told it would be protected once she paid the full balance?

Is there anything I can do to help my situation and increase the likelihood of the hearing going in my favour?
She owes over £5,000 now, and I just want my property back!

I served her a s21 at the end of the contract term Nov 2016- before I was aware that I needed to protect a deposit 30 days after receiving it- and she STILL has not left the property!
Please help!!!!

403
Guest Avatar
David 3rd October, 2017 @ 17:58

@J.Sterling

First of all I must point out to any Landlord reading this that if a tenant can't afford your deposit, they are never going to be a good prospect. Personally, I recommend taking much higher deposits (which of course should be fully protected) just to set the bar higher in terms of calibre of tenant.

Do not take pity on single mothers with kids who are needy or you will be asked for this that and the other. I can't fathom why you would be paying for new locks and other furnishings, even if you did pay for locks, then YOU should have employed locksmith and got a copy of keys. Albeit that any tenant is within their rights to change cylinder for £7 off ebay as long as they return your original or give you same number of fitting keys at end of tenancy.

One of the things I have found important on here is to ask you to give me the full story, because some people have just posted a bunch of lies which has led to bad advice albeit based on what was said here.

if you issued a S21 in November 2016 then there is a lot you are NOT telling me from the last 11 months. S21's have to be used so either you did not use it or it got thrown out because you did not protect the deposit.

In simple terms your new case will probably be thrown out unless you have since protected the £500 deposit, look you do not get to decide not to protect the deposit until she has paid it in full and to be honest you were nuts to enter into such an agreement. Your paperwork will probably say £1500 which means there is a risk of your penalty being £1500 x 3 although I think a decent Judge will accept it is £500 if you have proper evidence of payment. We recently had a case on here where a tenant did not pay the deposit but the paperwork said they had. The payment was made in cash which is never a good idea.

You do not say whether she moved to a Statutory Periodic by staying in the property after the initial term or whether you issued another AST. This could double your sanctions unless the first tenancy was just extended and not replaced.

You do not say what sort of proceedings you issued, I am assuming S8 for non payment of rent?

With regard to the breaches unless the tenancy agreement says what happens in the event of each and every breach it just opens her up for breach of contract. For example you might have had an explicit written agreement that the tenants will be her and her two children and any additional tenants are prohibited without your express written permission. You might say that in the event that additional people stay in the property for more than one night a week then she agrees to pay a rental surcharge of £100 per night per person. It is not reasonable but it at least gives you recourse to take her to Court and seek that money, you would of course need evidence.

As you are unlikely to have such a clause you may want to get in touch with the local Council and say she is over occupying and ask them to make a visit to determine if this is the case because you are worried about fire and other health and safety concerns. They will tell you their findings, what you might also find is that some of them are on benefits and making housing benefit claims. They may even be committing fraud. If for example she is claiming housing benefit and has moved people in without declaring to the Council she is in BIG trouble, if she is paying Council tax with the 25% discount but has moved other in, she is committing fraud and the Council will take that seriously.

I do not understand how you can say "Throughout the term she underpaid the rent by £200" but you also say "She owes over £5,000 now" so as I said you need to explain the full story (without personal details).

For now I would suggest that the deposit of £500 is protected before the hearing or it is going to be a short hearing.

She may make a counter claim and ask for S213-5 sanctions against you, you can ask the Court NOT to hear that matter "on your dime", in other words if she wants the matter of the S213 sanction to be heard she must pay the Court fee just like everyone else. The Judge can throw out your case for non protection of deposit but they are not obliged to hear the matter of the S213-5 sanctions. You could ask they if they do consider the sanctions that they are minimal as you are a novice landlord, that your breach was based on her unfulfilled promise to pay the deposit in full and you can ask it to be set off against any arrears.

I am sorry to be hard on you but you have been a total doormat in this situation and it just proves that if you are a doormat people will walk all over you and wipe their shit on you too.

This is war, you need to put her on the back foot, contact the Council immediately about the over occupancy, get that deposit protected and get a decent Solicitor who has experience in going after tenants in arrears as well as other housing law issues.

With £5k of arrears this is never going to be an issue of settlement, you need the CCJ and the eviction, you can pursue her later. I am sure she will use your eviction to get social housing but make sure the Council are made aware that she has these arrears, that way she will NOT be entitled to social housing until your debt has been repaid.

404
Guest Avatar
J.Sterling 10th October, 2017 @ 16:01

David - I am extremely grateful to receive a reply from you

I'll clarify the points you made in your response.

I am in total agreement that I have been very naïve which has not helped the situation. I am related to the children, and I can see that fact has blind sighted me. I would not have put up with any of this from a stranger.

- I was away at work and the local locksmith was only able to do an emergency call out at the tenant's convenience. That is why I provided the money and gave the go ahead. I agree that I should have been relentlessly persistent to receive a copy of the keys.

-I issued a s21 notice to the tenant at the end of the contract term (Nov 2016), and refused to issue another AST so as you said, it is a statutory rolling arrangement. She has still been paying rent each month since the expiration, and still occupies the premise. The s21 was sent to her via post, but I did not escalate it to court when she remained at the property, so the s21 was not technically thrown out. She simply chose to ignore the paperwork and I did not take her to court until this point in time.

I have a bank statement which shows she paid £500 towards the deposit and a further two payments of £50. I also have copies of letters I sent which detail that as a fact. So there is a tangible audit trail to that regard. In addition, the money never moved from my personal bank account and still remains there now.

Completely agree with your suggestion about the council, they are currently investigating her... I have received a visit from them, and confirmed my knowledge of the excessive occupancy.

-So during the actual contract term, and also after the expiration (and conversion to a statutory implied contract) she has underpaid the rent by £200 each month - so my approximate calculation of £5,000 is since the start of the contract term in Nov 2015.

-I have registered with a deposit scheme and the money will immediately go in there this week. Thank you for advising on this point David. It was a complete mistake and I can only plead ignorance. I had no idea that 'any' deposit must be protected. In addition I did not know that the lack of deposit protection can render a s21 notice invalid!

-I will most certainly take your point on board about a possible counter claim, I've paid £300 for this and I will not cover her costs! I agree I am a novice landlord and have much to learn.

-I will contact the council to chase up their investigation, and let them know about the arrears- if they did not already note it down when they visited.

David- Thank you so much for your advice. I completely appreciate what you are saying, and you are not being hard on me, the truth isn't always pretty. I was too kind, and a complete doormat, she exploited the family tie to her advantage.

Any more replies are much appreciated, thank you so much.
I have a hearing date for next month, and the court notice will be served to her today.
I will protect the deposit I received, and send her the deposit scheme details so she is lawfully aware of it.

You are doing wonderful work on this forum and you are a valuable resource.
I'll update after the court date in case my situation is of use to someone else who has gotten themselves into a predicament like mine.

J.Sterling

405
Guest Avatar
David 10th October, 2017 @ 21:17

@JSterling

It is always messy to do things for family, you will always be the villain if things go wrong. If the children are related I am guessing this is an ex which would be really unfortunate, but even if a nephew etc it just adds complication.

The lock is done now, she could have done it herself, getting you to pay for it is a first, it suggests she can clearly manipulate you.

If you issued the S21 in Nov 2016 you could only bring proceedings until May 2017 (Sec 36-4D Deregulation Act 2015), so I am guessing you issued a 2nd S21 or S8? Otherwise she has merely to call the Court and ask them to dismiss the proceedings under the said section of the Act. You will lose your Court fee.

She may have been paying rent but not the full rent and the arrears provides for S8, it is sometimes worth bringing because they can avoid being kicked out by bringing the arrears up to date.

The S21 is a no fault possession, so although you can mention them they will most likely not rule on them specifically but may take them into account when determining your liability for S213-5 sanctions. You might both find surprises if you have both not paid the appropriate fee for the Court to hear particular aspects you wish the Court to consider (each with it's own form). So you bring the S21 you pay a fee for that to be heard, but unless you bring the S8 action too the Court may decide )or the other side may ask them) not to hear it. At the same time you can ask the Court does not hear the S213-5 Sanction claim unless she files the appropriate paperwork and pays the appropriate fee (files the appropriate form if she is on benefits). Courts are being much more strict about these things and she may avoid a CCJ, but just be ordered to leave within 14 to 42 days.

You have a bank statement but that only shows what you can prove HAS happened, we have had people on here with tenants alleging they paid cash. The letters could have been written now, an email from her with your email below would be better. If you have had a personal relationship with this woman she may allege you reduced the rent by agreement, she may say you fabricated the letters to support your own case. She may even allege you "traded" the arrears for favours - you have to be ready for anything. She will have to file a response to the S21, if she is well advised and you are relying on the original S21 she can have the case thrown out under S36(4D). If you are relying on the original S21 issued Nov 2016 you are best to withdraw your possession hearing and issue a new paperwork (S8 or S21).

The Council will help her stay where she is because the longer she is in your property the longer the delay before they are obligated to provide the initial 6 week assessment.

It is good that the deposit has finally been protected, you can plead as suggested, just be aware that the Court MUST issue a minimum sanction of 1x the deposit and no more than 3x the deposit. If you have not brought the S8 then they may make you pay the sanction and leave the arrears for you to sort out in another hearing.

You really needed to get the deposit protected BEFORE you issued the S21, delivering the S21 is the commencement of the claim for possession, the proceedings are only required if the tenant does not leave at the end of 2 months. If you fail to start proceedings the S21 is void anyway.

When I mentioned counter claim I really meant for damage to property if any. You will not get your costs if she gets your case thrown out and you may have to pay her costs.

A Court does not make allowances for your ignorance of the law, they also expect you to know on the law that you are basing your claim on before starting a claim.

Of course she will do what she can for herself and her kids, it is called survival.

This is not my site, I just try to help where I can, Landlord or Tenant alike, hopefully others who read this at least avoid the same issues by protecting their deposits in one of the three approved schemes.

Normally I try to urge toward settlement but in a case such as this she is not going anywhere until you make her, she may be doing it to get social housing but she may be in for some surprises if she is found to have made herself intentionally homeless.

406
Guest Avatar
Courtney Buttigieg 16th October, 2017 @ 13:22

Hi!

In brief, we have served a s.8 notice on our tenants due to them being in rent arrears. They are refusing to leave and we have therefore asked for the case to be listed at court.

The big problem we have is that we did not place their deposit in a protection scheme at the time (although we have done now). I am concerned that the judge may well not grant a possession order due to this and wanted advice as to what I could do to remedy this.

Help!

407
Guest Avatar
David 16th October, 2017 @ 21:28

@Courtney

Avoid giving your full name, the only problem of cutting a long story short is that there may be aspects that may need consideration, but based on what you have said...

Section 21 is about no fault possession, Section 8 is about there being grounds to bring the tenancy to an end, these are covered here:

http://www.propertyinvestmentproject.co.uk/blog/section-8-evicting-tenants/

If the Tenant does not pay the arrears (at least 2 months worth) the Judge can grant possession regardless of the deposit being protections if the grounds exist. Note that possession is not eviction, you still have to get a bailiff. A tenant can still screw you by paying enough of the arrears to bring it to say 6 weeks or a month still in arrears, then argue grounds no longer exist.

It is likely that the Tenant will issue a counter claim and ask the Court to sanction you under S213-5, it is possible to delay that if the tenant has not filed the appropriate form although you are only putting off the inevitable and you may push them into the hands of a claims company. If they are on full benefits they do not pay for forms anyway but I have seen cases where a Judge will say to them that they have to file correct paperwork and continue to hear the possession.

All matters before the Court have to follow Civil Procedure Rules, versions of these are online but the Court and legal profession rely on the White Book which has copious notes that can be helpful.

There is no defence if the deposit has not been protected within 30 days, just mitigation, which will affect whether they hit you with 1x 2x or 3x. You can ask that such a sanction be offset against your arrears BUT DO NOT ASK BEFORE THE JUDGE HAS MADE THEIR RULING as it may make them issue a bigger sanction. Wait for them to rule on the sanction, then once given, ask whether it can be offset.

Some argue that it is better to frustrate the Tenant and make them fill out the right paperwork but with claims companies being all about the fees I say just take your bad tasting medicine, your objective is to gain possession, then evict.

If they try to get the case thrown out be clear to point out to the Judge that they are mistaken as this is not a section 21 case and you are following section 8 and asking the Court to consider whether you have grounds and make the appropriate determination.

408
Guest Avatar
Chuddy 17th October, 2017 @ 11:16

Hi,

We Rented a Property In June 2017. The property was In need of considerable repairs which we were assured by the Landlord would be done within a 2 week period of us moving in the property.

We Paid £3,500 Deposit and the first Month Rental Payment of £2,500.

We have now been In the Property 5 Months none of the Repairs have been done, we are paying £2,500 to live In a Property with Rotted french Doors which have glass falling out, doors that do not close throughout the upstairs of the property, damp throughout the property and guttering falling down which would cause serious Injury If It fell on somebody, wasps nests and a infestation of Ladybirds.

I have witheld the rental payment as I am very annoyed at the Landlord and his promises to rectify all problems , which Is just not happening.

I questioned the Landlord about my £3,500 Deposit as I had not received Information from any Deposit Protection Scheme, he has told me he has his own Business Deposit scheme and does not have to use a Goverment Backed one.

Can you give me Advice on what I should do.

409
Guest Avatar
David 17th October, 2017 @ 17:36

@Chuddy

Wow it seems Christmas has come early for you as your landlord is facing a sanction of between 1x and 3x the deposit, so £10,500 in worst case scenario for him.

His so called Business Deposit Scheme is not a legal option he has, to be clear, the ONLY exceptions are Holiday Lets, Lodgers where the Landlord is resident or Housing Associations.

Even if they do not call it a deposit but it effectively acts as a deposit (e.g. Last months rent upfront) it will be treated as a breach.

In Oct 2015 the Deregulation Act made it illegal to do revenge evictions but this does not cover S8 rent arrears, so I would suggest you pay that rent arrears immediately.

Meanwhile call the Council because if he issues an S21 before you have reported the repairs issue to the Local Council then he may have a way to revenge evict you.

You can of course consider additional legal action against him for breach of contract, the tenancy agreement will have his obligations and if you verbally agreed other things would be done and that was why you paid such a high rent.

The size of your rent suggests you might be in an area where Councils require all Landlord to be licensed, so check that on your local Council website.

Now you need to call Council and report the issues which you feel are a matter of health and safety.

You could go to a solicitor or claims company regarding the deposit but they will take 33% of it so I would do it yourself, I can tell you the forms etc that need to be filed.

In the first place you need to write to him to warn him that you intend to take legal action, you have up to six years to take the action from when you became aware it was not protected.

Then you draft a letter regarding the failure to protect the deposit

"Dear Mr Landlord

Re: LETTER BEFORE ACTION

I am writing with regard to my deposit of £3,500 taken in relation to my tenancy agreement with yourself.

I have been made aware that there is a legal requirement for you to have protected my deposit in a Government Approved deposit protection scheme. Namely, DPS, TDS or Mydeposits within 30 days of taking my deposit in accordance with Section 213-215 of the Housing Act. I have also been made aware of a further obligation of you to have provided me with the Prescribed Information in accordance with the The Housing (Tenancy Deposits) (Prescribed Information) Order 2007. Again within 30 days of taking my deposit.

I have checked all three schemes and my deposit has NOT been protected in accordance with the Law which now means you are liable for Sanction by the County Court of between one and three times the deposit.

Your recent communication suggesting that you had protected in your own Business Deposit scheme and that you were not obliged to protect my deposit in an approved scheme is farcical but thank you for the admission that you knew of your obligation but decided not to protect my deposit nonetheless.

I am writing you this letter as a formal notice under Civil Procedure Rules as a Letter Before Action.

I am offering you a chance to settle these sanctions by paying me £10,500 without the additional mutual legal costs of going to Court, these are estimated to be around £3000 for each side if the matter for the first stage of the legal process.

I want to make it clear that you have no defence, the deposits were not protected in time or to date. So if you allow this to go to Court you will only be increasing your own costs in due course.

If I do not hear back from you within 14 days I reserve my right to start legal proceedings against you without further notice.

Yours Sincerely

Chuddy"

Of course if you wanted to be really mean you could wait until the end of your current tenancy and then sign a new tenancy agreement with him, if he does not protect that either you are in for £20k but something tells me he is unlikely to make the same mistake twice.

Note that until he protects the deposit and issues you with the PI he is unable to issue S21 proceedings for no fault eviction but he CAN bring proceedings under S8 if you are more than 2 months late in rent. It always looks bad to owe rent so I suggest you pay him the rent you have withheld and call the Council re the repairs. They will not be too interested in small things but if you mention health and safety, doors not being fire proof, gutter hanging from roof and mould they may come, they must record your complaint and confirm receipt of it, if they do not then chase them before sending the letter above.

410
Guest Avatar
Gavin Burnett 17th October, 2017 @ 21:13

Ok.. Any legal advice would be greatly appreciated.

My ex-LL evicted me in Aug. I was a month late with my rent. it was a shorthold tenancy and I’d been there 3 years.

After I left. The LL billed me for over £6000. When I questioned this. He insisted that I’d paid no deposit or rent for my entire first year in his Property? Complete lies! I owed him 1 month only.

It took time. And lots of raking through boxes. But I managed to find at least half of the rent receipts. Proving that I had paid. Worried that I was going to have to pay a whole years rent again, I contacted Shelter for advice. They told me to check that my LL had secured my deposit with one of the three deposit schemes here in SCOTLAND.

I called them all.. and it hadn’t. I reread my former tenancy agreement, where he clearly stated that my deposit would be held in my deposit Scotland. He’d signed and dated that tenancy agreement with me.

He has now confirmed that he hadn’t protected my money (in writing). But that it’s ok, as it’s been used to clear the months rent that I owed.

Can I also add.. that there was no gas safety check in place for the last year of my tenancy.

I have had some amazing LL’s over the years. But this one was dishonest and intimidating. He did state though (in writing) that I had been a good tenant and had left the property in prestine Condition.

Can I take him to court for not protecting my deposit? Even though I owed a months rent?

411
Guest Avatar
David 18th October, 2017 @ 02:35

@Gavin

I am not an expert in the Scottish law but it essentially mirrors English law in most respects except that is is simpler with less case law and usually greater awards.

The Tenancy Deposit Schemes (Scotland) Regulations 2011

You can indeed take him to Court, you did not say whether you had one 3 year agreement, or whether the tenancy agreement was replaced or renewed or if you just remained in the property after the expiry of the initial tenancy? His liability is for each tenancy depending on dates.

Your arrears have nothing to do with his obligations to protect the deposit, the best he can hope for is to offset his sanction against your arrears but you can argue that matter is not before the Court and if he wishes the Court to render a decision on that matter he should file the appropriate paperwork and pay the Court a fee in accordance with CPR.

The good thing for you is that you have written evidence that he has lied, i.e. by stating that you owe a years rent and you having receipts, this can be used later to discredit him if he makes other false assertions to the Court.

With regard to the lack of Gas Safety, this is very serious and you should report it to your local Council.

It will be useful to mention his failing in written correspondence to him that you will later include in your papers to the Court. It will encourage Judge to award the full 3x deposit sanction.

Did he evict you legally with proper notices and were you evicted by Court or did he evict you by throwing out?

Please clarify and I will draft you a letter to send to your Landlord to refute his assertion that you did not pay your first years rent and give him a letter before action for his deposit protection liability along with an offer of settlement.

I have to say that it is extremely unlikely that a landlord does something like this so I am guessing there is more history to this matter or did he do in in response to you querying the deposit protection first? Landlords do not just assert you did not pay rent, did you pay rent in cash or via bank transfer?

You will not need to take him to Court, you will present your case, suggest he takes legal advice and offer a settlement, if he does not accept it then you give formal notice of intention to start legal proceedings and only then do you have to actually file the forms etc. You need to Act quickly as there are time limitations in Scotland.

412
Guest Avatar
Gavin Burnett 18th October, 2017 @ 09:19

@David

Thanks so much for getting in touch. We moved up here from Kent, 3 yrs ago. After my wife (who was Scottish) received a bad prognosis for her cancer. Understandabley, she wanted to have her parents and siblings close by. So up we came with the kids. (Can I add here, that I was able to move office too.. always worked).

The property we took on was with a short assured tenancy. Initially for 6 months. And it simply rolled on. We never had to sign updates or new ones.

In December of last year, we lost my wife. I was given 3 months/12weeks leave to be there for our kids. Which is nothing to do with my original question. But as I’ve mentioned our reasoning to moved up here - it makes sense to add This also.

In Jan this year, I chased the LL for the Gas Safety Check. As it had run out in Dec. Repeatedly making myself available for the engineers (that LL had said would be coming on a certain day) but they never showed. We were still without that on leaving in August.

In June this year I received a NOTICE TO QUIT. It gave me two months notice to leave. Attached was a section 30. I didn’t want to move, but I knew I had to, so secured property elsewhere. I had a very good ref from the landlord. Despite what was to follow. I’m kinda stuck up here now until my youngest has finished her last year of school, so stayed local.

It was in Septemember (a month after that we moved out) that the ex LL came to our new place to drop some mail off. He also handed me a white envelope for himself. It was bill. I didn’t understand? He was saying that we’d paid no rent for the flat for the first entire year that we were in. But this wasn’t possible.

So it was down to me to prove that we had paid for those months, I was going to have to find old receipts from 2014/2015? Well we did. Not all of them, but enough to prove that he was chancing it. As we found both counter receipts from his bank and hand written ones on scraps of paper. He then tried to say that the bank payments must have been allocated to another of his rental properties by mistake. But that didn’t explain why the hand written ones weren’t in his accounts for our place? As they had my wife’s name printed clearly on them. You see, he’d insisted that if we’d paid, then they’d be in his books. But there was nothing. And that his auditors could verify this.

My next step was to seek advice. So done the usual scrolling on the net and found Shelter. Who were amazing! And put my mind at rest about a few things. They wrote him a strongly worded letter pointing out that as they’d seen the receipts, that his record keeping was highly questionable. But last week, they also asked me about my deposit. I said it had been used for the months rent that I was owing with my full agreement. As I’d had to pay two months to move into another place, I hadn’t the final months for the last place. And an agreement was made. Not a problem. “No, that’s not what I’m asking” the adviser said. She wanted to know if it had been protected? I said that I assumed so, but anything like that, my wife had dealt with at the start of the tenancy. The call ended with them insisting that I checked with the 3 deposit schemes up here. I did so, and the answer was “no” from each of them.
To give the LL the benefit of the doubt.. I then messaged him. I told him that as I’d had to seek legal advice re the monies he was trying to screw me for (obviously worded better at time), that they also advised me to check out the deposit etc. I said there must be a mistake, as it’s not on any record. His answer (in writing) was that no, he hadn’t put it in one of those. But had retained it on my behalf and, as agreed, deducted it from the final months rent owed.
(In our signed tenancy agreement. Page 2, section 6.. he clearly stated that it was to be held with “my deposits Scotland”)

As I’d said before. This is the first bad LL in over 30 years. What he done was completely out of the blue. And I have only learned of the x1/2/3 in the last couple of days, while looking into unpaid deposit schemes!

Unfortunately, shelter could only suggest that I seeker legal help with this matter. So here I am... still on the net, days later, and looking for advice. To be honest. I didn’t care about the deposit. But I did care about him trying to extort thousands of pounds out of me!

In some places I’m seeing 6 years. But it seems that it’s 3 months up here. So I only have a few weeks to act, if I can?

Any advice would help so much. The deposit was only £550, so it’s not that it’s for a huge windfall. But hopefully it will teach him not to screw anyone else over. As they too could come back with the law.

413
Guest Avatar
Gavin Burnett 18th October, 2017 @ 09:34

@David

Just a quick add-on

In reply- We paid our rent over the counter at the LL’s bank. Although, several times he needed it early, so came to the house and was paid in cash. Receipts received (handwritten). His bank was next door to my office, so was never a problem.

And the council were made aware of the gas safety check business by Shelter, last week.

414
Guest Avatar
Gavin Burnett 18th October, 2017 @ 10:50

@David

The postman has just been and the LL is now insisting that I still owe for the months that I couldn’t find receipts for. This is ludicrous! Why should I have to pay again? Purely on his say-so? Surely this can not be legal. I’ve already proven that he was lying. This feels like three steps forwards and two steps back.

415
Guest Avatar
David 18th October, 2017 @ 13:17

@Gavin

I am really sorry for your loss.

To be honest Gas Safety is a red line for me, I feel that any landlord that forgets this should not be allowed to rent property. I would follow up with the Council and ask them what they are going to do about it. For example check he has one now, put him on a list and ban him if he repeat offends or what?

I can write you a letter but I suggest we do it via the forum because you have already put a lot of personal information up.

Use the landlord forum link at the top of this page and once joined send me a private message via this link

bit.ly/davidpip

Based on what you have said he has not got a leg to stand on, you will be able to show the Court that he originally alleged you had paid no rent at all which is preposterous. First of all he would have evicted you using arrears as grounds, second he would hardly refer to you as a good tenant if you had arrears.

You will also be able to show that contrary to his allegations you had indeed paid for the period in question and as Shelter have said his accounting records are questionable. So why would anyone believe him now? I would advise any tenant and landlord NEVER TAKE CASH, it opens you up to all sorts of problems.

I would get in touch with HMRC and just let them know that this landlord took lots of cash payments from you and a professional charity has raised concerns about his record keeping.

Remember these are two separate issues, I would not connect them, for the rent dispute we will simply reply that you refute the allegation and he is welcome to take you to Court where you will vehemently defend this spurious allegation. You will add that as Shelter have confirmed he has questionable record keeping processes and as a Landlord he has been incompetent in the extreme by failing to meet his legal obligations regarding Gas Safety certificates.

He has to pay to play, so let him, his next stage will be a letter before action and you will dispute that, then he has to pay to bring a case.

Then you will issue under separate cover a letter before action regarding the deposit. As far as I am aware the Scottish system had your tenancy automatically renew, I will need to check but I am fairly sure that it will be treated as one tenancy (unlike UK where a new statutory tenancy is created).

You will offer to settle at 3x the deposit thus allowing the Landlord to avoid paying legal fees of both sides.

If he wants to go to Court let him, once the Judge sees what kind of Landlord he is you will get the full 3x and if he tried to ask the Judge to hear the other matter you remind the Judge he has not paid to play.

You must start your claim within 3 months from when you left the property so we will need to move quickly.

I would do the rejection letter first, then give him a week to reply and then regardless of what he does you hit him with the Deposit Protection claim and settlement offer. I usually suggest people settle and be prepared to negotiate but Gas Safety is a red line for me.

I suspect he made this fake claim purely so he could negotiate away your claim, well it has nothing to do with the sanctions and if he wants to pursue it he must bring a legal claim; filing the appropriate paperwork and pay the appropriate fee. If he involves a Solicitor I would be pleased to draft you a letter to them. Sometimes people need to hear things from a 3rd party. I really suspect he is trying to tie you up in knots to make you miss the time limit that Scotland has.

416
Guest Avatar
Milner James 18th October, 2017 @ 14:16

David, this is a great read.

I started an AST with my tenant 2 years ago for a fixed term period of 6 months where I had protected the deposit. The 6 month tenancy lapsed and we had agreed to let the tenancy run on a rolling basis. I have recently served a Section 21 notice as I am planning to move into the property, the defendant has responded and a court date has been arranged. My issue is that although the initial deposit was protected, I failed to re-protect the deposit with the same tenant at the end of the 6 month tenancy period through the MyDeposit website meaning that at the time of issuing Section 21 the deposit remained unprotected - a point picked up in the defence. Is this defendable? I have since protected the deposit

James

417
Guest Avatar
Gavin Burnett 18th October, 2017 @ 14:29

@David

Thanks so very much! I have registered above and attempted to DM. But it’s not accepting the link?

Gavin

418
Guest Avatar
David 18th October, 2017 @ 17:13

@MilnerJames

You are at a critical point, if the start of the tenancy was after October 1st 2015 you are covered by the Deregulation Act 2015.

Specifically it says that as long as you protected the original deposit then there is no need for you to issue a new PI or do a virtual in and out protection of the deposit as we used to have to do. However, this does not protect landlords who did NOT protect the original deposit. After Oct 2018 this will apply to all tenancies.

Essentially it is saying you will not be punished if you were good to begin with.

If your tenancy was before Oct 2015 you may be liable for non protection of deposit of Statutory Period Tenancy created when the tenant remained after the initial tenancy expired.

I am not clear from your wording whether you are saying that You/MyDeposits ended the protection after the six months, usually this is ended by one party asking for the money back, that triggers emails to the other. Of course this does not apply to insurance backed schemes which is why I always suggest they should be avoided. Many times I have seen a Judge say "well the money was always in the scheme so I find it was protected" even though in law they should have followed case law. Some do this when they see a dodgy tenant but it can easily be appealed so not worth it as fees are higher if the case continues.

If you are actually saying you had no protection because you ended say insurance cover then you might as well withdraw your S21 as it will be thrown out anyway and then you have to start the two months again.

You can bring S8 hearing if you want to move back into the property or if mortgage co wants to sell it. S8 works on Grounds covered here

http://www.propertyinvestmentproject.co.uk/blog/section-8-evicting-tenants/

You would do well to engage the tenant, offer a settlement based on them leaving promptly of their own accord, giving you a months notice and getting say a positive reference and £300 as a starting point. They may push back and you might both settle on £500 or 1x the deposit as a last resort.

By negotiating you avoid having to take them to Court again and paying another Court fee.

A Court will consider their failure to accept an offer in considering their costs. You can disrupt things if they have raised the deposit issue and ask that the Court not rule on the sanction if they have not paid a fee but you are only kicking it down the road.

A word to the wise, create your tenancies as Contractual Periodic Tenancies, that means that rather than expiring after after the initial period the tenancy agreement states that it after six months it runs from month to month until either party terminates it (tenant with one month landlord with two months). This way the original agreement is always in force and the worst you face is one set of sanctions, of course protecting the deposit should be part of your tenant signup process.

This also is good advice for Landlords using agents as you will not face the double charge of the agent stitching up both landlord and tenant for a renewal.

Is your tenant vulnerable and seeking social housing?

I ask because it will affect their being prepared to negotiate, they can't make themselves homeless by agreeing to leave, in which case you are forced to use S8 or S21. S8 probably better.

419
Guest Avatar
Natalie 18th October, 2017 @ 23:02

It's amazing, the amount of help and time you put in here David!
Great read.

My case is probably straightforward but I can't find the answers I'm after. I wonder if you could share your opinion please?

Myself am a single mother running small corporate landlord company. Basically guaranteed rent for landlords . It is very small, got only few houses , as I became pregnant couple of years ago and that's when everything started to be difficult for me.
Not going more into details of my private story.. One of the tenants hired solicitors to claim 3x deposit since I failed to protect it and serve PI.
So here my private life interfered and I simply was overwhelmed with everything and didn't organise myself to protect it. I did transfer money to the scheme 4 months later but never assigned it to the tenant and when the scheme asked to taken it back i said I'll leave it until I need to protect another deposit. And i never did.
Ok so I know already that there is no mercy and I need to pay.
My question is how to negotiate before going to the court to lower the amount? ( I could count on mercy of the former tenant(single mum, the amount is my annual profit etc) but was asked by their solicitor to not contact).
How long after the tenancy end they can claim the compensation? Entire life??

My other problem is that there was 4 more tenants at this property and they surely stay in contact until now. I dread they will all ask for compensation at some point in my life! If they already didn't , my post is delivered to the registered office that is not valid any longer. This is another thing I need to take care of.
I'm considering leaving this occupation (if the penalties won't make it happen before I decide) since I clearly don't organise myself enough with a little baby and the company .

I would be grateful for any advice. Thank you

420
Guest Avatar
David 18th October, 2017 @ 23:54

@Natalie

The first difficulty you have is that you have been informed the person is now represented and asked to direct all communications via them. It is standard practice for them to put that paragraph and they might mention that you did not follow CPR if they found out but as a novice you are not to know CPR. I have advised people on here and they have of their own accord been in direct contact and reached a settlement, usually offering a positive reference as part of the settlement.

One way around it might be if you had a family member who contacted the tenant saying you had some mental health issues brought on by stress and would they consider a settlement. The claim firm are not stupid, they protect themselves by making the tenant liable for their fees if they do not see the claim through. Some are terrible in this regard others seem to accept that something is better than nothing and are happy as long as they get their cut.

They have 6 years from becoming aware to make a claim and they have made that claim, if they get a CCJ they then have 6 years to enforce that or escalate it to a higher court for additional fees.

Of course there is nothing to stop you negotiating with the claim company but they are on the clock with the meter running, some will never settle and are in my opinion complete scumbags.

Re-reading your post I am not clear whether you were the agent or the landlord, if you did not own the property or have a sub lease, you sound like an agent to me.

The Landlord is the person liable for the breach, the agent can be sued by the landlord for their losses but you could just write and say that you were not the landlord. Of course if you put your name in as the Landlord on the agreement and it was not true then that adds further complications. They are mostly moot now as tenancy is over. The landlord must be listed on a tenancy agreement or it in itself can make the PI invalid. So an automatic breach occurs and if this were a matter of eviction an S21 can be rejected on basis of invalid PI.

If you had a limited company as the agency then it is the limited company that has the liability to the Landlord and you could wind the company up.

Yes there is always the risk from the other tenants coming out of the woodwork when free money is on offer.

The site owner has created another page on negotiating here that you may find of interest:

http://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

So to recap, if you were agent you can respond that you were not the landlord and they need to address any claim to the Landlord. They usually do a land registry search and include it in evidence if a case is not settled, so if you reject the assertion that you are liable they will do a Land Registry search.

If you were a limited company rather than a sole trader then the liability dies with the company as you can't sue an entity that no longer exists, you could wait, let them go to the trouble of getting the judgement and then close the company but best to do it immediately if you are overfaced by baby, it really is very hard to juggle but that does not change the law.

If you still have income from the company you could sell it to a new (unrelated) company and transfer all the leases. Hell you could trawl all agents site and find an agent to sell your customer list to and wind up the company.

Do not risk quoting anything on this forum that might identify you, they may see it.

The fact that the deposit was not in their name means that the 4 month protection is invalid, you do at least have the money in the scheme to use.

If these four other tenants were renting at same time it can make the property an HMO and expose you/landlord/agent company to additional liabilities.

The only way to run such a business is to have processes, processes and processes, as an agent there are professional organisations that would have helped you in this.

421
Guest Avatar
Natalie 18th October, 2017 @ 23:57

@David
Just reading the other post you recommended for negotiations with a tenant.
I want to add that the tenant signed a short, simple inventory and I deducted some little money of their deposit based on this inventory and a check out inspection. There was no check in performed. They found a charge unfair and said they shouldn't be liable but agreed at the end. So I guess that's what made them to get back on me.
I didn't register the deposit even when they asked for a reference number at the end of their tenancy, thinking that if at dispute arises, I'll register it then.
Don't ask me why I've been such an ignorant all this time. I guess we all think things won't happen to us until they do.

Also , I'll be negotiating with their solicitors! Should I spend hefty sums and hire one too for negotiations?

422
Guest Avatar
Natalie 19th October, 2017 @ 00:00

@David

Sorry, posted my precious comment not realising you posted back already. I'm just going through it now.
I might leave the answer til tomorrow considering the hour.
Thank you so far David!

423
Guest Avatar
Natalie 19th October, 2017 @ 00:07

@David:
I'm not an agent but I sublease with consent of the landlord.My company is stated as a landlord on the ast.
I've got the tenancy agreement with 2 landlords in place , I don't think I could simply close the company just like this. I would need to speak to the solicitor regarding.
I guess I should have had a solicitor involved since the beginning of my company, it would save me a lot of mistakes.

424
Guest Avatar
David 19th October, 2017 @ 09:30

@Natalie

Yes, I have said it time and time again; Tenants will generally come after you for deposit protection in response to you screwing them.

If there was no check in inventory then you have no basis to touch their deposit.

With respect you sound like the exact reason this legislation was created, because you mistakenly think that the deposit is a fund for you to dip into, it is not.

A deposit is for performance against contract, it can never be used for wear and tear nor as a redecorating fund. In brief, it is there in case a tenant has arrears or damages a property. Many Landlords write onerous contracts thinking this will enable them to tap into the deposit, WRONG, because they go against common law and so are automatically unfair contract terms.

You came into this business offering a service to Landlords but you are not even getting the basics right.

I say this simply to encourage you to improve or get out, seek qualifications and then come back.

Personally I think Letting Agents are dead, in my experience 99% are useless, add no value and rip of both landlord and tenant alike.

Now we have online agents who will disrupt that market in the same way that Uber has the Hackney Black Cabs.

Running a letting agency is not difficult, there are processes and if you are organised it is an easy business. If you do not know the law, do not know the Landlords obligations (which are all covered on this site BTW) then you can hardly market yourself to a Landlord as a professional. The Housing act is very strict, you may be over occupying, you may be failing fire regulations, you may need to be licensed as as a Landlord, you may be creating HMO's all of which have further regulation.

If you read back the comments going back through the years you will see many a Landlord stung by agents who did not take deposit.

As far as I am concerned you are really an agent, I would need to see the sublease but it may still incur liabilities for the actual landlord. Yes of course you should have spoken to a Solicitor at the beginning, who created these subleases? They may be illegally constructed.

Everybody learns from mistakes but I think you need to seriously consider shutting down this business, you may find it is done for you by Court Order and you may be banned from being a company director of any business.

You have two options, settle early for the best you can get in the knowledge that you are likely to have other claims or shut down the company.

If your contract was properly constructed it should have rights of assignment to another company or sub-lease should be dissolved in the event of liquidation of your company.

You have been putting your head in the sand with your "I guess we all think things won't happen to us until they do." approach. You need to face things head on or if you can't take the heat get out of the kitchen.

I am sorry to sound harsh but I think you need a dose of reality for your own sake.

425
Guest Avatar
Milner James 19th October, 2017 @ 11:22

Hello Dave,

Many thanks for taking the time out to reply.

I agreed with my tenant an AST for a 6 month period in November 2015, for which I protected the deposit. At the end of the 6 month period, the tenancy was assumed to be on a rolling basis. Fast forward a year and a half and I have issued a Section 21 notice to my tenant and received details of a court hearing date. When checking the My Deposit website I've noticed the deposit is unprotected. What I should have done is re-protected the deposit at the end of the initial AST, as the rolling tenancy understanding was assumed to be a new tenancy. Neither myself nor My Deposit 'cancelled' the deposit protection, rather I failed to re-protect. With this information I have been strongly advised to withdraw my application from the court hearing date as the Section 21 will be rendered invalid as the deposit was not protected at the time of issuing the Section 21. I am certain that if I do go ahead, not only will I not get possession but I will be liable to pay a fine of up to x3 the deposit value.

I have read about Section 8, however I am unclear on timescales. Whereas Section 21 you have to give 2 months notice, I have read somewhere that Section 8 requires between 2 weeks and 2 months notice, though I am unsure what this is dependent on? I predict my tenants will not leave on the date of expiry of the Section 8. How long does it typically take from when I submit the court forms (Forms N5 and N119) to an actual court hearing date? Can the court order possession at this stage, or are there further obstacles? I am planning on submitting Section 8 on grounds 8, 10 & 11. I can demonstrate through a spreadsheet and bank transfers that the tenant is in arrears by at least 2 months. What further proof will a court judge look at re: failure to pay? I have not emailed the tenant chasing rent payment for about 2 - 3 months now as in their last email they have made it quite clear that they do not have the money to pay the arrears.

I will of course try to engage them with a Mediator, however I am not too hopeful of a successful outcome. They have indicated to us that they do not wish to meet so they probably won't welcome a Mediator. The tenants have been removed from the housing register as the council are aware that they are in arrears by 2 months. We are in receipt of direct housing benefit payment from the council, interestingly they never declared they were ever in receipt of benefit to us. They've also said they are unable to come up with money to pay a deposit for private let.

At the end of all this I genuinely just want to move into the property.

Thank you

426
Guest Avatar
David 19th October, 2017 @ 14:26

Hi MilnerJames

It seems to be pretty much as I predicted, I am surprised that MyDeposits require you to renew your protection, I am guessing it was an Insurance backed scheme rather than Custodial.

The simple fact is that without continuous protection you are liable for the sanctions, you can of course plead mitigation. You can show that you did protect the original deposit but as a novice Landlord you did not realise the scheme did not mirror the tenancy created in statute. It would be helpful if you had a letter from MyDeposits saying that they did not send reminders of your obligation.

You need to put yourself in the position of the tenant and figure out what you can do for them that would encourage their co-operation. They probably can't afford to move as rents have increased, they are on benefits which means it is practically impossible for them to get a tenancy. If they are not vulnerable they have no access to social housing or even temporary accommodation.

You need to find out whether if they did not have the arrears they would be entitled to temporary accomodation, perhaps due to mental health issues or because of some undeclared (to you) vulnerability. They may have a mental condition such as Autism, Schizophrenia or anything else from DSM-V that puts an obligation to the local authority to assess them for 6 weeks (putting them in temporary accomodation). They may also be classed as vulnerable if they have injuries, are on disability benefits, are ex-military with a condition like PTSD, are a drug addict or an alcoholic, for the latter two they have to be in engagement with a programme to get them straight.

They will have been advised by the Council to go after you for the deposit, it is standard practice because it sometimes gives the tenant enough for a deposit elsewhere.

Now you need to look in your area for a homeless charity, I do not mean the big ones like Shelter, I mean the ones that provide a walk in session, a shower, washing of clothes and advice to homeless people. Just ask your local council who they refer people to who they do not have an obligation to.

These charities will have a list of Landlords who are prepared to take on such tenants, to be honest they exploit the tenants and grab most of their benefits by putting them in one room for the maximum LHA allowance in the area. They get their rent paid direct and the places they rent are between basic and dire, but they are better than the street.

They will work with the "No 2nd night" teams who have to come find you sleeping rough to get homeless people a place in a hostel. It is called no 2nd night but in some areas they only go out one or two days a week so it can be longer.

They also also work with other charities, for example for ex-services personnel to get accommodation. There are also places where a tenant can sleep in a building as a caretaker, effectively preventing squatters and others from taking over the building.

Your tenant does not know "the system" or any of these options, so they cling on to what they have, your nice warm flat. You have to show them that there is a way for them to avoid being on the street.

So armed with information you then have to help your tenant help themselves. First of all you need to engage them, I get why they will not answer you but you need to try to get them to engage, send them a text like the one below or else involve a mediator (someone from your local charity).

"Hi Jimmy, I understand why you are avoiding my calls, but I am reaching out to you because I genuinely want to help you. You will have been advised that it is only a matter of time before you will be evicted, I WANT TO AVOID THAT. The fact is that you DO have options and I may be able to help you become eligible for those options, but to do so I need to understand more about you.

As a gesture of good will I am going to cancel my possession proceedings , I will then have a choice, spend money on a harsher possession procedure or spend the same money helping you. I would rather help you, that means us having a chat so we can find a way forward. If you would rather not meet at the flat I am open to meeting you at a local cafe or pub, I am also prepared to work with a mediator, I have identified a local charity who may be prepared to work with us.

Jimmy, believe me when I say that the very last thing I want to do is put someone on the street, but if you do not engage with me I will be forced to take the legal route. So please, give me a call and let's get you the help you need. All the best, James."

If he will not engage after that you can ask the Charity to try to reach out. If they or you find he has a mental health condition then there are charities for those conditions who will help him, they may provide letters that remind the Local Authority of their obligations, some even signpost people to Solicitors who specialise in these types of cases.

So what help can you provide?

Well if can be classed as vulnerable but is being rejected because he has intentionally made himself homeless by going into arrears then you can come to an agreement on those arrears. The Council will require that the arrears are settled in full before they take him on. So if his arrears are not too bad you could decide to offset them against his sanctions by reaching a settlement agreement, essentially you pay him the arrears amount as a settlement of the sanction and he pays it right back to you to settle the arrears. You then protect the deposit, start the S21 or S8 over again and he gets evicted (a requirement for the local authority) however, he agrees not to contest the possession but uses the new possession notice to attempt to get housing. The fly in the ointment may be that your rent is higher than the LHA allowance that you are paid, in which case you agree to lower the rent so that no new arrears are incurred in the 2 months it will take to gain possession.

If he is not vulnerable then he has to engage with those charities, this means he has to go to their sessions and see the staff there, they have a lot of people to help and if you are not on their radar every session they will assume others are a higher priority. He may have to accept some grotty bedsit as a stepping stone to something better, to be honest he will be lucky to be offered one.

With regard to S8 or S21, they are pretty similar, all possession methods have 2 months notice, what varies is

the time to get a hearing,
the time the Court gives before eviction is allowed
The time it takes to enforce the eviction with Bailiffs

With S8 it may take longer to get a hearing because S21 is an accelerated procedure but they can give just 14 days from the Court decision and may not allow more than 42 days.

County Court bailiffs are slow, and if you want to be really harsh you can escalate the judgement to the high court, it costs more but I am sure you have seen the results on TV, note that they are only about the possession not the debt, that needs to be handled separately and under different rules. They may make it look easy on TV but for debt they can only exploit what you care about, a car or your possessions, if you do not have a car worth the cost of transport and auction fees it is not worth their while and if they do not let the HEO in then they will give up after a certain number of attempts.

I should point out that Councils were advised by Government to consider the expiry of an S21 as the date their obligations started, however, a few a resisting this and the Government will be changing the law to compel all Councils to take on everybody for 6 weeks assessment and tying up the loophole they are using to avoid they obligations. You will need to enquire with your local Council or your local Charity what your Council are like, do they accept that the S21 is the start of a possession proceeding and the person is effectively homeless on the expiry date. The Council that do not accept this date are total scumbags because they require you to hire bailiffs to evict the tenant and that adds to the costs to the tenant.

Some local Councils have accommodating that is intended for certain people, over 50's, under 25's, single mothers, pregnant teenagers, elderly, etc. There may be a place in such a development sitting empty, but your tenant may not have access to it because they can't get on the list because of the arrears.

So what else can you do for your tenant, well as part of that settlement you can write a positive reference for them, you can agree to refund their deposit then offset that to the arrears. Hell you can even help them try to find a new place or you can take them to that charity rather than just signpost them.

What you have to realise is that there is a weird relationship between Landlord and tenant, you are not friends, but if you show a genuine willingness to help (without being a sucker) you can get them to cooperate. Bear in mind they may be in denial because they are going through the bereavement process, you have to give them hope so they get to acceptance quicker.

I know they are not your problem but you want your property back, you have to show the tenant that they have a choice, work with you for the best possible outcome or force you to take harsh legal action that will leave them on the street in debt for years and homeless with no access to social housing.

As I said in my previous message you might as well cancel the proceedings because it is unlikely you will get a possession order, technically you might extend the protection and try to argue that court date is the beginning of the possession proceedings, they should of course argue that it is the serving of the S21 that is the start of the possession proceedings and it is an accelerated procedure. You would present that as "The tenancy started in November 2015, the deposit was protected in an approved scheme, a S21 was issued and the defendant issued a defence of their being no protection at which point you contacted MyDeposits and they verified that although neither you or they terminated the deposit protection it had expired, so you renewed it in time for the start of the proceedings". This is a bluff, it requires a savvy authoritative Barrister to deliver it with credibility, an ill informed District Judge and usually an unrepresented Tenant. The risk is they may be advised to appeal the decision and if they are on benefits they will not have to pay to launch that appeal. Some landlords figure they have paid and they may as well have a go, some tenants will just leave if they lose the case.

The downside of leaving the case running is you shoot yourself in the foot by removing negotiation options and you just delay the tenant leaving because you will only have to start again with S8 or S21 if you lose. With S8 you have 2 grounds with S21 it is no fault, just the 2 month notice and having the right paperwork in place, that means you need to protect the deposit, issue PI (which you will need to do in several ways to avoid him denying service), make sure that there is an EPC and a Gas Safety certificate in place. I am assuming that there are no repairs that you were asked to carry out and that you did not issue the S21 as a revenge, I only mention this because if he had reported such repairs to the Council he could try to get S21 thrown out on that basis.

As I said you are liable for the sanction come what may, so you might as well use it, either negotiate it away or go to Court with S8 and get it offset against arrears if he will not engage with you. The danger of going for Ground 8 (11&12) is they only have to pay enough to get the rent a week under the 2 months for G8 to be invalid, keep it there but do not rely on it as your only mandatory ground. You will need to show the hardship caused to you is as bad as to him (more if you are a couple), if you can show that you are effectively homeless and sofa surfing it is the same. Also point out that he will end up homeless anyway because he has failed to pay rent and it is all his own fault.

Remember that G1 to G8 are mandatory, the rest are discretionary. This means that if the Court find the ground to be true they must grant possession while with the discretionary you are in the lap of the Gods.

As far as payments go you want to show a simple statement of dates when rent became due along with dates when payments were made, including those from the Council. Lay it out like a bank statement with Date, Credits, Debit, balance and comment. Then back it up with actual bank statements (these may be redacted to only show the pertinent payments.

The email where they say they do not have the money to clear the arrears should be included in your pack.

As I say time and time again it is always better to settle, you are in a position where you have a carrot to offer and the threat of a stick, use the suggestions above, show good will, get the guy to acceptance and help him to move on.

427
Guest Avatar
Natalie 19th October, 2017 @ 14:57

@David

It does sound a bit harsh.
I should probably consider closing the business or hiring someone, as it is difficult to juggle 2 full time jobs on my own.
Though I really do not qualify as a greedy agent or rough landlord. I try my best to be personal with my tenants and meet their needs.

When someone is ruining the place that I will have to pay for at the end, I do want the money back though. As any landlord would do.
I didn't perform the check in inspection in person for the reasons mentioned above but they did sign the check in inventory and as such agreed to the state and content of the property. There was a damage to the property at the end of the tenancy and I took mere £40 for it. The tenant agreed that I had right to do that and they were happy with me throughout the tenancy. So maybe at the end I'm not such a bad landlord.

I did prepare my business properly when I started. The things went difficult when I had a child and became a single mum.
Thank you for your opinion anyway .

428
Guest Avatar
David 19th October, 2017 @ 18:09

@Natalie

Yep, sorry to be harsh but I find it better to be straight with people. It is also for the benefit of readers and to be honest when you do not do things properly in accordance with the law of the land you make others look bad, whether they be agent, landlord or something in between.

It is perfectly fine to find this too much while juggling your life as a single mum, you child obviously comes first. Finding someone to run it will merely add to your costs and if you only have a few properties then their salary would eat any profit.

Also that option would not remove the liability.

I do worry that you do not take this and other legislation seriously enough, but you can learn the hard way.

One thing you need to understand about the Landlord Tenant relationship is that there is an unequal power. A landlord can not only take the tenants home but affect their ability to rent elsewhere. For the sake of £40 you are now facing huge penalties. Of course you could have avoided the liability if you had protected the deposit, you could also have charged them for the damage if you had done a proper inventory. Without it, they can just say that was there when they moved in and you can't prove otherwise.

I wish you luck with your future, hopefully you will learn from these mistakes and become more professional. Bear in mind that mistakes are how we learn. You could have been facing so much more. I suggest that you protect the deposits of your other tenants and make sure you are complying with all other Housing Act regulations.

429
Guest Avatar
Natalie 19th October, 2017 @ 21:59

@David

Ok so your advice for me as for a kind of "bad" landlord is to close the business since I can't perform such a simple thing as registering the deposit and pay what I clearly deserved for and for all other "good" landlords who "forgot" to register deposit you have plenty of ideas and solutions?
I've been reading all the posts and found your advice very helpful. Thanks to you I found a hope in negotiations of the amount, but you wouldn't give me that advice, as you seem to see me as a greedy landlord who did not protect the deposit to gain something of it(the money was not even on my 0% interest account for half of this time but at the TDS account).

430
Guest Avatar
Natalie 19th October, 2017 @ 22:02

I only would like to know now if I can start the negotiations on my own with the tenant directly or would I break any law by doing this. From this forum I gather negotiating with the tenant's solicitors would not be successful by default.

431
Guest Avatar
David 20th October, 2017 @ 10:22

@Natalie

I gave you my suggestions but you seem to want me to rub your face in the shit by justifying my post.

I answered your query about whether you can start negotiations with the tenant in my reply in post 421, please read the first 2 paragraphs. Here they are again:

"The first difficulty you have is that you have been informed the person is now represented and asked to direct all communications via them. It is standard practice for them to put that paragraph and they might mention that you did not follow CPR if they found out but as a novice you are not to know CPR. I have advised people on here and they have of their own accord been in direct contact and reached a settlement, usually offering a positive reference as part of the settlement.

One way around it might be if you had a family member who contacted the tenant saying you had some mental health issues brought on by stress and would they consider a settlement. The claim firm are not stupid, they protect themselves by making the tenant liable for their fees if they do not see the claim through. Some are terrible in this regard others seem to accept that something is better than nothing and are happy as long as they get their cut."

I am always sympathetic to all who have a problem, some are ignorant of the law, for a novice landlord this may be understandable but ignorance is no defence, just mitigation.

Others Landlords make mistakes, they have a genuine reason, they may have had family matters that consumed their lives, such as a parent with Cancer or a sick child. Again, no defence just mitigation.

Then we come to you, on first sight you potentially have both of the above but you hold yourself out to be some sort of professional to Landlords, being a professional means you are expected to make sure you take care of everything, especially legal matters.

I have found your attitude cavalier at at very least if not totally incompetent.

I know single mothers who are project managers, they run huge projects and they are mega organised.

I tried to explain to you what routes you might take to improve yourself, educate yourself on regulations, define the processes that are required for each property, implement the systems to manage those processes, join a professional agency organisation such as ARLA.

Your problem is by your own admission you are disorganised, you do not seem to take the law seriously or the fact that you could be banned from holding a directorship or running any company.

Now based on the fact that you only have an income of the difference of what you pay the owner of the properties and what you are able to get in rent, plus the fact that you said you only have a few properties I suspect that your company is technically insolvent. What do I mean by that, I mean that you probably do not take a proper salary, so your company cannot really afford the cost of running itself.

As such it can't afford a legal judgement which can be enforced against the assets (these properties).

So I suggested you assign the properties to an unrelated company and shut the company down.

My experience of people with cavalier attitude to their legal responsibilities suggests that you may not sorting out your tax obligations either, so that too will come back and bite you in the arse one day. I say this as a warning.

Do not take this too personally, we all make mistakes and they are how we learn. There are different kinds of people, some are very organised, some can manage multiple projects some can manage only one. Your baby may be all you can manage right now, newborns need constant attention and even a lot of attention till they enter pre-school.

As I said I know single mothers who are incredibly organised, they have to be, they create time for themselves by getting childcare. It is not ideal but it is where they are so what can they do.

We all have to accept our limitations, some people are no good with computers but they have other skills. I know a guy at a merchant bank who cannot do anything on a PC not even write in MS Word, but the bank pays him millions. All the analysts go to him through the day and he has an assistant who earns £80k for organising him (she basically does 90% of his job). He knows his limitations but he also knows what he is great at as do the bank hence they pay him very well.

Now if you think I am being unfair please understand I am only trying to help you and my comments were based on what you said, here is a summary:

"It is very small, got only few houses"

"simply was overwhelmed with everything and didn't organise myself to protect it."

"I did transfer money to the scheme 4 months later but never assigned it to the tenant"

"when the scheme asked to taken it back i said I'll leave it until I need to protect another deposit".

"And I never did."

"my post is delivered to the registered office that is not valid any longer. This is another thing I need to take care of."

"My other problem is that there was 4 more tenants at this property and they surely stay in contact until now. I dread they will all ask for compensation at some point in my life!"

"I'm considering leaving this occupation (if the penalties won't make it happen before I decide) since I clearly don't organise myself enough with a little baby and the company ."

"There was no check in performed. They found a charge unfair and said they shouldn't be liable but agreed at the end. So I guess that's what made them to get back on me."

"I didn't register the deposit even when they asked for a reference number at the end of their tenancy"

"thinking that if at dispute arises, I'll register it then."

"Don't ask me why I've been such an ignorant all this time. I guess we all think things won't happen to us until they do."

"I guess I should have had a solicitor involved since the beginning of my company, it would save me a lot of mistakes."

For me your most telling comment is

"I can't find the answers I'm after."

Do you want me to tell you something you want to hear or lay out your realistic options, explain what you need to do to protect yourself and actually help you?

Finally, I suggest you re-read my suggestions and speak to your own Solicitor, then decide your way forward.

I am sorry if I have offended you, I try to help people, sometimes people can't move forward because they are in their own way.

432
Guest Avatar
mr.spacemaker 20th October, 2017 @ 14:21

@David

quick question - would you advise people to do 6 month contracts (rather than the popular annual ones), so that they can issue section 21 sooner if things go wrong?

i got distracted triple checking that my new tenancy agreement/inventory/gas safety etc. was rock solid and didn't even consider this aspect of it and may be about to learn another very expensive lesson as tenant has defaulted after making just one rental payment :-(

my initial instinct was to issue section 21 notice as a precautionary measure but not much point if I can't proceed for 10 months anyway.

any other advice in this situation?

433
Guest Avatar
mr.spacemaker 20th October, 2017 @ 14:37

@natalie

unfortunately for you the law is very clear on these things and in your case there is a clear breach.
also, from a business point of view you obviously should have researched beforehand and kept up to date with regulations. i imagine that the fact you were running it as a business would prevent you from getting much mercy on the mitigation front so you have to assume that in court you would get the full 3x sanction.

the most expensive thing in all of this will be the legal fees though, and it's in the tenant's solicitors' interest to drag this out as long as possible so the very best thing you can do is end this ASAP. as horrible and unfair as it sounds, the cheapest way out of this is to offer the full amount they are asking for, so that the solicitor can't drag it out any longer. you may be able to go to the tenant and offer less than this but it may backfire as she probably has an unfair contract in place with the solicitors.

in your case i would try offering the full 3x, but not including the solicitor's fees, but i suspect you will have to suck it up and pay them too. this will still be MUCH cheaper than instructing your own solicitor and trying to fight it.

good luck, hope it doesn't get any worse.

434

Please leave a comment...

Nobody

Nobody

Landlord

Landlord

Tenant

Tenant

Agent

Agent

Legal

Legal

Buyer

Buyer

Developer

Developer

Enthusiast

Enthusiast


Popular Landlord Categories