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!

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268 Comments- join the conversation...

Showing 218 - 268 comments (out of 268)
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David 13th September, 2016 @ 20:55

Hey @Bob

DPS are right, I have seen a dozen such cases thrown out

Look at wording of S214 The key words for you are

"is satisfied" and "as it thinks fit"

If the amount is a small percentage and you can show good reason, (e.g. you have another flat with a similar deposit amount, or same flat previously had that amount or it was just recorded wrongly), then the Judge will just say

"I am satisfied that the deposit was protected and I do not see fit to issue sanctions in this case"

It does depend on the judge but you have already refunded difference which shows good intent.

I tell people over and over that it is the difference of expectation between tenant and landlord that makes it get legal and then their behaviour subsequently.

So a landlord reasonably expects a tenant to keep a property in good condition with fair wear and tear.

A tenant expects their deposit back.

The line for me is when a Landlord expects a tenant to pay for what I consider to be a cost of doing business, redecoration, carpet cleaning etc. Basically things a landlord benefits from with a new tenant.

The line as far as tenant behaviour is concerned is when they breach explicit reasonable terms like no dogs, or have a cat that tears the carpet. Breaking structural things and generally causing damage rather than wear and tear.

I would drop him a line saying something like,

"Dear Mr Smith

I am in receipt of your letter requesting compensation for a small portion of your deposit not being protected due to an admin error.

It is obvious to me and will be to any Court that you are only doing this to offset the charges that we will be seeking because of your damaging our property.

We have refunded you the difference and the Court will see that we have complied with the requirements of the act albeit with a small error.

You were notified of the deposit being protected two years ago (including the amount) and had you raised a query at the time we would have corrected it immediately.

If you wish to waste the Courts time with this frivolous claim that has no merit then expect it to be vehemently defended.

Meanwhile we will be pursuing our claim against you for the damage you have caused, you are welcome to use the DPS to register why you think the deposit should not have deductions.

Needless to say, please do not give our name as a reference to future landlords."

I do not think even the no win no fee people would take this on.

Feel free to post back if the tenant says any more.

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Chris 17th October, 2016 @ 12:22

Hi David,
We are pretty new to being landlords. We have had a few issues with our tenant and decided that we would like them to move out. The assured tenancy agreement has expired. They are not willing to move out so have started to look at options. This is where I realised our mistake, we haven't put their deposit in a protection scheme. This was an oversight / naivety on our part and not done intentionally although I realise that wouldn't stand up.
We want to get things done properly now though. If we were to give them a new 6 months assured tenancy agreement and then put the deposit in a scheme would that work? So if we have any further issues we could use section 21 once the new agreement has expired?
Any advice would be appreciated.
Chris

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Ros 18th October, 2016 @ 20:18

Hi. We have sent a letter before action to our LA. This is because our landlord lives partly in the uk and partly abroad. Our deposit was protected 11 months into a 24 month term and PI sent then. The LA has said "as you have not suffered a loss".... what would you consider fair compensation", what do you suggest we do? The landlord didnt provide safety certs for boiler or oven (oil and gas). Are the LA in anyway responsible? Should they have insured they were in place at start of tenancy. Just wondering what to ask for. Any help gratefully received.

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David 18th October, 2016 @ 20:56

Hi Chris

In my experience it is all going to depend on the kind of tenant they are and what your relationship has been like.

You do not say what the issues were so is hard to guage likely outcome, are they agressive or vexatious? Have you been hard yourself?

How did you tell them that you wanted to end the tenancy, you say they did not want to go but what exactly was said? I mean were they suggesting they had some right to stay or did they just want to see if they could get Council to house them.

I can tell you if they go to Shelter or their Local Council the first thing they will be asked is whether the deposit was protected and whether you served the prescribed information. At that point they become informed.

So you have to assume the worst, which is that you are at risk of a sanction of 3x the deposit.

Now if this is your only property and the tenant does not have a catalogue of harassment then you might get away with a 1x sanction, but it could be 2x because it stands to reason you failed the PI too (can't have a PI if deposit was not protected.

So you should be prepared to lose that 1x

With some tenants offering another 6 months will be appreciated but with others it is just an excuse to let the property go, maybe not pay rent or even trash the place.

You can't serve an S21 UNTIL you have protected the deposit AND served him with the paperwork.

So you have two routes, if the person seems a decent sort of person you say you want to end the tenancy amicably and are willing to discuss helping them. You protect the deposit, give them the deposit paperwork, the how to rent doc, the PI, the gas safety certificate and the energy form as if it was a new tenancy. You say that the 2015 deregulation act says you have to give them these things. It is important that they sign a receipt for them. You then say "look I know it can be difficult having to move but I am prepared to do what I can to help you; if you need time to find another place I may be prepared to let you stay another six months, on the other hand if you want to go in the statutory 2 months I can offer you a good reference, your full deposit back and a months rent, if we can reach an agreement.

Now if they know about their rights they may say something at this point about being entitled to 3x the deposit, at which point you say "I am aware of that but it is actually UP TO 3x the deposit, the Judge can award 1x and I gather that some Judges just let it slide. I am prepared to offer you the months rent and your full deposit back, you do not need to fight for this and you get a decent reference which is critical in todays rental market. I will also not require you to clean the carpets upon exit which you are contracted to do under the tenancy agreement.

On the other hand if you want to continue to rent for 6 more months, then you just get the full deposit and the reference. It is up to you."

Now you go there with two settlement agreements and two section 21 notices, one for 2 months and one for 6 months.

Giving the tenant the alternative means that they may choose one or the other rather than fight.

If they do not want to agree you say "that is fine, then I need to give you this S21 notice, it gives you the 2 months statutory notice starting tomorrow and you give them the appropriate S21 notice with 2 months notice.

You put together the settlement agreements to list the two options above and you also include a provision to say "this agreement is in full and final settlement of any sanctions of the Housing Act 2004" put it one before the end.

The tenant is in a statutory period tenancy, the terms of the previous tenancy agreement still apply as long as they are not unfair terms (see OFT356).

Now the other route is for people who are vexatious, you pretty much do the same but if they decline and you know they are trouble you add that you will be asking the DPS to withold part of the deposit to make repairs or whatever they have done that might warrant a deduction (if there is one).

Remember these are first volleys, the idea is NOT to go to Court, but to reach a settlement. If you make an offer of settlement and the Court thinks it is reasonable they are going to give them less because they are wasting the Courts time.

If they do not sign you and you have served the S21, you can contact them in a week and ask they if they are OK. The trick is to keep it friendly, keep it personal, call rather than email, you lose all intonation in email.

Chances are they will come back with some kind of demand or threat if they have been given advice.

Do you know if they are likely to be considered vulnerable by the Local Authority? If the Council has a duty to house them they will call you and ask if you are prepared to let them stay longer. You can then use them to encourage the temant to agree to the 6 month stay but you also make the Council a party to the agreement, saying that you will give the six month extention on condition that they agree to house the tenant in temporary accomodation at the end of that 6 month section 21 expiry and not force you to evict the tenant, get bailiffs etc. Remind them that this is Guidance from the Government and you reserve you right to recover costs if things get messy.

You can of course offer more or even the full 3 month sanction but if you have been a decent Landlord (in the opinion of the tenant), then the Judge will probably go softly on you.

If you are known to the Council, have failed to carry out repairs, entered the property without tenant's agreement, changes locks, or any other nasty stuff, then just pay the full 3x deposit to save yourself legal costs.

Hope this helps!

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David 18th October, 2016 @ 22:03

Hi Ros

When you say LA I am assuming you mean Landlord not Local Authority who are not liable as far as I can see from what you have said (you use full word of Landlord elsewhere).

You can remind your Landlord that it is not a matter of suffering a loss and it is not compensation. It is in fact a Sanction under S214 of the Housing Act for them breaking the Law by not protecting the desposit.

A gas Safety certificate is required, if it not about whether Boiler or oven. Other laws apply with oil fired kit, see this link

http://www.thehealthandsafetyconsultancy.co.uk/guides/oil-firedboilers.asp

There IS an obligation under dereg act 2015 to have carbon monoxide detectors in rooms where oil fired kit is

https://www.gov.uk/government/publications/smoke-and-carbon-monoxide-alarms-explanatory-booklet-for-landlords

You obviously hope to get 3x and they hope to get 1x sanction, so have them make the first offer. You do not say whether Landlord is trying to evict you or you just want some money to help with cost of Christmas!!

So say something like

"Dear Landlord

Thank you for your letter.

I am confused; it is not a matter of suffering a loss and it is not compensation. It is in fact a Sanction under S214 of the Housing Act for them breaking the Law by not protecting the desposit.

I am reliably informed that in cases like this where you have failed in your legal duty to fulfil other legal requirements such as annual gas safety checks, that Judges take a dim view and typically award 3x the deposit. There are of course legal costs to consider too.

I am open to hearing your reasonable offer of settlement in this matter, please provide this within 14 days to avoid legal action referred to in my Letter before action.

Yours sincerely

Roz Xyzabcde
"

Now Roz you really need to report your Landlords failure to carry out safety checks, also make sure that the carbon monoxide detectors and smoke detectors are in place and working.

Landlords can face £5k fines so they should take this very seriously but you do not get that, just worth having in back pocket.

Hope this helps

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Ros 20th October, 2016 @ 18:02

Hi
thanks for that.
By LA I meant letting agent.
We have left the property.
As to the money this would go someway to repaying us for the betterment we did to the property.
Long story and one I wont do again - we rented a field from them and paid for post/rail/hedging and hard-standing for a stable block. This was on condition we had the property for a further 3 years. As we were in a FT AST we didn't change it then and there and waited for it to come round to renewal.... guess what our landlord didn't keep their word.
Moral is get everything in writing and witnessed however "nice" and "accommodating" your Landlord or Tenant are.

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Max 29th October, 2016 @ 08:14

Hi,

I am hoping for some advice.

Just last night i received an email from my ex tenants titled "Letter before action". The email read:

"Please find the attached letter regarding to the deposit in relation to (property address). Please inform me of your response by (date - 2 weeks away). Please note, that should i receive no response by this date, I will commence court action (fees at this stage being Xpounds which i will also be seeking to claim back)
Regards (Ha!)"
X and X

This was totally out of the blue.

Facts. This was a short term let (six months) I bought the flat for myself to live in and moved in last christmas after doing a lot of work to the place to get it to how i wanted to live in. I then got called abroad to work for six months so i thought i would rent it out so my mortgage gets covered while i was away.

I have never done this before.

The letting agent helped me find tenants who i met briefly and who were lovely, so i had no hesitation in agreeing to having them rent my property while i was away. I had to leave the UK before their moving in date so this was all done while i was away. The tenants paid their deposit on time and the letting agent reminded me to protect this as i was only paying them a finders fee. I kept the deposit in a separate account ready to pay them when i returned. As i had never done this before (and never will again i doubt) I underestimated the importance of protecting the deposit and as i was so busy with work and i was overseas, it completely slipped my mind, and i did not protect their deposit. This isn't my excuse as i know it will hold no water under the law but it is my reason.

During my time away i had a fantastic relationship with my tenants. I let them hang pictures and mirrors etc and make my flat their home. We even had a whatsapp group where we could all talk and if something needed doing (they wanted to get new catches fitted on my wardrobes and we arranged that) then we would discuss it on this group. They even sent me pictures of how they had decorated my flat with all their stuff. It was all really friendly.

In August, they sent me an email giving me one months notice to vacate the property as they had found somewhere to buy and wanted to give me notice. Thing is, it was a two month notice period so an oversight on their behalf. They asked me if one month was ok but as i was not due back for two i said i would try and see if i had any friends who needed to stay somewhere for a few weeks otherwise we'd have to stick to the two months notice. Still all very amicable.

I came home for a short visit end of August to see family and it was during my stay i realised i had not protected the deposit within the 30 day time frame given and so i protected it immediately. 4 months late. I still didn't know about any possible repercussions.

The day the tenancy came to an end (10 days ago) I gave the flat an inventory, and although they left a few things in a bit of a mess (the wood burner took 2 days to clean) and there were a few scuff marks here and there, i saw this as wear and tear and paid the deposit back in full.

During this time, we are still chatting - "where do you want any post forwarded to", "what address do your want your keys posted back to" "I hope you're settling in well to your new home" etc etc. And then last night as I'm getting in from work i receive the above email. It had an attachment with a really formal letter stating they are coming after me for between 1-3 times the deposit which could see me shelling out nearly 4k plus legal costs.

I am not a rogue landlord, i haven't got tons of properties or loads of money. I understand i made an oversight, but they are after compensation for something which hasn't affected them at all, financially or physically so I'm at a loss of what to do.

As we were on such good terms before this email i called them straight away but no reply. i tried again a few times but same thing. Straight to voicemail. I replied to their email asking what the problem was, had they not received their deposit, asking them what it was they were after, as their email says if they don't get a response they will take me to court. It also says they are open to negotiations whatever that means, but as yet i have heard nothing back from my reply.

Can somebody give me some advice please as i am obviously quite worried and didn't sleep last night because of this. I am not sure what to do or where i stand.

Thank you in advance for any help.

Max

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Max 29th October, 2016 @ 08:21

P.s. I have emails from the tenants saying that i need not bother supplying them with the certificate of protection after id protected their deposit with the DPS as I had told them i doubt there would be any issues with them getting their deposit back in full, which is another reason this has taken me by surprise so much.

Cheers

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David 29th October, 2016 @ 19:33

Hey @Max

So first things first, don’t worry or lose any sleep over this.

Your former tenants are obviously trying it on and that will be apparent to the Judge should they actually go to Court, which I doubt.

What they want is some free money and this first attempt is to scare you so it has achieved that objective.

Now you have three options

1. Pay what they demand
2. Fight him in Court
3. Negotiate

Negotiate is the way to go, I have to say I am surprised because most tenants who do this either mistreated the property or they were mistreated by the Landlord. I suspect they just heard about it from someone and thought it was worth a go.

One thing I am not absolutely clear on is whether you held them to the 2 months notice? That may be the reason, even though they signed the contract they may have felt annoyed by their own mistake.

Based on what you have said, I think it is VERY unlikely that you would ever be ordered to pay more than the minimum 1 month sanction, but we have a way to go before that is even an option.

So as they are no longer tenants and there is no S21 or S8 claim it means they will probably use the small claim court, so they will not get costs, but nor will you should you use a lawyer. Do not tell him this as there is a way to avoid the small claims track, generally do not ever tell them your legal strategy.

In responding to them you are not writing to them, you are writing to the Judge or any Mediator who may be asked to look at this. We want the Judge to see that you are the fair and reasonable person, while they are the ingrates who are just using the Court to bash your wallet.

You start with a letter expressing your complete astonishment and surprise, something like this:

==

Dear Dick and Jane

I was most perturbed to receive your letter before action considering I felt that we had a good Landlord and Tenant relationship, with no major problems on either side.

To be honest I was in complete astonishment and surprise because your letter before action was not preceded by any claim, nor a Part 36 offer of settlement, nor any suggestion of mediation.

I do regard this threat of legal action as vexatious and without merit, but I would like to keep things amicable and avoid wasting the Courts time. I am reliably informed that a Judge would view this for what it is; a frivolous attempt to extort money from me, using their Court in an inappropriate way.

At this stage I would like to ask you to reconsider your proposed Court action and agree a settlement with me, that being a positive letter of reference and the sum of £20 as a gesture of good will with no liability accepted as full and final settlement of this matter.

I hope that you give this kind offer your serious consideration.

Best regards

Max
==

Now I know a reference is useless to them if they bought a place, but this is for the Judge to see that you are being nice and trying to settle. The £20 is low ball but their suggestion was OTT so you have to bring them into reality.

If they have any sense they will come back rejecting your offer and ask for 1x the rent, but they may pretend to play hard ball and ask for 2x the rent.

If they do then you simply write back and say

==

“Dear Dick and Jane

I am in receipt of your recent offer to settle this matter for (1x or) 2x the rent. I am sorry but I cannot accept this as the facts of this matter do not reflect the gravity of such a sanction.

There was no animosity between us, any repairs were carried out promptly and overall I was an excellent Landlord. I am reliably informed that a Judge will take into mitigation the fact that I am a novice Landlord, that I was forced to go abroad at short notice for work and that I quickly protected the deposit in an approved scheme upon my return. I refunded the deposit to you in full despite the fact there were a number of issues with the way you left the property that were beyond wear and tear. I did this because I thought we had a good landlord/tenant relationship.

As I explained recently, I feel it is grossly unfair that you try to extort money from me and whilst I am keen to keep things amicable I will only agree to a settlement that is fair and reasonable. To this end I am prepared to provide the positive reference offered previously and increase my offer to £50 as a gesture of goodwill in full and final settlement with no admission of liability.

I hope you will give this serious consideration so we can end this unnecessary hostility.

Your sincerely

Max

==

They may accept or they may try again, now in any negotiation you have to give small amounts slowly and usually in response to something given by the other side. They will no doubt give some reason why you should pay more but if they do not then they are really showing they are weak.

So be ready to offer £75 and then £100 as your final offer, but at some point you have to draw a line in the sand and be prepared to call their bluff. It is your money and your risk appetite that matters here. A Judge can decide anything they like within the legislation, but a lot of them get pissed off when it is just about the money. They have a huge case load, some may even kick it out and force you to go to mediation, they may say the tenants have to pay for that because you have tried 4 times to settle.

This is ultimately a game of p o k e r, they know you have a potential liability but you know you have mitigation; they will not get costs unless this goes to appeal and that is going to be expensive for them upfront with no guarantee of success. If they mention costs and you respond to that communication, simply ignore it; do not say they can’t claim them. Be aware that any settlement you agree needs to be laid out with a heading of Settlement Agreement, say it is in full and final settlement and it needs to be signed by BOTH tenants.

As they are ignoring attempts to communicate, you need to send your response by an assured means. That means a recorded delivery letter (write on the back that it was sent from a random name Jack Black), a letter by normal post from a different postal area, put a copy by hand through the door and video yourself doing it and send it via email with a PDF version attached for good measure, the subject of the email should be “Formal Response to Letter before Action” use Ifread.com to create a sad face and put it next to the word perturbed in the email version. This will send you an email if their email client does not block it, you will be able to use that as evidence if they deny receiving it. I do not think they will as they want a response with a settlement, they would be nuts to go to Court on such a weak case.

In fact they have already broken civil procedure rules because they did not send you a claim before their letter before action.

So you have enough to get started, please post back here what happened, I am happy to respond again if they throw you a googly.

GOOD LUCK!

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Max 30th October, 2016 @ 08:15

Hi David,

Can I just say how grateful I am that you took the time out of your weekend to comprise such an inciteful and detailed response to my predicament. It has instantly put my mind at ease for the time being and after some reflection I am looking at it as something I am just going to have to deal with. Tomorrow!

It takes me aback that there are people like you who will take the time out of their lives to help people they don't even know. There are not enough people like you.

I shall use your advice and run with it. I will be sure to keep you updated.

Thanks again and enjoy the rest of your weekend.

Max

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Alex 30th October, 2016 @ 11:35

Hi @max,

As the deposit was returned there is no ground for legal action. They can't take you to court as they accepted their deposit back in full.

All the best!

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Benji 30th October, 2016 @ 12:59

@David,

What an excellent post! That should be pinned somewhere as the definitive action for dealing with these leeches.

Hitherto, I would have advised going straight in at a 1x offer and then leave it to the courts to decide if refused. On reflection though, yours is a far better strategy.

If I was to be really picky, I would rephrase the following as;

"I am reliably informed that a Judge would probably view this for what it is"
and
"I am reliably informed that a Judge will probably take into mitigation"

If it did get to court, judges don't like being told what to do.

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Benji 30th October, 2016 @ 13:02

@Alex,
Your advice is totally incorrect.

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David 31st October, 2016 @ 20:27

I am afraid Alex is quoting OLD interpretation of the law.

The law was changed because Landlords were giving the tenant cash in Court and then wasting the Courts time.

Section 184 of the Localism Act 2011 amended Section 214 of the Housing Act 2004,

This is the bit that makes the change...

"Subsections (3A) and (4) apply in the case of an application under subsection (1) if the tenancy has ended (whether before or after the making of the application) and the court—

(a)is satisfied that section 213(3) or (6) has not been complied with in relation to the deposit, or"

...this was always the case but people tried to worm their way out so it was hammered home in statute. YOU PAY A SANCTION IF YOU DO NOT PROTECT A DEPOSIT.

Once a Court "is satisfied that a deposit was not protected in the 30 day period

The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit "

There are a plethora of cases that took this legislation into different directions, the deregulation act 2015 (March to October) made it easier for landlords because they no longer had to get the day exactly right for serving an S21, it used to be a rent anniversary now it is 2 clear months, subject to not being a fixed term with no exit clause. Unfair penalty terms do not provide an exit clause.

It also gave an amnesty period for pre 2007 tenancies and it incorporated the Superstrike decision into law.

In 2014 there was a case where a Judge said

"I find that the Claimants are not experienced landlords, that this is the first time that they had let out any property and that they were letting out their home. That they quite properly put the matter in the hands of professional managing agents who let them down by not complying with the terms of the Act. I find this case to be at the lowest end of the scale of culpability for non-compliance. And for those reasons I award the sum of £1,520.”

Max does not have the agent as protection, he already stated that he had a very basic contract and they actually warned him to do it. However, I have seen the new landlord used many times for mitigation.

In the case above the tenants appealed to the High Court and the High Court dismissed the appeal stating:

"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."

Note that this does NOT mean any landlord can only be charged 1x the rent, it means the Judge has the right to do what they feel is right which was always the case (as it sees fit). Just as they are within their rights to charge 3x.

That is why it is always sensible to be a good landlord, do prompt repairs, no violence, harassment or killing of tenants! Easy mongo, never kill a customer!

So for Max he is likely to get 1x but to get that the leech must go to Court, we can see that in this case it is a try on and so we have the game of P o k e r. It is easy to write a Letter before Action, it is quite another to write up the case on the forms in the right way, file them, go to Court and explain yourself.

Any Judge can go their own way to a degree, most do not like their decisions going to appeal but some will do it if they think the tenant is taking the piss. I have seen a Judge say "well I am deciding that I am satisfied the deposit was protected according to legislation" even though it was not. He completely ignored PI too, of course it went to appeal but that can be very expensive.

So, Please do NOT think that giving the deposit back removes liability.

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David 31st October, 2016 @ 20:37

Thanks @Benji for kind words, ideally a Judge will never see the case, that is the whole idea of the strategy, but they really do get annoyed when they are being used.

You can't say half of what I said in Court papers, but if you have it in correspondence they get to read it and can agree or disagree.

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David 31st October, 2016 @ 20:52

@Max

You made it all worthwhile with that post, making a difference to others is what drives me.

I have helped many a tenant on this very thread, but in those cases the Landlord has been the toe rag. Even then I say negotiate to a settlement.

Your tenant was clearly trying it on, if you read the posts of @Nige and @Benji across this site you will see many a case where they have been kind to tenants only to be slapped in the face with a wet fish.

There are people who have no morals, whether Landlord or Tenant, usually a tenant only does this if they feel screwed.

One tenant I dealt with was angry because the Landlords had promised 5 years tenancy saying they were professional landlords with several properties. A year in they tried to not renew although they had actually signed a new one.

She was so angry she just saw red mist, she had a disabled child and had made lots of modifications. I think they fought for about 2 years, in the end she said if they had approached her and said "I know we said 5 years but we need to sell, can we reimburse you for expenses and help you get a new place" then she would have just gone.

This is why I say to keep comms cordial but friendly with mutual respect on both sides.

Your leech did not follow the rules of reciprocity.

I am glad I have put you at ease, in these situations you just have to assume worst case scenario but do your utmost to make them really work for the bare minimum.

I look forward to your update.

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David 31st October, 2016 @ 20:56

Just to clarify, I quoted

"The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit "

That bit was also amended to between one and three times the deposit.

Not sure what happened to my response today to @Max, probably sent for moderation by @Landlord.

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mr.spacemaker 7th November, 2016 @ 21:53

@David

Apologies, I did not see your response to me previously.
The letting agent advised me to proceed with the section 21 regardless, as from speaking with the tenant, he got the impression that they were keen to leave ASAP and would be keen to get a bailiffs letter in order to do this.

I'm now facing the worst case scenario as the tenant has now correctly claimed that the section 21 is invalid and has also entered a counterclaim against me for not protecting the deposit or serving the prescribed information in time. I honestly thought that the deposit protection rules did not apply to me as the tenancy was so old and the tenant had already asked that the deposit be used against the arrears. I protected the deposit as soon as I was aware of this new ruling, but sadly it was after the 23rd June 2015 deadline.

It was also my understanding that I could not be sued for the (up to 3x deposit) sanction due to the tenancy starting before the requirement was introduced on 6th April 2007, but the claim from the tenant would seem to suggest otherwise as they are deeming the tenancy to have started from the date of the last rent increase.

For simplicity and for the benefit of others reading this later, the key dates for deposit protection are obviously:-

Deposits paid after 6th April 2012 (definitely does not apply to this AST): must have been protected and prescribed information served within 30 days of tenancy starting.

Deposits paid between 6th April 2007 - 5th April 2012 (did not think this applied to this AST but tenant's lawyers are claiming that it does): must have been protected and prescribed information served by 6th May 2012

Deposits paid before 6th April 2007 (this is when I actually received the deposit): must have been protected by 23rd June 2015

The tenant is claiming that the tenancy became a periodic tenancy during the 6th April 2007 - 5th April 2012 period as the fixed term ended in this period, and there was also a rent increase during this period (the only rent increase in the last 10yrs so you can imagine how low the rent is!).

Are you able to clarify this situation for me? Would the tenancy be deemed to have started when the rent was increased, when the tenancy first became periodic at the end of the fixed term, or when we actually signed the AST (the only time that anything has been signed)?
Please also advise if this is clearcut, or if there is some grey area!!

The next thing I need to know, is how I can defend myself and what mitigating circumstances can be suggested (arrears, damages, breach of several terms of the original AST etc.). Obviously I will not be able to count the true cost until the actual eviction (which may be some time if the section 21 is deemed invalid), but there are already significant rent arrears and damages, so I would not want to be left in a position where I settle the counterclaim and refund the deposit, knowing that the tenancy will still end with rent arrears and damages which I will struggle to get back.

How is the current state of the tenancy taken into account when settling? Are the current arrears and damages subtracted from a settlement or do they have to be dealt with separately at a later date? What about the timescales of the payment to the tenant when settling - how long do you get to pay?

Thanks very much for your time. I obviously need proper legal advice on this matter so will not be relying solely on your information, but it would be very useful before speaking with solicitors as my gut instinct is that will offer better advice than them! I would also welcome any recommendations of solicitors specialising in these kind of matters....

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David 9th November, 2016 @ 11:05

@MrSpacemaker

The advice anyone can give here is always going to be dependent on your priorities; do you, no matter what, want this tnuc out ASAP and are prepared to pay for it or do you not mind a long song and dance if it keeps it cheap?

I ask this to get an understanding of your mindset; regardless of which, your options will be dictated by the facts.

My advice is ALWAYS going to be to settle settle settle but you need to first of all line up your ducks, scare the shit out of him and then say forget all that nastiness, let’s both be nice.

I am concerned about what you said the Agent mentioned; that he would be keen to get a bailiffs letter. This suggests that his Local Authority is advising him to delay eviction by rejecting S21, but the bigger question is whether you think he is likely to be considered vulnerable under Housing Act (you have to be practically dead these days) and therefore creating an obligation on the local authority to house him?

Now Councils are supposed to recognise that S21 is a legal procedure, the end of which triggers homelessness, but some nasty bastard twat Councils are still insisting that they wait for bailiffs thus causing thousands of pounds of costs which are unlikely to be able to be recovered.

The difficulty this poses is that IF your Council is one of the NBT ones then they prevent you coming to an amicable solution, because if the guy leaves before being forced to, then he is making himself homeless and the Council then no longer have an obligation to him. So you first need to establish whether he has medical conditions that would make him vulnerable under housing regulations?

Ring your Council and find the name of the housing officer who is dealing with your tenant, ask what their policy is, are they recognising S21 expiry as homeless or are they insisting on bailiffs? When they have answered you then ask whether they have a duty of care to house the tenant, they may decline to answer but if you phrase it right they might. For example “Dick has been a tenant of mine for over 10 years and I am concerned that he finds a new place to live, so may I ask you, do you consider that you will have a duty to house him once he has been evicted?”

The Government already had a big debate, special committee who produced “guidance” on this extending to over 400+ pages. The bad Councils are ignoring this and quoting other laws to gatekeep people, so the Government is creating legislation that is currently going through Parliament which will put the duty on them to follow guidance and take on single people for 56 days. It better be rock solid, that is all I can say.

The tenant probably can’t afford private housing market now so wants social housing, but the Councils under most pressure are using a select bunch of private landlords who are prepared to take DSS tenants for their hovels. If your tenant does have medical issues or is old they may want to put him in a supported living accommodation.

My gut feeling on reading your post is that you might as well cut to the chase and issue Section 8 proceedings, because they can get a tenant out for arrears in a minimum of 14 days and a maximum of 42 days for arrears. You want to front load the claim with as many clauses as possible that you can substantiate, especially the mandatory ones.

Now the benefit of Section 8 is that you can go for costs and you can ask for damages to the property to be recovered where they go beyond wear and tear. At risk of rhyming I will say bear in mind that after a ten year lease wear and tear is expected to be high. You need to get an inspection under your tenancy agreement (terms of original tenancy still apply), ideally you go in with a 3rd party and get them to create a report.

Use Section 8 clauses 8,10,11,12,13 and maybe 14 & 15 if appropriate, now I know you are thinking “WTF are all these?” so trot over to this link where you will find the definitions and a nifty download of paperwork :

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

The key one is ground 8 because it is mandatory eviction and arrears must be in place at the time you start the proceedings, sometimes tenant pays off arrears (great for you) in the vein hope the Court will take pity, which is why you list all the times they did not pay, that becomes basis for ground 10, so if the beginning of the arrears was in 2008 and you still have £1000 outstanding you can argue that he has had arrears since 2008.

You can also claim reasonable interest, base rate +4% max and compound it annually, you ask for this when fate has been determined, almost as an after thought, if it pleases the Court can we request the arrears, interest thereof and legal costs be awarded.

BTW if the arrears are more than six weeks you can ask the Council to pay you direct if he is on Housing Benefit, at least it freezes the arrears.

Fucking letting agents, (parasitic amoebas at the best of times) always giving advice when they do not have to bear the consequences of that advice. I tell you why you do not proceed with the S21 regardless, because the objective of the Local Authority is to drag this out and put off their obligation. I advise people all the time to not reject the S21 till almost the end of the 21, even the night before if it is invalid. Why? Because it gives the tenant breathing room to find a place, they get the 2 months of the first one and then another 2 months from the corrected one.

You can do a belt n braces approach and do both S8 and S21 asking the Court to conjoin the cases to be heard at the same time, it depends on timing. Ask your local Court how long they are taking to hear S8 cases. If they are close you can do it.

Now if he has no vulnerability obligation due to him you have to persuade him that it is in his best interest to settle and part of that will include a reference from you and a single ticket to one of the armpits of the UK like Hull, ideally somewhere where he has a “local connection”, rent will be cheaper and housing rules a bit softer.

There is a structure to negotiating which you can see from my posts above, which is to lower their expectations by reminding them of facts and then low balling to start with. I would start this with a fact finding mission, call the guy and say you are concerned about his situation and would like to have a chat over a Chinese and a beer. Say you will do what you can o help him but you need to clarify what the Council are saying etc.

So to the meat and gravy of the law (as determined by the current wind direction which is currently SSW).

These pre 2007 tenancies were a real pig because the law has been amended so many times, but the Deregulation Act 2015 was supposed to deal with all the mess (or create a whole load of new mess to keep solicitors and barristers in employment).

Regarding Pre 2007 the Deregulation Act 2015 sort of put the Superstrike legislation into law, or rather gave the framework; technically that the periodic tenancies were to be treated as separate but also substantially the same (I know, oxymoronic). The key principle of Superstrike was that the Periodic tenancy was an entirely different contract, albeit with same terms. Previously you had to return the deposit and re-protect it (in a virtual way but also issuing new PI). This tripped up so many people and even now there are aspects that are not straightforward.

Now regardless of the tenancy date you ALWAYS have to issue a section 21 but IF the tenancy became periodic BEFORE April 2007 you have the option to return the deposit rather than protect it either must be done BEFORE you issue the S21.

In the cases where the tenancy went periodic BEFORE April 2007 you are not breaking the law (because it was what was in force at the time) but, you must still comply with the today’s legislation with regard to protecting the deposit. However, you have an option of returning it for these Pre2007 periodic cases ONLY. So in these cases there is no sanction but your S21 can still be invalid.

In cases where the deposit was taken before April 2007 BUT the tenancy became periodic AFTER this date (YOUR SITUTATION), then the deposit MUST BE PROTECTED AND PI ISSUED. You had the amnesty period up to 23rd June 2015 and are at risk of sanction HOWEVER, there may be mitigation.

As a Landlord of 10+ years the Judge will want to know how many other properties you have, whether you have protected the deposits of those? Your pleading for mitigation comes from two fronts; firstly that you depended entirely on Agents who you had reasonable expectation to be the professionals and to deal with your obligations on your behalf. The second mitigation is that the law affecting 2007 tenancies has switched back and forth, hence the requirement for the Deregulation Act to finally clarify the law.

Did the agent actually give you any advice regarding the deposit and protecting of it? Have they been your agent since day one of the tenancy? Since the 2015 legislation there has been some acceptance that although the buck stops with the landlord, they themselves relied on the agent for professional advice.

IF you can point to the Agent and say they advised you that this tenancy was exempt because it was pre April 2007. Then say that the 2015 legislation changed that obligation and at the very first instant that you became aware of the obligation you protected the deposit, then you may get a slap on the wrist. What will help you is if you can show the tenant has not paid the rent and the state of the property is going to cost you thousands because of them trashing it (if that is the case).

On the paperwork they SHOULD be factual about the date the deposit was taken and then say a new statutory periodic tenancy was created on X date. For this reason you should write to the Court asking they dismiss the action because the tenancy actually began on X date and no tenancy started on the date alleged in the counterclaim, enclose a copy of the original tenancy agreement.

They will either dispute your date, amend their counterclaim or may even re-file.

The S21 is an accelerated procedure, was their counterclaim made on the correct form where they paid money or did they just include it as a dispute of the S21?

The reason I ask is if they have not done the right forms you can ask for that to be heard separately and have the Court request they pay, Courts are not free you know!!

So many of these S21 cases are thrown out not by a Judge but by a clerk under advisement who reads what they have given as the reason. You show a tenancy start date does not match and a busy clerk may chuck it out. That will not stop it, just have it sent back for inaccurate filing of the basis for their counterclaim. The purpose of this (if you have not resolved this by then), it to shatter their confidence and make them more malleable towards a settlement.

As it happens the legal position was against you in Superstrike, but you did not know that. It was considered reasonable to a Landlord that the tenancy they took out was the contract in force. The statutory periodic was a tenancy created by legislation and Landlords are not experts in legislation, Lawyers and Judges are. So would it have been reasonable for you to understand it when it bounced around the High Court and new legislation was even brought in to clarify it.

Most likely the Judge themselves will remember the confusion and accept it as mitigation, but they still have to follow the Law, on a case like this where the facts cannot be disputed I think you are looking at 1x the deposit, they could go to 2x but I doubt it.

I would always say settle but the difficulty is the tenant can’t be seen to have made themselves intentionally homeless, HOWEVER, technically the moment they stopped keeping rent paid they made themselves intentionally homeless. This hidden factor is how tightly the Council enforce this, I have to say that for almost all Tenants it is the first hurdle for saying they do not have an obligation, it will depend on how vulnerable the person is. If for instance they had a mental disorder that could be blamed for the non-payment that would shield them.

Assuming they have no excuses then your negotiating position is to say

“Look Dick, I want to be as fair as I can be, but I have to protect myself too. Now Dick I have spoken to the Council and they say they will not house you because you made yourself intentionally homeless by not maintaining rent payments. I have also taken advice with regard to defending your counterclaim and they reckon I will only be sanctioned for a maximum of 1x the rent if you counterclaim because there is mitigation. So what I would like to do is agree a full and settlement with you of the S214 claim. Otherwise I have to appoint a Lawyer and go for section 8 eviction under clause 8 which means you can be evicted in as little as 2 weeks and the Council will not house you because under their rules you made yourself intentionally homeless. If I have to take you to Court under section 8 I will also go after my costs, damages and the interest on your arrears. Your deposit will be held by the DPS and I will be claiming against it for the repairs so you will get none of it back.

However, I do not want to have to do this, what I do want is for us to agree a settlement.

My offer of settlement is that you leave at the end of December, I will pay you £200 and write you a good reference. You will then need to find another place to live in the private market. If you need to get to somewhere cheaper where you have a local connection, I may be able to help you with a train ticket.”

Realising his position he may accept this, but may ask for more money, give in slowly and have a figure in your mind that you will not cross.

You have to decide at what amount does it make sense not to go to Court and that needs to be held back as your final negotiating amount. At the same time you need to understand slow tolerance, so on day 1 spending £5k may seem outrageous to you, after day 30 you have already spend say £500 and are faced with spending another £500 merely to get you back where you should have been, then 2 weeks later you are faced with defending a counterclaim so you allow another £1000 to save you £4000 in penalties, bear in mind that £1000 is about 4 hours of a good lawyers time. Then the tenant says you did not carry out repairs and the Judge adjourns the hearing to get reports. The legal fees go up, it becomes clear that bailiffs will be required because of Council policy and pretty soon you accept each increase in costs and are past the £5k that seemed outrageous not long ago.

My approach to this is to just ACCEPT it may take longer BUT use the more solid weapon, i.e. Section 8. Sure it may cost a bit more but you can try to reclaim those costs albeit that the tenant probably does not have the funds.

Really at this stage it is about paying for certainty.

Generally an S21 is considered no fault but Councils WILL contact a Landlord and ask them if there is any chance of delay, they then send the questionnaire trying to see if the tenant made themselves homeless under their rules. So you do have an opportunity to prevent him getting social housing but it is much more like blackmail to use that.

Using Section 8 on the other hand is about protecting your interests.

You will be forced to issue another S21 notice if you still want to use Section 21.

I want to make it clear that the day rent was increased is not really relevant in this matter, what IS relevant is the date the tenancy became statutory periodic and because you state it was after April 2007, you are at risk of sanction. On this assume the worst, use your talent skill and power to create a solid position from which to negotiate. The grey areas really only apply to much older tenancies, this tenancy clearly falls under dereg act rules.

Part of that will be getting the Tenant also to a point of ACCEPTANCE, like any loss there is a bereavement process, but if he can see that his hopes of Council property are screwed then he has to consider his other options.

Regarding mitigation, arrears, damages and breach of terms; they are not really a factor in S21 sanctions but they ARE specifically separate grounds under Section 8. So the trick is to get the two held at the same time. Or ask that the Counterclaim be heard AFTER the Section 8 but by the same Judge because they will be familiar with the case and it will save Court time.

That way that it may be possible to offset any counterclaim against what he owes so at least you do not lose out. You can ask the Court for time to pay the sanctions, express extreme hardship caused by the tenant damaging the property and provide a budget that shows you can’t afford to pay more than £5 a week. I do not think it will be an issue as I think you will be able to plead the mitigation I have mentioned above and because you can offset it if you get a section 8 with costs, interest etc.

The conduct of both Tenant and Landlord are taken into account, Judges are human beings, they can imagine what it is like to live in a house in a poor state of repair that is hard to heat because of bad repairs. They can also imagine how it feels to be on the wrong end of £20k of repairs and have to pay a sanction because of some virtual tenancy created by statute. However, they have to operate within the legislation; I know of some that will say they find the deposit WAS protected even though it opens them up to appeal. They may do this because it forces the tenant to “pay to play” and be subject to costs.

One thing to bear in mind is that if the person is on benefits with no assets they can appeal for very little money and anyone can go bankrupt for £350 if they have no money.

You are right that you need proper legal advice, bear in mind your objective should be to settle and to create the circumstances where the tenant is open to a reasonable settlement. Better to pay them a month’s rent, give them a reference and a train ticket if it gets them out more quickly.
The solicitor you use will depend on where you are in the country, they will always be cautious to not give you false hope which is right and proper. For me these are always games of P O K E R your hand is not the worst and if you can bluff it right you may get out clean. Otherwise be prepared to do what is necessary to create the best outcome possible according to the circumstances.

Remember his hand may be dire too, the Council may have no obligation to him and he will be on the street. You can tell him that there are ways to recover from that position, he will need to find the local charity, get them to use no 2nd night, then try to work from there. These charities often have Landlords that have specially adapted homes, they are HMO’s you get one room and they get housing benefit paid direct from day 1.

BTW do not unprotect the deposit, if the deposit was protected before the S21 was issued and REMAINED protected since then is affects mitigation. If protected after S21 then you will have to start over.

So you cancel the S21.

Check how he did the Counterclaim, did he file a proper claim or only respond to S21, technically he can’t counter claim a claim that has been cancelled. Depends on the paperwork used.

Gather your info from the Council about tenant realistic eligibility for social housing

Negotiate with tenant saying you have cancelled S21 and he will decide your next action.
If he declines to negotiate then just resign yourself to Section 8 and follow through.

THE authority in the UK is Giles Peaker from Anthony Gold if you can get him. Other lawyers may be OK but only if they have handled at least 20 similar cases with similar issues from the Landlord persepctive, they must be able to converse fluently about S21 rather than have to look it up.

Giles is a very reasonable chap with a great sense of fairness, Andrew Gold are specialists in this area. You could not be in better hands. Just remember legal action is a last resort albeit that your hands may be tied by Council Policy or the Tenant’s mistaken belief or lack of values.

Good Luck!

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mr.spacemaker 9th November, 2016 @ 16:50

@david

Wow, thanks so much for your response, you've really set my mind at rest, especially as some of the things that you've said confirm my thoughts and research.

My mindset is that I want the tenant out, but don't mind waiting a bit as I want my final costs to be lower, and on principle do not think he deserves any money from me when he has completely breached the terms of their contract.

Funnily enough, I decided last night that (pending legal advice) I would be best off withdrawing the Section 21 notice and going for Section 8 on discretionary grounds.

You are right in that the tenant wants a bailiff's letter because the council state that they cannot offer any help until this point. Even if they know that an eviction is inevitable, they are keen to drag the process out as long as possible, as there is such a shortage of properties.
The benefits officers have stated to me previously that the tenant may well be considered intentionally homeless. It's a bit of a grey area whether they have a duty of care on medical grounds but my gut feeling is that they would be keen to see the back of him so there will be no special treatment. Regardless, the tenant would be put into temporary accommodation while they assess the 'intentionally homeless' angle.

The tenant definitely can't afford the private housing market now, as the cap on rents is well below the market rate in the area.

I always felt that Section 8 was the best course of action, but the letting agent advised against it, as they were hopeful that Section 21 would go through without a court hearing.
I also had a slight concern about the mandatory grounds - it's too easy for someone to catch up on enough of the arrears at the last minute to halt the process.

I was already aware of the issue with wear & tear due to the length of the tenancy. Even though the house is a wreck, it's probably not in my interests to pursue too much in the way of damages to the property and focus more on the fact that we fully expect there to be additional costs resulting from the tenant leaving the house in a poor state and not taking all of his possessions and rubbish with him. This is a pretty safe assumption considering the state of the house and the fact that the tenant will have to go into temporary housing.
So my main claim will be for rent arrears, which is easy to prove. My feeling is that it will be safer to do this on discretionary grounds 10 & 11, along with other discretionary grounds, as previously mentioned. Should I also use mandatory grounds 8 anyway, even though they might be able to get out of it with a last minute payment?

It's an interesting point that you have made about the deposit. From what you are saying, because the tenancy became periodic after April 2007 (and because of the way the Superstrike ruling is now applied), the deposit MUST be protected, and I do not have the option to return the deposit (as previously suggested by the letting agent). It is currently protected, and I can show that I did this as soon as I found out that it needed to be protected. It was not protected in time though, nor was the prescribed information served in time and there is obviously no way for me to fix this now.

Should I now re-serve the prescribed information, knowing that it will still be invalid as it was not done in time?

They appear to have stated the correct dates of the tenancy/tenancies on the paperwork.
I'm not sure what you mean by the correct form? The counterclaim follows on from the defence as part of the same paperwork, so I am assuming that's it's not on the correct (paid for) form.

Should I be asking now for the counterclaim to be heard separately, or is that just something to consider for the future?

Also, should I just go for the section 8 eviction before offering a settlement?
I know that there will obviously be extra costs involved with this, but I honestly feel that a Section 8 court hearing (and the events leading up to it) will put me in a much stronger position and I also feel that the tenant would not accept anything other than a HUGE settlement offer as they have been given unrealistic expectations by their solicitor.

Regarding Section 21, my understanding is that I can't use this, as the deposit was not protected (and prescribed information served) before the June 2015 deadline. Am I right?

I'm very much interested in what you say about the date of the rent increase being irrelevant, as the counterclaim seems to be treating the date it became periodic AND the date of the rent increase as two separate tenancies (potentially with two sets of sanctions). Could this be found to be the case and it could be judged to be three separate tenancies in total, even though the AST was only signed once at the very beginning? Or are they simply trying their luck?

How do I get the counterclaim heard after the Section 8 by the same judge? I feel that this could be very important in my case, as I need to show that the tenant owes me money before I am ordered to pay them anything.

It should be very easy to show that my conduct has been more than fair. I have been extremely patient and more than one council employee has told me that there is no way that they would have been so patient and understanding in the same situation.

The deposit was protected before S21 issued and it remains protected.

Regarding cancelling the S21, do I inform the tenant's solicitors of this immediately?
That's great if you can't counter claim a claim that has been cancelled. That means that they are back to square one and will have to start again if they want to pursue their claim?

Once again, thanks so much for all your help and advice!!!!

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Alexi 9th November, 2016 @ 20:59

Dear David,

I am a tenant of 4 years now, my deposit was initially protected under the mydeposits scheme and this was done within the 30 day agreement. Unfortunately the agency stopped paying my landlord and subsequently my landlord decided to move agency. The new agency liaised with the old agency requesting a transfer of the deposit however they were unsuccessful. Two months after my landlord moved agency, the deposit became unprotected - I have confirmed with Mydeposits whom stated that it became unprotected via landlord/agency as the tenancy had ended, (although i was and still am living in the same flat under the original assured shorthold tenancy agreement). My deposit money was taken by the old agency (due the nature of the scheme; money was held physically with the agency).

I asked my landlord and she informed me that she did not sign anything regarding unprotecting my deposit. My landlord informed me that the new agency were working on getting my deposit transferred and that I should liase with the agency regarding this (she essentially washed her hands of me) and that was the last I have heard from her. I took it up with the new agency and chased them for 3 months but it was the same story - still trying to get it back from the old agency (who went bust!). I got some advice from shelter who informed me I should not be the one trying to get my deposit back and that its the landlords responsibility. It's now been 1.5 years since this has happened and I have not heard anything from the new agency nor my landlord on what will happen when I move or what's in place for me? I feel this is very unprofessional and really disappointing, neither party has thought about me. This has caused me a great deal of anxiety and I had to take time off work to get advice which cost me money.

I have decided to move home and I stopped paying my last month's rent and am now getting many calls/emails with regards to the rent money - literally being hounded. I have technically paid for this month (as you pay in advance for the month you are about to stay in). I am now just fed up with the calls/messages but do not want to tell them I am leaving as I don't want visitors to look at the flat until the last month (i.e. period of notice). I am planning to leave on a date that is accountable for the deposit amount I paid (to be fair to the landlord).

They are now indirectly threatening me with visiting the property to ensure its up to scratch even though they have very recently carried out an inspection - mostly likely because I have not paid this months rent. I am scared they are going to come into my flat before I leave, what are my rights? What should I do? Can I claim compensation considering I have stayed in the same property for the last 4 years with the same agreement in place, with a deposit that became unprotected during the tenancy?

Any advice is great appreciated and thank you in advance for taking the time to read this.

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David 10th November, 2016 @ 02:34

Hi @Alexi

It helps to have the month and year because there have been legislation changes over the years.

So first off you need to understand that tenancy agreements are legal contracts called an Assured Shorthold Tenancy or AST, they have a start date and an end date (the fixed term – minimum 6 months). The end date may be extended by further extension to the contract or if you just stay in the property beyond the end date or the extended date.

To clarify this; say you take out a tenancy for a year on January 1st 2012, assuming you have no break clauses the contract lasts till December 31st 2012. Agents like to stitch up tenant and landlord by extending contracts for say another year. This is unnecessary because if the Landlord does not issue you with eviction paperwork 2 months before the end date (called a section 21 notice) and you continue to stay in the property, then a new tenancy is created by statute, it is called a statutory periodic tenancy STP, this replaced the AST, but the terms of the original tenancy still apply.

So it is entirely possible that your AST has been replaced by an SPT.

Another thing that may have happened is that MyDeposits used an Insurance deposit protection rather than a Custodial deposit protection. Agents prefer these because THEY keep the money and the insurance merely provides the protection.

The downside of an Insurance deposit protection is that MyDeposits can rescind the protection if they do not like the way an agent is behaving. If they kick an agent off their scheme the deposit can become unprotected. It can also happen if the agents change because the new agent may not be approved by My Deposits, note this ONLY occurs on Insurance deposit protection, which your post suggests is what you had.

So you need to clarify some things with MyDeposits, ask them to confirm things in writing, specifically what date the protection ended.

Your Landlord did not have to sign anything for the deposit to be booted off the MyDeposits scheme, many a Landlord had to pay a sanction because protection was lost, although there is some mitigation if the Agent was supposed to be handling things.

It is also possible that the first agency extended your tenancy and that when they changed agency there was no extension so at that point your AST ended and your SPT began. Again, dates of the change of agency and when this 2 month end of protection occurred would be useful.

Now the Law said that the SPT is a different contract and new PI needs to be issued to tell you where your deposit is now protected and how to access it. Failure to do this in itself would trigger a sanction, but it seems from what you say that the deposit was unprotected and remains so to this day 18 months later.

This is very bad for your Landlord because the buck stops with them and they can be sanctioned for up to 3x the deposit and forced to give you the deposit back. They might have pleaded for mitigation, but the agent is their agent and they had to make sure they complied with the law. The fact that they have ignored you all this time is going to look bad for them to a Judge. If they had moved the deposit to another scheme and just forgotten to give you the PI that would be one thing but this is worse.

Now what you are doing wrong is not paying your rent, you cannot use your deposit as your last month’s rent, the deposit is there to underwrite any damages to the property or breach of the contract you made. There is no “technically” here, the contract says you pay upfront for the month.

So my first bit of advice is to pay that rent immediately because you need to be seen to be the injured party here. However, I have written the letter below on the assumption that you are in dispute and have taken a lien on monies due to protect yourself.

The 2nd thing you have done wrong is not to give notice of your intention to leave. There will be a term in the agreement that says how much notice you have to give but generally it is a month if the rent is paid monthly, especially if the tenancy has gone SPT.

Now regarding your fear about them showing people around and your fear of them turning up, both of these can be avoided quite simply. If you are really worried you are entitled to change the lock, especially if you feel harassed. A new cylinder will cost a few quid on ebay but keep the old one to restore the lock when you leave.

If they have no clue as to why you have not paid and you fail to communicate it is no surprise that they want to check you are still there and establish communication with you. However, they cannot invent inspections and even if they did, they have to be arranged at a mutually acceptable time. The same applies to showing people around, it has to be at a convenient time and you can keep moving the goal posts so it never happens. So for example you could say “any viewings have to be done in your presence so you can protect your possessions and you have allocated Sunday between 2pm and 3pm to do this on condition that any prospective tenant is accompanied by the agent at all times and that prospective tenant does not call at the door without the agent”. You can then cancel that on the Saturday because something came up that requires your urgent attention.

As I said the same applies to the inspection, you can set a date and time a week ahead as being the only time, but you can also say that because they have been intimidating you that you do not feel safe, so you want an independent third party present and that will take time to arrange.

Now do you have a place to go to lined up or are you flexible?

BTW do not call it compensation, it is a sanction which is a penalty which the court decides how much but the amount is paid to you.

Right now if I were in your position I would send an email to both the Landlord and Agent saying

“Dear Mrs Landlady and Mr Agent

I have been extremely perturbed by your hounding me to pay this month’s rent, I felt this was necessary because I have been trying to establish the status of my deposit protection for over 18 months and neither of you are responding.

I have now taken advice on this matter and have established that you Mrs Landlady are ultimately responsible for making sure my deposit was protected throughout the tenancies. I have been advised by MyDeposits that their insurance deposit protection expired over 18 months ago.

As a result of this you are in breach of Section 213 of the Housing Act and I must now inform you that unless we can reach a settlement I will be issuing you with a letter before action to claim a sanction of 3x the deposit plus my deposit back in accordance of Section 214 of the Housing Act.

At this moment in time I am withholding rent as a lien on your financial obligation to me regarding this matter until we can reach a mutually agreeable settlement or Court action is taken.

I need to remind you that ignorance of the law is no defence for non-compliance of the law. I am not interested in whether you think the agent is responsible, I spent three months chasing them with no response. As a result I have lost all faith in both of you.

However, I am prepared to make an offer for full and final settlement which will avoid unnecessary Court action. This offer is conditional on the immediate cessation of you hounding me and demanding fake inspections. These are not convenient and I would draw your attention to the Harassment Act 2007.

I am prepared to settle this matter under the following conditions:

Immediate cessation of calling me, call communication to be done via email

The Landlady to pay me the sanction of 2x the deposit plus the return of my deposit,

I will then pay for this month’s rent.

The Landlady will provide me with a positive reference by 17th of November 2016 and respond is a positive manner to any enquiries made by potential Landlord or agents.

I will write the reference and email it to the Landlady who will sign it and return it by the above date.

I will leave the property on December 1st 2016

As I have said I have lost all faith in both of you, this settlement offer is valid for 7 days, after which time I will be forwarding the letter before action to you Mrs Landlady.

Yours sincerely

Alexi Tenant”

Now @Alexi you would do well to establish the dates and confirm to me whether the original tenancy has been extended each year or even at all or whether it became an SPT. Dates are critical because they may even increase the sanctions. So I need to know the date the deposit became unprotected and the date the tenancy became an SPT.

I would expect them to either come back protesting they are blameless or offering you less. They do not really have a leg to stand on there has been no re-protection of the deposit into an approved scheme and there has been no PI served, their conduct makes this worse.

I would say you have a pretty strong case, I always urge people to try to settle but some people will not and so be it.

Let me know the details I asked for and update me on their response. I can advise you of the forms required to kick off the legal action and the letter before action wording, I can also advise how to get his heard on the track where you get your costs back so you will be able to use a solicitor.

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Alexi 10th November, 2016 @ 13:30

You are spot on with regards to the type of protection scheme I had. I have written postal confirmation from Mydeposits that the protection became unprotected in September 2015. I also have email confirmation from mydeposits that it was the agency that unprotected the deposit via their online account. Also please note the new agency do not use mydeposits and use a different scheme (a scheme by which the money is kept with the insurer).

The original agreement changed to another assured shorthold tenancy agreement with a commencement date: May 2014; the initial term tenancy was 6 months and noted the original mydeposits certificate number (which was still valid at that time). I have just noted that it states the 'expiry date; to and including to was Nov 14!'

However my landlord confirmed on email after she moved to the new agency (moved to new agency July 15) that this agreement was still valid on a continuation basis. I have no other paperwork other than this second agreement so I don't think it's changed to an SPT? Now worried do I even have a valid agreement in place?? Or is the expiry date based on initial term of the tenancy being 6 months?

Does this information change anything in terms of my rights? I haven't yet sent anything as I wasn't sure if this would change anything with regards to the email I will be sending? I will await your response.

I want to note that I saved my landlord further money being lost to the old agency by stopping my direct debit JUST in time before it was transferred to them and that was simply because I'm an honest human being and was doing the right thing. It's just sad that she wasn't interested in helping me when she knew I was struggling to get my deposit back from the old agency.

David I can't thank you enough for taking the time and to help a stranger, if this works out for me please let me know how I can repay you? Alternatively I could give some money to charity?

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Alexi 10th November, 2016 @ 13:41

Sorry David please ignore my panic! Just re-reading it all, it looks like I must have an SPT in place, as my landlord never issued me with a section 21. As you said a new tenancy would have been created automatically by statute after my AST ended in Nov 14. So even though my landlord hasn't officially informed me that I have an 'SPT' in place, its automatic by statute. Am I on the right track here?

Again, my apologies.

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David 10th November, 2016 @ 15:26

No Worries @Alexi I am happy to make a difference, that is my reward. I am sure Karma will reward me somehow!!

So to get the dates right, your original AST started in 2012, I am guessing in either May or November and ran till May 2014 at which point a new 6 month (substantially the same) AST was signed taking you to November 2014 at which point you became SPT.

Regardless of the Sept 2015 termination, in law your protection ended in November 2014 when you flipped to SPT, the deposit relates to the original tenancy. Superstrike applied at the time and has been put into Law by the Deregulation act 2015 (March & October).

Superstrike and Dereg put an obligation on the Landlord to serve new PI and reprotect the deposit.

When your Landlord says continuation basis she just means SPT although she probably did not know the terminology or that she had to re-protect deposit. Reprotecting does not really mean they have to give it back and then you give it back to them, what triggers it is the new issue of PI relating to a new tenancy that started in Nov 2014, the PI has to have those dates and refer to an SPT.

Nobody needs to worry about being covered by a tenancy agreement, the whole point of the SPT is that even if your Landlord does not give you a tenancy agreement you are covered by one.

There is no tenancy security in the UK save the first 6 months unless the agreement is fixed term for say 3 years with no break clauses and penalties for BOTH sides if ended sooner. Legally a Landlord can't issue a section 21 to evict a tenant in that 1st six months, after that it is open season. So if a Landlord wants to increase rent but does not want to endure a potential rent review, they issue an S21.

On tenancies signed before Oct 2015 they were able to do this if a tenancy requested repairs and reported them to the Council, Dereg act now prevents revenge evictions.

So on Count 1 In Nov 2014 the Landlord failed to re-protect deposit and issue you with PI for SPT. You were technically not protected From Nov 2014 and MyDesposits could have refused to repay you when agent went bust (had you left a month after) because the PI was not issued

On Count 2 In Sept 2015 the insurance backed deposit held with MyDeposits was terminated, at this time you became totally unprotected and have been to the best of your knowledge as you have never been issued with a deposit protection certificate, never been notified by MyDeposits, DPS or TDS of any such protection and your Landlord has failed to issue you with a PI for the protection of your deposit.

So really nothing has changed, you are on SPT and if they want to evict you then they need to issue you with a legally valid S21. However, as you have stated you want to leave I would get that letter off and get a new cylinder for your lock just to give you peace of mind.

You can expect their initial response to be hostile but once they get legal advice they will negotiate that has to be the goal for all. I think your posisiton is pretty strong because their conduct has been poor.

You expressly requested info on deposit and they ignored it for 3 months, so their hope for mitigation may not succeed, especially as they screwed up the SPT PI. They may even face 3x in Court because the whole purpose of this legislation is to protect tenant deposits.

You have not said where you are going, I assume to another private let as by leaving you can't get social housing as you will have intentionally made yourself homeless by leaving old property.

Do keep us updated!

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David 10th November, 2016 @ 15:28

@mr.spacemaker

I am doing you a long post, I think there is some confusion in your posts when you say your S21 is invalid but then say it was protected before S21 was issued, can you please confirm it was protected before S21 and the PI was served before S21?

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Alexi 10th November, 2016 @ 19:12

Hi David, thank you again!

I don't have a property that I can move into yet, I was planning on leaving at the end of the year and wanted to give them 1 months notice at the end of November, that way I am less disturbed by them. What are your thoughts? Should I still include the part about leaving yet? I know you said that I can stall them etc with viewings. The plan is to privately rent again.

I requested info on my deposit but it was the same story with "we are sending emails/calling but nil from the old agency" and my landlord was aware I was chasing it with the agency and after 3 months that was it, I never heard about it again and they never asked me about ever again, so would that be enough to ensure they wouldn't win a plea for mitigation?

Do I initially send this letter to the agency, addressed to agency and the landlord or send it to both, addressed to both?

I'm sorry for my constant messages, I do really appreciate your help and advice.

Best wishes,
Alexi

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David 10th November, 2016 @ 20:39

Hi @Alexi

You have chosen a tricky time to move but good news is that things tend to go quiet in December (the time when you arrange) and get busy in January.

As that is the case I would pay the rent as soon as you can so that you are not making them the injured party.

Having said that, the landlady has demonstrated a complete incompetence in protecting your deposit; so it is reasonable that you are concerned about getting it back. It just looks good if you are seen as adhering to tenancy with Judge (if it gets that far).

I would drop the bit about leaving and say that you delayed paying the rent because they are not responding to your legitimate queries about your deposit, but that you will pay it immediately when they reply.

Are you saying you requested it again other than the time you mentioned above where you tried for 3 months?

If you have any emails from the times you asked it will be great evidence.

Mitigation can be "I am a new landlord, this is my only property and this is the first time I rented so I had no idea" or it can be "I am new to this, I employed these professional agents and had a reasonable expectation that they would handle this for me".

However, the Judge MUST award at least 1x the rent if they find the deposit was not protected; you have that as evidence with the mydeposit paperwork. It would be great if you could contact Mydeposits and ask if they sent any comms to the landlord at the same time they did you. First you ask them hypothetically as if you were a Landlord and you had an agent who was considering using them, would they inform you and the tenant. If they say yes (which I am pretty sure they will) you ask them to confirm that in writing by email to a different email address (just go create a random Yahoo one.) Then you call back and ask them specifically, if they do not want to provide the info do a subject access request on all paper and computer records, cost £10 max.

The landlady was made aware by Mydeposits, she was made aware by you and she should have asked the new agent, the law says the buck stops with her. The agent chance of mitigation really depends on their role and what the landlord is aware of. I am aware of a High Court judgement where mitigation was given, the tenant appealed that it was too low. It is important to understand that this judgement only ratified the District Court Judge's right to award between 1x and 3x, it does not say they have to allow for mitigation.

The person that presented that case only had to use the history of “Why this legislation was created”, then show all the amendments on appeal and in 3 to 4 specific Acts because Landlords were playing tricks to get out of it. They then show that it was clearly very important to legislators that they want these penalties to act as a deterrent to Landlords by punishing them when there is a flagrant disregard for their legal obligations. This was not some new Landlady unaware of deposit legislation, she was aware and had been reminded, it was her duty to make sure it was done.

I would send the letter directly to the Landlady, why deal with middlemen, if you are going for the jugular you go direct. Your contract is with the Landlady, send it by recorded delivery (put some random name on the back) and then by email.

No worries about constant messages it helps you and others reading this page.

What would concern me if I was the Judge is that the old agent has gone bust and she knows that. Then twice no PI served, she may get a 3x penalty but I would settle for 2x and return of deposit as a prompt settlement, make it…

"The Landlady to pay me the sanction of 2x the deposit plus the return of my deposit, upon agreement of this offer."

In my experience a Landlady can be meaner than a Landlord so get this done immediately.

She will have the weekend to ponder on it.

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mr.spacemaker 10th November, 2016 @ 21:29

@david

The deposit was protected 5 months before serving section 21, but I can't prove that the prescribed information was issued, and from my further research since, the PI was definitely not issued correctly as the tenant did not sign it - they only received it by normal first class post.
My interpretation of current law was that all this needed to be done by June 2015 to comply with the Deregulation Act, or is this just with regard to the potential sanctions?

In the court papers they are also denying receiving the S21 by post. It was served in person, by first class post AND hand delivered, not sure if their stance may backfire for them as it will certainly create doubt over their honesty.

For me the real key issues in my case are:-

Can they convince a judge that one physical tenancy should be treated as three separate tenancies and that a sanction could (and should) be applied to two of those tenancies?

When the tenant asked me to take the arrears from the deposit was it lawful for me to accept this? (considering that this was first suggested before Superstrike and that the arrears exceeded the deposit before the Deregulation Act)

Will the tenant struggle to get sympathy from the judge when it is clear that I am far from a rogue landlord and that they are far from a good tenant? (especially when there have been arrears for many years)

Thanks again for all of your help - I have started the ball rolling with Anthony Gold.....

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Alexi 14th November, 2016 @ 21:19

Hi @David

I hope you're keeping well. Thank you again for your advice. I tried for a total of 3-4 months to try and get my deposit back and then got advice from shelter who informed me it wasn't my responsibility to chase it.

I sent the letter off and did not get a hostile response back. My landlady is acting unaware that it was her responsibility. She is saying that it was never her intention for me to lose money as a result of the agency change and when she emailed me asking to stop her losing further money (I stopped the money leaving my account to go to the old agency) that “I should rest assure that I will not lose anything as a result of these changes”.

She then talks about receiving an email from me asking her whether she signed anything to release my deposit (this was at 4months after the agency change - as I was still chasing my deposit at this point) and since then she didn't receive anything else from me and was waiting for me to tell her my deposit became unprotected?? (Since when is it my responsibility?? I am not the landlord). She also forgot to mention that she was informed by the new agency that I was struggling with getting my deposit back, and that I should talk to the agency at first instance with regards to the deposit.

My thoughts are that actions speak louder than words, so her intention was for me not to lose money, then why not chase it with the agency? Why not follow it up, she had 15months? Is 15 months too short? Why not reassure me when I contacted her whether she had signed anything to unprotect my deposit and tell me that I shouldn't be worried? Why not at the time put the money into a deposit scheme to help restore my faith in her at the beginning??

She provided me with an offer, either she pays my deposit to the agency who will protect it and release it as per the usual way or if I'm leaving then she will pay the deposit on receipt of my notice to terminate the lease.

She also isn't happy to provide me with a reference until the situation can be resolved according to her offer above.

I am not happy with this and she is just doing the minimum thing as reparation of what should have happened at the beginning. I will not budge in terms of my offer, can you further help me? Do I need to write something more serious or should I get a solicitor?

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David 14th November, 2016 @ 22:47

Hey @Alexi

I would drop her a quick line saying

"Dear Mrs Landlady

I am in receipt of your letter; the contents of which have been noted, but are irrelevant!

Ignorance of the law has never been an adequate defence for breaking the law.

Thank you for confirming that you were aware of my enquiries throughout the 4 months after the former agent went bust and that my deposit was still not protected nor is it now. For your information; it was NOT up to me to do anything, the law is VERY clear on this matter.

I therefore formerly reject your proposed solution and refer you back to my previous offer of a settlement; I respectfully suggest you take my offer extremely seriously and that you consult a solicitor for legal advice.

It does not matter what excuses you come up with, it does not matter that you had various agents involved, legally the buck stops with YOU.

The law is quite clear on this matter; you may read what you are obliged to do here

http://www.legislation.gov.uk/ukpga/2004/34/section/213

The sanctions for failure are detailed here

http://www.legislation.gov.uk/ukpga/2004/34/section/214

Not only did you fail to keep my deposit protected, but you also failed to issue me with the prescribed information contrary to The Housing (Tenancy Deposits) (Prescribed Information) Order 2007. You needed to do this twice and failed to do so, this failure on your part is likely to mean you get the maximum sanctions. You may even have to pay more as legally you failed on both the original Assured Shorthold tenancy and the Statutory Periodic tenancy. I understand that these are seen as two entirely different contracts under the law (Superstrike).

As a result of your incompetence I have spent months in a state of anxiety and hardship because your current agent simply fobbed me off and even told me your former agent went bust, suggesting my deposit had gone too.

I would remind you that this is exactly why this legislation was created, so that tenants deposits would be safe and Landlords would face a serious deterrent for not fulfilling their legal duty to make sure the deposit was protected at all times.

I am not looking to drag this matter out with animosity and acrimony; I made an amicable offer of a settlement. I should point out that under Civil Procedure Rules a Court will take into account your failure to accept a reasonable settlement that saves a matter from appearing before the Court and this may affect costs awarded against you.

I am now giving you till November 21st to take legal advice and accept my very reasonable offer. After which I will be issuing you with a final letter before action (which will include legal cost of drafting) and proceeding to file my claim against you which will include legal costs of a solicitor plus court fees. This may increase substantially the amount of my claim.

As explained I really want to avoid this but it is up to you.

Yours sincerely

Alexi Tenant”

The laws above have been amended a few times but quoting these will hopefully make her realise what a serious position she is in.

@Alexi I think she has handled this all wrong, I always encourage Landlords to go back with a lowish offer but ALWAYS offer to provide the positive reference. She is offering you NOTHING and trying to threaten you with no reference. In any negotiation offering nothing is just insulting!

So the next stage is as stated “a letter before action” we can draft this together here or you can pay a solicitor to do it add the cost of it to her settlement. After that if they are still in denial I like to send a completed set of forms with a final option to settle prior to filing, but you can just file.

You can get a Solicitor if you want, I can explain how to file so it is not heard on the small claims track and so costs are recoverable.

Understand that your Landlady is going through the bereavement process now, she has had the SHOCK of your letter and is in DENIAL, next will come NEGOTIATION, then ANGER possibly followed by SORROW and DEPRESSION, finally there will be ACCEPTANCE.

She has done you a real favour by confirming the facts with her excuses.

All is good thus far.

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David 14th November, 2016 @ 23:24

@mrSpaceman

My advice was to hold off on using Section 8 until you had a chance to make your offer, so not sure if I should continue to offer advice that may conflict with your appointed Solicitor.

I was doing a long post in response to previous post but I will reply to your latest to keep it simple.

5 months is good, Judges are cynical on a lastminute.com filing, so you can show you did it as soon as you knew.

You do not really need to PROVE you did the PI if you make a statement of truth and the show the court the history of late or no payments, they pretty much accept your word. It also is not critical that it is signed in these circumstances.

It did need to be done by June 2015 but that only affects the sanctions, what makes the S21 valid is the protection and PI. I think you would get 1x max as Courts take a dim view of people not paying rent.

A Court would prefer seeing a photo or video of one taped to the door and one posted through the door but again statement of truth about the various methods. You are right in that there is a “you would say that wouldn’t you” with a non-paying tenant.

There is no way that this is three tenancies, best they can hope for is 2 BUT this is a pre-2007 tenancy and dereg act covers this to be treated as substantially same. It might be different if this were a 2014 tenancy that went periodic and you failed PI twice.

NO you should not take arrears from deposit, you must leave it protected until the end of the tenancy when it will be determined by Court and/or DPS.

I think the tenant will definitely struggle to get sympathy from the Judge in this case, if you mention in papers that the agent said he seems to be seeking bailiff the Judge will feel assured that he will probably be housed by LA. This makes them more ready to turf him out even though it is my feeling he will be found intentionally homeless, a S8 Judgement makes that a fact, a S21 requires checking but he still needs to be vulnerable. Also make sure you provide a complete list of how and when the arrears were created.

Let me know if you have any more questions.

I do think it wise to do what I suggested above in my last post to you, but either way you ask that the S21 be heard together and the Counterclaim afterward.

Now about the Counterclaim; was it done as a defence on the form they send the tenant after S21 filed or did they file an N208, N244 , N001? Have they paid a court fee, are the papers stamped by a Court or filled out but not filed into Court.

Civil Procedure Rules say S214 are a Part 8 claim and should be on an N208, this should get them on the “multi track” not small claim track, this opens them up to costs.

You just get Anthony Gold to file the Section 8 and then add a request for the cases to be heard together quoting the previous case number with reason that it will save Court time and costs.

The white book notes for CPR rules often have more than the Ministry of Justice Website, I have seen these used to split cases putting the sanctions AFTER the matter of eviction, but also seen them used to conjoin cases. Depends on paperwork filed, hence my question.

Speak to Anthony Gold about their preferred strategy.

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mr.spacemaker 15th November, 2016 @ 00:57

I've been advised against section 8 again now anyway. No-one seems to trust those mandatory grounds - they seem a bit pointless!!

I've just checked back and I actually emailed the agent confirming that there was no deposit (and why) one day before applying for deposit protection. He basically told me that I had to protect the deposit, and I did it straight away. This may well now cause me problems as it creates further confusion over the status of the deposit, i.e. Why would you protect a deposit that doesn't exist? (because letting agent and solicitor told me I had to!!)

Your statement about arrears and deposit seems to suggest that tenant and I could not make an agreement to deduct arrears from deposit anyway, even though tenancy started before April 2007 and deductions were before the 2015 Deregulation Bill??

The counterclaim does not appear to be on official court papers, it's not stamped, and the only reference number on it is a claim number. Regardless, Anthony Gold have said that I must enter a defence and that withdrawing my S21 will not cancel the counterclaim in this case. I will also have to pay the costs of the other side if I withdraw the S21.

I would be very keen to get the sanctions after the eviction, but am concerned this may be difficult, as it looks like I may have to start S21 again. Will definitely be doing some more research on this anyway.

It's all very frustrating, especially when I see how mean and unhelpful some landlords are.

Thanks once more for all of your help; it's invaluable to have another professional opinion!!

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David 15th November, 2016 @ 12:50

I TOTALLY disagree with the advice you have been given re section 8, based on what you say this is classic S8.

You MUST go for mandatory.

The problem is some solicitors get used to arguing a certain way.

I gave you all the S8 grounds above and 2 that may be appropriate. I would remind Solicitor that it is your money and you are instructing them to do S8 and then to try to get cases heard together.

The mandatory grounds work if you have evidence, a Judge can't consider them in S21 except at the end, but if you bring both you get Judge on your side.

An S21 makes you the bad guy, S8 makes tenant bad guy, S8 is the appropriate law for these circumstances. You have arrears, damage to property, it is textbook.

What on earth do you mean when you say "i.e. Why would you protect a deposit that doesn't exist?"

You took a deposit, it has to be protected, end of.

It does not matter if you previously agreed to offset it against arrears, that is an accounting error. So he owes you more arrears that is all.

You said you protected it, leave it there as you cannot do S21 without it.

In these matters it is about ticking boxes and perception, do you think when Superstrike came along and we had to re-protect deposits and issue new PI that money was actually returned to tenants and reprotected? It was not, all we had to show was that the protection was now applying to the SPT. Usually all we did was issue a new PI with new dates for the SPT with the same reference number, for some we moved it from one scheme to another and changed the tenancy details. The point is IT WAS ALWAYS SAFE AND PROTECTED which is the purpose of the law.

The email will HELP you as it shows that as soon as you got advice to protect it you did it straight away.

You protect a desposit because it is the fucking law, that is why!!

You do NOT need to withdraw the S21, the only issue is the PI but if you did indeed serve it and have a copy of it then it will be your word against theirs. (I ASSuMe it had the dates of the SPT not the AST otherwise will not be valid.)

Do you think this cnut is going to make it easy for you to serve another? I doubt he will even open the door. You are better off running with what you have as long as dates on PI are for SPT.

Chances are you will be forced to do s8 in the end but it will be 4 months down the line.

You might as well hit them NOW with every bit of law that you can.

You can put in a defence against counterclaim for now, you TOTALLY dispute the allegation of 3rd tenancy.

You state the facts,

AST started on X date pre April 2007

SPT was created in May 2007

Was advised by professional agents that deposit did not need to be protected

Various law changes and requirement for deposit to be protected now arose in Dereg act Oct 2015

Agent recently advised Deposit needed to be protected (show email)

Deposit was protected on X date with DPS under Certificate number

S21 was issued on X date along with PI

Copy was sent by post for good measure on X date witnessed by biz partner.

You say that you understand that there might now be sanctions due under S21 but would ask the Court to consider the fact that you have taken advice from professionals and in addition to that the tenant told you that you should offset their deposit against the arrears of X that they owed. Whilst you understand that this does not remove your obligation it provides mitigation that Court is entitled to consider mitigation (Okadigbo & Anor v Chan & Anor [2014] EWHC 4729 (QB))

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

Now as it happens it they simply did a response to your S21 they have not "paid to play" So do not mention it for now, but once you are in Court when it is raised, you ask that the Counterclaim be delayed as they have not filed the prerequisite Court papers and thus failed CPR

http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part56

56.1(f) dictates s214 deposit protection claims as 'Landlord & Tenant Claims' thus Part 8 is multi track and cannot be heard as part of current procedure.

The issue being claims need to be submitted on a claim form (that is how they PAY to PLAY) usually N208 but can also be N244 & N001 together, the point is that there is no formal counterclaim otherwise. This will throw a District or even Circuit Judge and they will agree to not hear the counterclaim until the requisite papers have been filed, but can hear the remainder of the case (they are keen to get something done while they are there).

I have even seen cases on appeal where they choose not to hear the counterclaim till after Landlord claim concluded, even if they postpone the hearing due to lack of time, or on the basis that they cannot fully grasp the obligations/mitigation until the Landlord's claim is concluded.

You do NOT point out the failed paperwork upfront on your defence or they will just file the paperwork.

So ideally they hear the S8, order the 14 day eviction because of the arrears, you did not state above how much the arrears are but it needs to be at least 2 months and as I have stated above you need to go for all the grounds I listed (as appropriate). So if by some miracle he comes up with the arrears you still go on….

“At the date of service of the notice there were 2 months arrears, the tenant may have paid the arrears (or part of it) now but their remain other grounds:

Ground 10; there remains an amount of rent is in arrears at the date of service of the notice and this remains unpaid on the date on which the proceedings for possession are begun. Also...

Ground 11 this tenant has repeatedly failed to pay rent (showing your dates and times)

Ground 12 This Tenant has breached various other terms of the tenancy agreement, specifically X Y Z. Also...

Ground 13 The property has deteriorated due to neglect by the tenant and there are damages to the property, specifically A, B,C

We ask the Court to please grant the eviction with the minimum 14 days notice, the tenant has advised the agent that he expected to be housed by the local authority and requires a bailiff eviction.”

In the event that the Court declines to go with Section 8 then you ask them to consider the S21.

In any situation where you give people a choice you are always better off giving them two choices that benefit you, so rather than the Judge thinking the choice is shall I evict or not evict, the choice is shall I evict on S8 or S21.

It is a belt and braces approach. It gives the tenant what they believe they want (a bailiff eviction) the Judge may ask the tenant if that is the case and if they turn up they will confirm it.

If you go S8 and the tenant pays the arrears you at least get money that you can otherwise kiss goodbye to AND you can go for costs, which you may not ever get but you never know, he may win the lottery next month!

It sounds to me like you are taking advice from too many people (maybe including me) so you have to decide whether you want this to drag out on another S21 that he will do all he can to resist or go with S8 and S21 now.

It is YOUR money and YOU are the client! Make a decision and roll with it!

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mr.spacemaker 15th November, 2016 @ 21:38

lots of great information as usual - your advice is much appreciated!! i'm only taking advice from you and the solicitor and it's very useful to have two different points of view to go alongside the research that i've already done....

a few points for clarity:-

FYI in my case ground 8 is risky. due to the way the rent is paid by the council (every 4 weeks) being different to the way rent is due (on a fixed date every month), there is a good chance that the arrears could drop under two months during the process simply due to a payment coming in before the rent is due. on rent day the arrears will always be just over two months, but there will be approx two weeks every where they drop down to just over one month. very irritating.

by protecting the deposit, i have essentially confirmed that i have a deposit and lost the option to claim that there is no deposit. (even though I believed that it had already been spent on arrears at the request of the tenant). apologies for the confusion. regardless it seems that I would have trouble confirming it as 'agreed deductions' in court, so i could not have succeeded in S21 without protecting the deposit.

the deposit protection certificate has the correct date (when the SPT started) and the PI does too. my gut feeling is that even though i definitely look more favourable than the tenant from an honesty point of view, their solicitor would not have too much trouble convincing a judge that without proof you can't consider the PI served, especially when the PI ends with

"I/We (being the Landlord) certify that –
(i) The information provided is accurate to the best of my/our knowledge and belief
(ii) I/We have given the Tenant(s) the opportunity to sign this document by way of confirmation that the
information is accurate to the best of the Tenant(s) knowledge and belief"

I'm not sure what you mean when you say "S21 was issued on X date along with PI" - does PI need to be served again?

the solicitors are advising me to settle the counterclaim, even though i have have a reasonable defence and should only be looking at the minimum sanction. i'm reluctant to do this as if i settle i will have to pay the tenant immediately in order to get them to withdraw the counterclaim, but if i lose in court i will get more time and may be able to offset the arrears and damages. Or have I completely misunderstood this? i am hopeful that i will be able to make clearing the arrears part of my offer.

they then say i should withdraw the S21 (paying the other side's costs) and make a new one using the standard procedure (at a huge cost).
this will guarantee me possession (in 4+ months) but I will be out of pocket to the tune of £10k+ with most of that being spent on legal fees for both sides.
at the end of all this i will get my house back (as a wreck), and the tenant will leave with £2k+ of arrears, with £2000 - £3000 of my money in their pocket and an S21 eviction that may not even be interpreted as 'intentionally evicted' so they can still get rehoused by the council. bah humbug.

i could fight the counterclaim in court without making an offer to settle and try to get an S8 heard at the same time, but it's very risky considering that there is so much grey area and that i could be paying the costs for both sides.

i have asked the questions regarding pursuing the current S21 and possibility of S8 at the same time - any further feedback would be very much welcome as I need to make a decision tomorrow....thanks again!

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Alexi 15th November, 2016 @ 22:22

@David

Thank you for composing such a lovely letter. Just to clarify the point where you say that she failed on both the original AST and the SPT. I thought she failed on protecting the SPT only, as the second AST issued to me included the original Mydeposits number on it. Did the landlady need to issue me with a brand new Mydeposits number with the second AST? Sorry if I'm being stupid, just wanting to make sure I am following you correctly :)

To summarise my tenancy as all these messages I've sent you may not have been clear, I'm sorry!
First AST was issued Nov 12 with a Mydeposits protection scheme in place - protection happened within 30days. This ended and then the second AST was issued in May 14 which noted the original deposit protection scheme number on the agreement (nothing official other than the AST was given to me), this ended in Nov 14 and rolled onto an SPT with no protection scheme given to me then the original Mydeposits protection ended in Sept 15.

Thank you again,

Alexi

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David 16th November, 2016 @ 00:48

Hi Alexi

Sorry not in AST, well thus far I have ASSuMEd that PI was correctly served on that initial tenancy.

This is not just deposit reference it has to tell you how the scheme works, how to get your deposit back, and include detailed info:

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

For a 2012 tenancy it had to be served within 30 days

There were 2 PI failures and 1 failure to protect deposit for a significant time and to make matters worse the agent went bust and you were not provided the information when requested for 3 months, your landlord confirmed she was aware of your enquiries but ignorant of her obligations (not a sufficient excuse under the law).

It is easier to see it as a series of events, some of which trigger obligations based on law at the time and/or as amended by new law or case law.

1. 2012 started tenancy - 1st duty to issue a PI,

2. May 2014 Another assured shorthold tenancy agreement started; tenancy is substantially the same, nothing triggered by event.

3. Nov 14 AST ends and an SPT is created by statute, triggering an obligation to re-protect deposit and issue new PI (Count 1 in my previous message)

4. Moved to new agency July 15 - nothing triggered

5. MyDeposits say became unprotected in September 2015 - triggered a requirement to protect the deposit and issue new PI (Count 2 in my previous message)

6. Deposit remains unprotected 14 months later.

It is possible to seek sanctions for each failure because they are legally two contracts, so potentially 3x the deposit for each tenancy agreement.

Hope this helps

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David 16th November, 2016 @ 03:14

@spaceman

I will try to keep this brief as raking over same coals.

There is a saying; “it is not what they tell you but what they don't tell you that makes a difference”.

You said he had arrears going back years which suggested it had built up and was way more than 2 months.

Rent due does not change day to day or week to week, it changes when the date in the contracts says it becomes due.

HB is usually paid 4 weeks in arrears so that would not be considered arrears at all, the Councils pay 4 weeks in arrears to cover themselves.

So based on this it does seem that you do not have a strong S8 case at this time.

Under the law you always had the deposit; the law specifically states that you can't agree with a tenant to circumvent the obligation. You can't call it something else, you can't pretend it is a holiday let, you can't offset it and if you agree to do so, it is just an accounting error.

The deposit has to be protected in one of the three approved schemes.

There was never an opportunity to say there was no deposit.

Nothing can get a landlord out of their obligation to protect which means you are right when you say

"so i could not have succeeded in S21 without protecting the deposit."

I trust that the information IS true to the best of your knowledge.

I have had a tenant try to use the "Landlord did not give me opportunity to sign this document" defence.

It was of course rejected by the DJ because Act does not define what that means or impose a date. So it was argued that by posting through a door the tenant had an opportunity to sign it and send it back the next day, next week or next month. In fact the failure to dispute the PI details is reason to conclude the tenant accepted the accuracy to the best of the Tenant(s) knowledge and belief.

You read these clauses and assume they are set in stone, a Judge reads them and asks "what did they mean when they said this"

In some housing appeals you even see the Judge saying if they said "has" they must have meant this and if they said "was" they must have meant that.

Now when I said "along with PI" I was describing a sequence of events as they happened in your case in date order as part of you stating the facts. I do not have the dates for those events so I put X date.

Now to the advice given by your solicitors, I provide what follows based on what you have told me here but like with the S8 I suspect they have been provided with more detailed info.

So first off S8 is dead as there is not the 2 months of arrears, you could go in on the other grounds but you need mandatory ones to make things stick. Go to the S8 post on this site that I linked to above and check all that apply.

I would fight the S21, you have paid for it already, you put in your defence as stated above, remember that this is the place to tell the Judge things, you list every event in date order, you include the date the arrears started, you include when the tenant told you to offset even though it does not help you avoid your obligation, it helps you show there was confusion.

You state the date communicated that he wants to be evicted so he can get a bailiff eviction and get social housing.

You also state that tenant has caused damage to property and have a quote ready that estimates cost to repair.

So what is losing in Court, kicking out the S21 or paying 3x the deposit?

I think your S21 eviction has a reasonable chance of success, you protected the deposit months ahead and issued PI.

You did not state rent amount but I am guessing it was £2k, so a 3x sanction is a £6k risk, however as you have to expect £2k min sanction then the risk element is £4k if you carry on.

If you had a S8 it would be easier to offset, but you can always ask a Judge if you can offset arrears.

Now with regard to paying their costs, I would argue that they practically asked you to issue S21 so they could be evicted by bailiff, you even think they did the damage to the property to encourage you to evict.

Did your Solicitors say there was a 3rd tenancy as they suggest, because I do not see it?

I think the counterclaim is a vexatious and frivolous claim brought in bad faith.

If it were me I would roll the dice on it.

So when the Court discusses the matter of eviction, you show the paperwork is in order, you state that the tenant has expectations of being housed by Local Authority but they have encouraged him to delay and he has asked for bailiff eviction to enable being taken into temporary housing.

Judge will probably ask the tenant if that is true, tenant can't really lie.

I would dispute the counterclaim as I said above, dispute the 3rd tenancy and just state the facts with mitigation and all the shit the tenant has done.

Then when it comes to that being discussed in Court

You ask the Judge to postpone that element because they have not followed CPR and used the proper forms.

Now be aware that I am saying that because you said above that they are not Court forms, i.e. no N208, N244, N001 etc on the paperwork??? Your solicitors have seen the paperwork so it may be in order, I can only go by what you say here.

So assuming they have NOT used the proper formal claim forms I would ask that the Judge instruct the tenant to file a proper formal claim using the proper forms as I explained in posts above.

In Court you can say that if they follow CPR they will have an opportunity to settle the matter without legal costs or wasting Court time.

If the Court says they are going to hear the case anyway then I would seek the lowest sanction, I would say that there is mitigation because the law changed several times and you relied on professional advice from your agent. You show the email and you show the High Court judgement above that says they are entitled to vary the sanction. They know this but by reading it they see a similar defence of relying on an agent which is what you did.

As I said, your solicitor has seen paperwork so you have to ask them why they think you should pay up?

You have a chance to evict the tenant sooner, the risk is £4k of sanctions over what you expect but that could happen if you issue another s21 or give in.

If you get the guy evicted you are months closer to a higher rent.

It depends what your risk appetite is like, better to fight I think.

You are going to get your house back as a wreck no matter what, you can always issue a small claims civil case against him for damage to the property, keep it under £10k so it goes on small claims track and he can't claim costs.

On the bright side you can still contact the Council and say that in your opinion the tenant is intentionally homeless due to arrears and damage to the property.

Again you are not telling us what makes this person vulnerable so I can't see why they would even get temporary housing.

They would need to tell the Council they have medical conditions, the Council would then have to investigate. However, at the interview they are asked about arrears and all other reasons the Council can use for intentionally homeless.

Even if they were provided temp accommodation, they may end up in a bedsit for 6 weeks and 2 years in a place they have to share bathroom and kitchen with an undesirable.

They will only be entitled to bid on 1 bed flats and they have to bid on what is available or the local authority can take bidding away from them. They may end up in ex Council dump or they may get a studio in a modern but awful special facility.

I think you clarify with solicitor what the position is about why they think you should roll over then make a decision.

Good Luck!!

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mr.spacemaker 16th November, 2016 @ 09:23

thanks so much for the swift response david, i feel so much better prepared to make a decision today!

the arrears go back over 3yrs but they are in the form of a small shortfall every month rather than arrears of whole months. there are several occasions where rent payments have been significantly short but it has always been rectified eventually. interestingly enough, this has always been because the tenant will not respond to the council's letters, so they have to suspend payments.
if i wait a couple of months before bringing section 8 then mandatory ground 8 (arrears), should not be a problem (unless they still have a big chunk of my money from the sanction!), but it looks risky now.

are you saying that rent day is the only relevant day for calculation of arrears? i was under the impression that once you get to court with S8, it is the arrears on the day of court that matter?

i am very pleased that you have had previous success with the PI issue - this makes me feel that it's at least worth fighting with my current S21. i want to go to court as this is my opportunity to share some of the relevant information.

solicitors are confident that there is no third tenancy.

i agree that the counterclaim is a vexatious and frivolous claim brought in bad faith. it's also a waste of the court's time and of legal aid.

tenant is suffering from depression and i assume claiming benefits as disabled. i'm aware that they would be in a pretty bad housing situation when evicted but not sure how clear this is to them and whether it will help with negotiations - it certainly didn't help before, when i was offering a chance to stay in the house!

current feeling is that i should not waste too much time trying to settle, and any settlement should definitely involve clearing the arrears. i may even consider a settlement that allows tenant to stay in the property (with increased rent but still well below market rate) - if i do this, should i make a new tenancy agreement (with no deposit) and is 12 months the minimum?

if settlement is not successful, i should defend the counterclaim (expensive, but unavoidable now), and proceed with current S21, arguing that PI was served (there was no reason for it not to be served!) and hoping that all of the mitigating circumstances from the counterclaim defence will work in my favour for the eviction (and the judges decision on whether PI served correctly).
it is clear to see that i am not the rogue here, so i am hopeful. the main risk is the increased legal costs if i lose, as these could far outweigh any sanction.....

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David 16th November, 2016 @ 10:56

the arrears go back over 3yrs but they are in the form of a small shortfall every month rather than arrears of whole months.

So are if there is a small shortfall is it because your rent is above LHA for the level of property he requires?

I.E. If he is by himself he needs one bed but if house has three they will pay the LHA rate for a 1 bed self contained flat which is all he needs.

If so there is no point increasing the rent and allowing him to stay, also why would you risk further money.

I do not think there is much opportunity to settle the eviction because he needs bailiffs, but maybe you could say that you are reliably informed he will likely get 1x the rent as a sanction. If he is prepared to settle that claim NOW in full and final settlement then you will allow him to keep half and put other half toward arrears. Plus give him good reference and not report his negative behaviour to Council.

He may get 42 days while they investigate his depression but it will have to be serious and under treatment for some time. Usually by itself is not enough.

Regarding rent due, think of your water bill you owe nothing until they issue the bill. With a contract it will say the rent becomes due on a certain day and usually it is paying for the month coming anyway. So if your rent falls due on 1st you issue proceedings on the first or second day of month. Be aware to avoid any bank holidays that may make Council pay early.

It IS the arrears on day in court that matters but that is why you fall back on repeated failures. The difficulty you face is if it is not 2 months you are on thin ice. He will say that it is not him that has created the arrears but the nature of the way the Council pays direct.

He will not be classed as disabled because of depression but either in WRAG group or Support Group. 1st would mean he can do some work related activity, latter means can't work. Best money he is on is going to be around £500 a month.

You can look up the LHA rate for the property online just google LHA Barking if the property was in Barking for example. You then want to consider if he is living by himself that his max rent will be the one bed LHA rate.

If he trashed your property you really need to recover your costs and that means repairs and a new tenant at market rates.

I doubt he wants to carry on anyway, if by some miracle he can get social housing he should grab it while he can. Personally I have seen people wait 2 years (the max) in temp housing, I have seen local authorities stuff 50 year olds in supported living designed for lone pensioners who need on-site support. They also shake the tree by denying claim and giving 2 weeks to appeal.

You need to creare scarcity with any offer of settlement, you say you have instructed best lawyers in UK on housing matters and before they start racking up time you want to give him a one time only offer to settle this matter.

6 months is minimum tenancy with S21 issues on 4 months and 1 day as earliest day but why the hell would you put yourself through that?

He is better off in social if he is confident he can get it, let him, support him.

In negotiation you have to figure what they need, he needs positive feedback from you to Council. That is your biggest bargaining chip.

If it were me I would want to defend counterclaim get is resolved as mentioned in my previous post.

It always looks good if you attempted to settle, he risks being seen as moneygrabbing.

You are going to have legal costs no matter what, you already paid some and the sanction is not going to go away. Why the hell would you roll over and die, paying their costs for a try on?

I would rather fight and have my day in Court.

There are no repairs you have failed to fix, Gas certificates always done. Been extremely flexible to your cost on arrears but reality is that this tenant cannot afford to live in property and has damaged it.

Make it look as if you are doing a favour but always try to settle before, I might even be prepared to pay him the 1x and let him off the arrears just to keep legal costs down. You still get the eviction and make the agreement say that arrears forgiven if he is evicted or leaves by Dec 31st or whatever your target date is.

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mr.spacemaker 16th November, 2016 @ 12:53

the shortfall is because of a deduction, yes. bedroom tax due to child now considered non-dependant. council have told me that the only reason the housing benefit is not even lower is due to the length of the tenancy and therefore upon moving the amount of benefits would be greatly reduced.

LHA for a one bedroom property in the area is way below market rate. LHA for this type of property (2 bedroom) is slightly under current rent (which has not been increased in over 7yrs). Also way below market rate obviously, especially considering it is a house and not a flat.

the council have already said that rent could potentially be increased by around 20% and that it wouldn't be affected by LHA, only the 'local reference rent', which is the average for 2 bedroom properties in the area. so there is an incentive to me for putting off the eviction as I will get some much needed breathing space financially and also be able to make sure that the next section 21 is watertight. the downside of a new contract (which i should probably avoid) is the risk of them being able to argue revenge eviction due to repairs (due to the Deregulation Act). even if that is not justified, they will still be able to argue it and cause problems with the S21.

from a personal point of view I obviously want this person out of my house and i want to rent it at market rate, but from a business (and especially cash flow) point of view it wouldn't actually be that bad to put off the eviction 6 months, a year, or even indefinitely IF the rent could be increased to a sensible level and the tenant takes their obligations a bit more seriously. there would still be a shortfall every month due to the deduction, but it would be a shortfall on a higher rent and the tenant may even consider paying some of their rent if they wish to stay in a two bedroom property (which I'm sure they do).

regardless, if i settle the counterclaim and this involves clearing the arrears, their solicitors should advise that this puts them in a much better position for social housing and creates a further significant delay (no arrears, so S8 not really an option and S21 will have to start from scratch).
it also gives them the advantage of having no deposit for me to subtract damages and future arrears from, which i'm sure they will be very pleased about.

taking a settlement which involved giving up possession would be a very risky move for the tenant but they might be feeling lucky, especially if they have already accepted that a move to a cheaper area may be inevitable. they obviously have a very good knowledge of how to work the benefit system and cold hard cash would obviously be very appealing.

i don't think forgiving the arrears on S21 is an incentive, as the tenant definitely won't pay them anyway. only incentive would be to help them claim NOT intentionally homeless, and vacating early would probably prevent this, so it's a bit of a catch 22, no?

so in the end it seems safe to assume that i should give up on S8 altogether, as the chance of success is limited. unless of course i need to move back into the property myself, which may even be necessary if the legal costs increase any further.

next step is definitely to make the settlement offer and hope that the tenant gets sensible advice from their solicitor.

after that it's fight fight fight i guess - definitely with the defence to the counterclaim, and maybe with the current S21......

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David 16th November, 2016 @ 22:56

@Spaceman

Forgiving the arrears on S21 IS an incentive because it means the Local Authority will not say he made himself homeless.

Don't say in writing that you will contact Council just imply with your settlement offer that the benefit will be he will not risk eligibility for social housing due to arrears.

I have seen case where a LA finds a mother and two children who were crammed into a one bed flat ended tenancy without arrears intentionally homeless. They got the six weeks, meanwhile the Council contacted social services, put the child that was 16 into social care facility and got the father (estranged) to take other child and they made her homeless.

So if he is smart he would accept settlement, he may be seeing £ signs but be misinformed.

I think you would be nuts to keep him on in any capacity.

Add to your mortgage, do it up to a high standard and get a top end rent. That will be the fastest way to recover financially.

I am not going to go into LHA, you said the two bed rate is already below the rent you are currently charging, so in effect your property is not suitable for anyone on benefits unless they can show they have other funds (not basic benefits).

If the daughter now lives with mother he can't claim room for her. So as I said he will get LHA for one bed. I have seen tenants with 10 year old tenancy have their rate reduced. You can read how it works here

en.wikipedia.org/wiki/Local_Housing_Allowance

His solicitors will act in their own best interests to get costs.

I said you settle arrears with his sanction, I said nothing about deposit, that remains with DPS till tenancy ended at which point you can ask DPS to deduct damages.

The legislation that says you have to return it does not say you can't offset damages and the DPS have an arbitration system if he disputes it.

I would not go near his solicitors, I told you in much earlier post to go see the guy and settle this if you can. Have a settlement agreement with you, keep it personal and friendly. Say the agent said he wants social housing and you are keen to facilitate that but you can't be doing that and fighting his Counterclaim. So you have come to see if you can reach an amicable solution regarding counterclaim. They lay it out as detailed above.

You seem to be totally confused despite the fact that I have told you that THE SANCTIONS AND THE VALIDITY OF YOUR CURRENT S21 ARE TWO COMPLETELY DIFFERENT THINGS.

I told you to settle the sanctions but carry on with the S21.

He WANTS the S21 and Bailiffs, you said so yourself.

So WTF is all this "and S21 will have to start from scratch"

Please go back and re-read what I have said because I am not going to repeat it.

I have given my advice but you seem uncertain, make a decision and run with it.

Offer to settle sanctions as detailed before

Try to get rid of tenant using current S21, I have seen loads of these go through with less. Tenants always deny receiving shit, it is their way off the hook. Judges know this, only the anal retentive throw such cases out. I have even seen cases where a Judge does not follow law on behalf of tenant because he knows tenant will have to appeal and that is way more money upfront.

I told you the case to quote, I told you how to bring the matter up with the forms once in Court.

I really do not know what more I can do, you have a solicitor they will take your instruction, or you can go their way.

My advice is to get rid of tenant, do the place up to a very high standard and get a top end rent for it. You would be surprised what some people will pay.

One final choice you have is to say to the guy that you are moving back in and will have him as a lodger in 2nd bedroom, no S21 needed if you live in! I AM KIDDING ON THAT LAST BIT IN CASE IT IS NOT OBVIOUS.

I think this has to be my last post on this matter of yours because it is making you indecisive and you need to decide. You have all the info so re-read it and make a decision.

Good Luck!

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mr.spacemaker 17th November, 2016 @ 00:20

@david

the following info is just to update you and anyone that finds it useful at a later date, i'm pretty clear on things now and all of your advice has helped a lot with some of the grey area. i don't need anything else unless you feel i've got something badly wrong, and no more questions :-)

i understood perfectly that forgiving the arrears on S21 is an incentive but like i said, the only incentive is to reduce the chance of being found intentionally homeless.
sorry if i wasn't clear, but what i meant was if they give me possession as part of the settlement they could be considered intentionally homeless anyway so they would probably rather keep the money rather than pay the arrears, even if they know it's a risky move.

have decided against offering a new contract now anyway, was a silly idea!
will be going with settlement offer and then defence if not accepted. have already instructed solicitors to proceed with this and prepared my offer (your previous message helped with this, so thanks again).

SPT started after April 6th 2007 so deposit must be returned before S21, otherwise it is invalid.
I missed the June 2015 deadline to correct things so late protection & PI was/is not an option - I have to withdraw current S21 and refund deposit before re-serving (ideally with deductions as part of counterclaim settlement offer).

this is the only thing i am not sure of from your advice as it contradicts the other info i have found and the advice from solicitor. these superstrike tenancies throw up a lot of different info though.
it could be a moot point anyway as hopefully they will accept a settlement, and the settlement will include return of the deposit anyway.

an unexpected benefit is that legal aid may well be withdrawn once the S21 is withdrawn, therefore it will be very difficult for the tenant to continue with the counterclaim. this should help with settlement negotiation.....every cloud.

i can't see the tenant myself so it must be through the solicitors unfortunately.

i already understood that sanctions and S21 are two separate things - "after that it's fight fight fight i guess - definitely with the defence to the counterclaim, and maybe with the current S21......"

as expected, your standard advice is spot on anyway - SETTLE!

hopefully the tenant's solicitors will advise settling too - they must realise that a sanction of more than 1x is unlikely and that ending the tenancy in good standing could be much more valuable than a sanction in court. hopefully they will also realise that a settlement of a similar amount or more makes much more financial sense than a fight in court to achieve the same ends.

thanks once again, i really mean it when i say your advice has been invaluable as it has helped me focus on the key issues, encouraged me to ignore the irrelevant ones, and made me more confident of my position.

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Alexi 18th November, 2016 @ 14:00

Hi David,

Thank you for clarifying that, I was a little confused. I sent the email and my landlady got back to me and informed me that she will discuss with her solicitor. In the meantime, should I pay rent? It is slowly creeping up to being 1 month since I was supposed to pay my rent but as stated in the letter I was withholding this...

Thank you again and again

Alexi

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Maxine 20th November, 2016 @ 23:31

Dear David, I have read through some of your very helpful comments above and I wondered whether you could pass some guidance on my situation which I have unfortunately found myself to be in.

Following the death of my aunt I inherited her property and decided to rent it out. I had never rented a property out before and In 2013 a tenant moved in under an AST. The LA (which has since proved to be entirely unprofessional) corresponded mostly with my son in relation to the setting up of the tenancy as I had a personal matter at the time. The LA signed the agreement on my behalf and I received (via my son) the tenancy agreement, although it transpired to be just the last page of my agreement (the signature page) and the first page of someone else's! Therefore I did not see the clause regarding the need for the deposit to be protected and I have no aware of the law. I received a weird version of the full agreement several days after it was signed but the signatures aren't clear (again i received this via my son) actually only received the contract in proper form when it came to the LA enquiring as to whether the tenant would be staying on or giving notice at month 11.

Fast forward 2.5 years later, during which the tenancy converted to a statutory periodic, the tenant gives notice and moves out in (June) accordance with that notice. The tenant caused damage to the house and only upon discussing with a friend did i find out about the requirement to register the deposit. I immediately returned the deposit in full.

The ex tenant sent a letter before action to me claiming for 1-3 times the deposit under the AST and the statutory periodic (so up to 9,000). I looked into superstrike and see that it differs from my case because the issue in supersrike was whether s.213 applied following the change to a statutory periodic but my argumnt is that as it already applied in respect of the ast it cant be said to reapply as it was already supposed to be complied with. Would you agree?

Do you know of instances where a landlord post 2007 has found themselves penalised in respect of an ast and under the statutory periodic?

Also I wondered where, in your view, you consider my culpability to rest?
- I am not a professional landlord
- It was my first let
- I was not advised by letting agents to protect
- The agreement was signed on my behalf by the letting agent without prior sight or the agreement and without being provided with information re protetion
- I did not receive the tenancy agreement until several days after it was signed on my behalf
- the tenant caused damage to the property
- the deposit was returned in full (but never protected and no PI served)
- I was a good landlord - good with communication, complying with gas checks, carbon laws that were introduced, and dealt with an early issue regarding the fridge quickly (no other issues arose)

Also do you think this is a small claims matter as I read somewhere that land lord and tenant claims over £1,000 isnt small claims?

Thank you in advance for your help. (apologies for my typing, my laptop is playing up!)

Maxine

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Leigh 21st November, 2016 @ 07:21

Dear David

I wonder if you can give me some advice on my situation? I rented a property privately for five years with my three young children and always paid my rent on time. The landlord served me a section 21 and I moved out. I had paid a deposit of £1600 at the start of the tenancy.

I left the property in what I thought was very good clean order. Unfortunately the inventory check was very harsh.

The landlord is using this report to his advantage to deduct 1,000 from my deposit for damages. The prices he has quoted seem to me to be vasty overestimated. For example - the toilet seat was slightly loose - charging £20 for repair. The smoke alarm was not working (probably just needing a new battery) and he is charging £20 for this. One stain on the kitchen and his charging me £150 for replacement of the flooring. Etc

A large amount of the things are wear and tear which could be expected after a long tenancy with a young family (in my opinion). I believe he is using this money to refurbish the property at my expense and let it with a higher rent.

I am raising a dispute about this with the tenancy deposit scheme and expect that many of these claims will be rejected and I will get a some of my deposit back.

However when I checked my paperwork I realised that he had only protected £1400 in the scheme rather than the full £1600. (I had not noticed this at the time.) This means the deposit scheme can only adjudicate over this amount of money. Essentially the additional £200 has just disappeared.

I had not noticed the error at the time and had signed the paperwork.

I contacted the landlord to ask what happened and he said it was an admin error but he would not return this money because of the alleged damages to the house.

I have now sent a letter before action requesting return of my deposit and am awaiting a response. In the meantime I have raised a dispute for the amount of deposit which was covered.

Do you think I have a strong case here to get my £200 returned in addition to whatever the deposit scheme rules the landlord must return to me?

If the landlord refuses to pay back the £200 - would I have a strong case with the court to claim back this amount and compensation?

I am not interested in making any money from this - I just want my original deposit back or at least most of it with some reasonable deductions. As a single parent to young children I really need this money.

Im addition to this, I was not given the prescribed information about the tenancy deposit scheme (only the receipt). I wouldn't usually care/ make a fuss about this, but under the circumstances would this add to my case?

Any advice is appreciated as I can find lots of info online about landlords not protecting deposits but very little for landlords only protecting part of the deposit.

Thanks,
Leigh

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Autumn 27th November, 2016 @ 15:55

Hi there

My situation is slightly different to the others described here. Neither my tenants or I wish for them to leave the property at this stage, however I have realised that I should have protected their deposit and failed to do so. Their AST started 18 months ago, so clearly I can't comply now.

I have been to see the tenants and explained that I need to return their deposit to them, and that I may also need them to surrender the existing tenancy, and if that is the case I will re-issue a new one so that it all happens on the same day, and there would be no actual need for them to move out. The tenants are lovely and perfectly happy to do whatever is necessary. They are just waiting for me to put together whatever paperwork is necessary.

To be honest, I am not concerned about taking a deposit from them. They look after the property, and are insured appropriately, so any unexpected damages will be taken care of. So I'm quite happy to draw up a new tenancy agreement which doesn't require a deposit. But I do know that if we roll on with the existing tenancy that I will still be on the wrong side of the law.

Could you please advise what paperwork I need to draw up and get signed that will enable me to correct this situation?

Thank you

Autumn

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Simon Pambin 27th November, 2016 @ 21:08

Hi Autumn,

Is there some reason you can't just protect the deposit and serve the Prescribed Information now? I wouldn't rush to create a new tenancy, especially if your existing one started prior to October 2015.

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David 29th November, 2016 @ 20:41

Hi I hope you can help me. My ex tenant who recently left has sent us a letter from a legal entity to say she wants 3x her deposit because we didn't protect her deposit. This is correct, we didn't but she was our first tenant and we were very green. She has received her deposit minus her electric and gas money which she asked us to deduct. I'm very hurt by her actions as she repeatedly paid her rent late and was very messy. Our property is rented out room by room. What should we do? Do we have a leg to stand on?

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Simon Pambin 30th November, 2016 @ 08:58

Hi David,

Assuming she wasn't a lodger in your own home, then you don't have a leg to stand on. However, 3x the deposit is the maximum a court can award and, given your naivety and otherwise good behaviour, they'd be very unlikely to award that much if it went that far. If you negotiate you should be able to come to an agreement somewhere around 1x the deposit. Above all, don't take it personally: think of it as an expensive education, like Eton but without the fancy uniform. Take a look at this blog entry for how to go about it: http://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

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Mark Baxter 30th November, 2016 @ 12:37

Hi,
I have had a ex-tenant move out of my property in England and we are in negotiations over the amount of deposit payable to each party after deduction of damages.

I registered the deposit late with DPS but in time with a recent 6 month contract signed by the tenant before they moved out. I however had the deposit still from the previous agreement, an oversight on my part for not registering it sooner! Does this reduce my liability in anyway? Or is my situation similar to David's?

I am unsure whether the ex-tenant is aware of this but has recently asked how the deposit was protected and the dates.

Thanks in advance for help and advice, articles/forum's like this are proof of the good people in the world!

Regards,

Mark

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