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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297 Comments- Join The Conversation...

Showing 247 - 297 comments (out of 297)
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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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Sarah David 4th December, 2016 @ 00:38

Hi

The advice above is very helpful and I was wondering whether you have any advice on my situation. I am a solicitor but do not specialise in property law. I rented my second home to a couple with four children in March this year. They usually paid the rent each month albeit a few days late. In August, they informed me that they were struggling to pay that month's rent. They eventually paid it. At the end of September, after much chasing for September's rent, I was told that the couple had split up and only the mother and four children were living in the property. We were worried and went to her immediately. I called various people to try and help her financially and apply for council benefit. Despite us helping her, she only applied for benefits on 19th October. She has not paid September nor October's rent. She doesn't answer phone calls, only texts, and only updates us of her benefits application when we chase her. Her benefits application has been accepted but is not sufficient to cover the full rent. She seems to think she can make up the rest each month using her other benefits but I'm not sure. She doesnt have sufficient funds to pay the arrears. We have said that we would give her deposit back and forgo the rent arrears if she moved out by 1 January 2017 but she said it's not enough time. We only protected her deposit in September. As an aside, I did go to the house and her other half opened the door! I'm not sure if they are together or not! Should I issue a section 8 notice or give her until end of January to move out.

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Simon Pambin 4th December, 2016 @ 15:08

Hi Sarah,

Well, you've made a right goblin's knickers of it and it's going to cost you, but it's not the end of the world, just a piquant reminder of why it's wise to Read The Friendly Manual before you embark on a project. At a pinch, it might even count as part of your CPD requirement for the year!

You protected the deposit late so you'll be liable for the usual penalty if your tenant brings an action against you. It's a fact. It's too late to make it better so let's just try not to make it worse. Did you serve the Prescribed Information when you protected the deposit?

If your tenant is two clear months in arrears you have grounds for a Section 8. However, a Section 21 would be harder to argue against, assuming you've got all your ducks in a row with regard to deposit protection, PI, EPC, Gas certificate etc. Am I correct in assuming the original tenancy agreement was for 6 months? Mind you, given that the minimum notice on a Section 21 is two months, there's not a lot in it anyway. I reckon the tail end of February is the soonest you'd be looking at.

As regards the rent arrears, you can still seek to recover those from either party to the tenancy. If your tenant has few assets and little income, it's often not worth pursuing. Again, I'm assuming you don't have a guarantor in place or any rent guarantee insurance. For future reference, they're worth having!

In the meantime, be very wary of doing anything that might be conceived as harassing your tenant (you might want to mug up on the concept of Quiet Enjoyment). Too many visits or even too many phone calls could play the wrong way. "Second home owning amateur landlord solicitor hounds single mum of four kids onto the street in the middle of winter" probably isn't the story-line you had in your head when you got into this business.

You may even find that an hour or two with a property solicitor is worth shelling out for!

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Sarah David 4th December, 2016 @ 22:31

Thanks Simon. Yep, I served the PI and have the EPC, gas certificate etc in order. Yes it was a 6 month fixed term tenancy. We have 3 months of rent arrears now so have text her to ask when a payment would be made. Probably no more than 2 to 3 times a month. Is that viewed as harassment? Are you suggesting we do not try to contact the tenant to settle but simply issue a section 21 notice or section 8 notice? Is obtaining an order under section 8 not quicker?

Thanks in advance

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mr.spacemaker 5th December, 2016 @ 00:28

Hi Sarah,

Tread carefully, I have been in a very similar situation.
When I started the S21 proceedings in court my tenant got legal aid, which she used to bring a counterclaim for late deposit protection.

I've been advised against S8 several times, mainly because it's not guaranteed and there is too much grey area. If I were you I would give the Section 21 notice as soon as possible just as a precaution but as Simon says, you must be absolutely sure that everything is in order, especially with regard to deposit protection and PI.

Prepare yourself for the fact that you will almost certainly have to return the deposit and a 1x sanction (maybe even 3x) and have a serious think about a settlement offer. Hopefully you can find a way to offset the arrears against this if it goes to court, but obviously that will go out of the window if you negotiate a settlement. Your main aim should be to get them out as soon as possible rather than to 'win', as you won't get any money from them anyway...

Good luck, hope you get your house back soon....

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Autumn 5th December, 2016 @ 08:17

Hi Sarah

I am sure that both Simon and Spacemaker are more experienced than me, but it is my understanding that a Section 21 notice cannot be served until after you have returned (and the tenant has accepted) the deposit, in the situation where the landlord did not protect the deposit within the prescribed time.

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Sarah David 5th December, 2016 @ 08:49

Thanks Autumn and Mr. Spacemaker. I understand I will have to pay the penalty and probably 3x given I'm a lawyer and should have known better. I just want the house back. That's my priority. We are trying to settle but they just don't respond to messages and she doesn't like speaking on the phone to anyone. I'm happy to waive the rent arrears, pay back the deposit and give her say 3 months to find a new place. She just doesn't respond and it's so frustrating. I will speak to a lawyer on the section 21 notice Autumn as I'm not sure that you need to return the deposit, I thought it just needed to be protected.

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Sarah David 5th December, 2016 @ 08:52

Mr Spacemaker- out of interest, what penalty did you receive and we're you able to offset the rent arrears?

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Autumn 5th December, 2016 @ 08:57

Sarah, if she's not responding, it could be because she is hoping to be evicted. There are reasons why she might want this to happen:
- because she wants to sue you for unlawful eviction.
- because she can't get social housing if she is deemed to have made herself homeless.
In the second case, if she agrees to any of your proposals she will not get help from the council.

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Sarah David 5th December, 2016 @ 10:52

Thanks Autumn. I'm not sure to be honest. She just had her application for benefits approved so should be able to get a good property. She seems to get quite a bit. She isn't the most proactive of persons or the most Street smart. Her boyfriend used to do everything for her and now I think she is struggling with the whole 'I have to do things by myself now'. I want to be fair as I know she has been left by herself with 4 kids. Her mother even told us that she is quite lazy and slow with things getting things done. We had only liaised with the boyfriend to date and he was brilliant to deal with. That's why we chose them in the first place.

It may just be that we proceed with section 21 notice and take the penalty on the chin. Hopefully, we would be able to set off some of the arrears against the penalty.

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Simon Pambin 5th December, 2016 @ 13:52

It would be preferable to settle any penalty for non-protection out of court. You're in a reasonably strong position in that you're prepared to write off several months' rent (which, realistically, you probably weren't going to get anyway!) in recompense for the failure to protect and it's in your tenant's interests if you "clear" some of the arrears and thus don't go down the Section 8 route at this stage. If she's evicted on a Section 8 for non-payment of rent then the local authority will regard her as having intentionally made herself homeless, which pushes her way down their priority list, whereas with a Section 21 it's more likely to be regarded as all the nasty landlord's fault.

It you haven't already done so, have a read of:
http://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

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Ali 29th December, 2016 @ 21:52

Slightly different query from a landlord , the property I own was let through an agency who wrote up contracts but went bust a couple of years later. Owing lots of money,to lots of landlords this was sorted through the insolvency agency but now we have found out that they actually didn't pay in the tenants deposits , we have been in touch with the insolvency department and the current agency and are getting a bit of a run around and unclear information. Can you please advise as to what to do ? We just want to do what's right for all concerned. Thank you

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mr.spacemaker 16th January, 2017 @ 12:26

@Sarah David

I'll post a proper update of my personal situation soon, but in the meantime, I'd highly recommend that you settle out of court. Unfortunately this will inevitably be an unfair figure, and one you are not comfortable with, but it will be cheaper in the long run as the vast majority of the costs are in the legal fees.

I'd advise against starting the eviction process as this may entitle the tenant to legal aid, which you don't want for obvious reasons.

It's true that if she accepts any settlement that involves her giving up possession it will probably make her ineligible for social housing, BUT this won't really matter if the amount of the settlement is enough to get her into a new property in the private sector.

I would base any settlement on her giving you a valid notice to quit, and I would suggest offering 2x the deposit in return. If this doesn't work then offer 3x or even 4x, with half paid on receipt of the notice to quit, and the rest when she leaves the property.

4x the deposit is likely her best case scenario in court (deposit plus 3x sanction), but she risks having arrears set against this so an out of court settlement will appeal (as will £££), even if she has to agree to give up possession.

Although 4x the deposit is your worst case scenario, it's not as bad as it seems, because you avoid all of the legal costs (especially as you can write the letters yourself) and you also get a notice to quit. If she doesn't leave on the agreed date, the notice to quit should ensure a swift eviction, with no complications.

Good luck!

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Mateo 26th January, 2017 @ 00:56

Dear experts,

My landlord has failed to protect my deposit. Actually I paid the agent, but the agent seems to be dodgy as it is not responding phone calls or e-mails so I contacted my landlord and told him he is responsible for the deposit. The landlord became very upset, denied the responsibility and told me I should chase the agent together with him, as he owes him two rents as well. I insisted and he agreed to pay me back the deposit after I leave the flat, even though he is still denying that it is his responsibility. Due to this he also went back on our verbal agreement four days before the expiration of the lease and said i need to get out of the flat. (i triggered the break clause because I didn't get along with my flatmate and he promised my that i can stay in the flat after the lease ends, he changed his mind though after i insisted about the deposit). After some disputes he agreed to let me stay for another two months but on a higher rent as promised verbally. During our 6 months stay here he has been very negligent landlord, we didn't have heating for a week (it was 15 degrees in the flat), he didnt fixed some minor things as promised and he left some extra oven in the flat even though he promised to take it away. When I talked to him he blamed in on the agent and that he didn't know anything. I really doubt that, but because of how I was being treated all along and especially in the end when i was pressurized, yelled at on the phone, being told that i don't know the UK law I am inclined to seek justice in the court and seek compensation. Am I right to do so? I will still stay in the flat for another two months as we agreed and I want to do it after I move out to avoid more pressure and bullying, is that a smart thing to do? He still hasn't protected the deposit (the old lease ended 5 days ago), should I demand from him to do so or should I ask for it to be returned, even though I am in the flat still but on a different agreement-- the landlord just sent me a confirmation via e-mail and I made the transfer. I quite perplexed on what to do, can you kindly provide me with some advice please?

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Ashley 4th February, 2017 @ 06:46

Hi i am a Tennant moving out as repairs have not been done and landlord and his new letting agent company have not been very nice since i finally said i was going to the council about the repairs. Anyway im now worried they will be funny about my deposit. they have already given a bad ref witch i proved to my new landlord was lies with bank statements . My question is when i first moved in here i had different great letting agent and my deposit was put in a scheme by them but then i got a letter stating that my agent has changed and i got a new tenancy with them but iv had no info about my deposit so does that mean it's not protected anymore with my letting agent and 1 year on how do i get it bk

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Caroline 20th February, 2017 @ 20:52

Could you please tell me if one of the tenants in a joint tenancy who has surrendered early and moved out 3 months ago can still claim compensation from a landlord for not being issued PI during his tenancy? The deposit was protected within the 30 days and the deposit remained in DPS,until the partner who is the lead tenant, and still on the property has used most of it on last months rent. It is now a SPT. Am I liable for sanctions if I reprotect the unused balance of the initial deposit and issue a PI now?
Thanks. Caroline

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Barry 23rd February, 2017 @ 13:58

Hi,

I have had a tenant in for 7 yrs and we recently visited to talk about increasing rent, first time in 7 yrs. She then sent me a letter saying she was going to leave. All fine and she is asking where i put the deposit. Well I only did it literally this week....

Not good I know.

She always paid on time and all was ok but she has now got a bit upset with everything and so have I, she was on a good deal.

Anyway are there instances where landlords are getting fined 3x the deposit?

She is asking me to pay for some repairs she said she had done but we had our own tradesman round and they said the work had never been done. Sounds like fraud to me?

Any info would be great....

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Maria 26th February, 2017 @ 23:59

Hi David.
We failed to secure the deposit within 30 days and to seeve the prescribed information. The deposit was eventually secured but now the former tenant has sent a letter before action requesting the full deposit back and compensation for our non compliance. She was in breech of contract when she left 6 months instead of 1 year into the tenancy and she did not pay the full last month rent. Would we be able to counterclaim for this?

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Adam 1 6th March, 2017 @ 20:51

Which section 8 clause is for property damage?

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mr.spacemaker 18th March, 2017 @ 17:58

@maria

I believe you would need to go to court to counterclaim.

If your former tenant can get you into court (or even close to it) then you will definitely have to repay the deposit and a 1x sanction. You should be able to offset the arrears and get the the breach of contract taken into consideration, but your legal costs will far outweigh any of this.

Your best course of action is negotiation; without involving a solicitor. They will only tell you that you are in a difficult position anyway!

If it's not in dispute that she failed to pay the last month's rent you could offer to return just the deposit, with the 'compensation' being cancellation of those arrears.
I doubt that you will be able to negotiate any better than this if a solicitor is involved on her side.

You could word it something like "If we were to go to court then the maximum you could hope to win would be the deposit and a 1x sanction; but your arrears and breach of contract would be taken into consideration which would significantly reduce this figure. I therefore offer to return your deposit in full and give you compensation of an amount equal to the outstanding arrears"

I think it's important that you return the deposit in full so that they can't try and claim again in the future. Hopefully someone else will be able to give more information on this.

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mr.spacemaker 18th March, 2017 @ 17:59

@Adam 1

Nearly everyone advises against Section 8 eviction as it's so hard to make it stick and too easy for the tenant to dispute. Get some proper advice on your specific case before considering it.

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mr.spacemaker 18th March, 2017 @ 18:36

My problem is finally sorted, and getting my house back cost over £20k in legal costs, arrears, and payment to the tenant. The only thing salvageable in the entire house was the living room floor. Everything else has to be repaired or replaced.....

I settled out of court and paid the tenant to leave within 10 weeks; as it was cheaper than going to court and 'winning'.

I'm posting this in case it helps anyone else....

With the benefit of hindsight, I suspect that this was always the endgame of my tenant.
There were many things over the years that I overlooked which now make sense and also I also now realise that I made a rod for my own back by being too kind, and too relaxed. Here is my advice, particularly relevant if you have a tenant that may look for social housing as they usually NEED to be evicted in order to be eligible.

1. Don't just trust the advice of your letting agent. Make sure you back it up with your own research. Make sure you are familiar with any changes in law that have happened during your tenancy and may affect your case. Particularly the Housing Act 2004, Deregulation Act 2015, and Superstrike.

2. Make sure your tenancy agreement is 100% up to date. If you're using an agent, find out when they last made changes and get them to give you a summary of key points or changes from the last 2 or 3yrs.

3. Make your tenants sign to say that they have received the prescribed information AND the 'information for tenants' leaflet. Many agents work the prescribed information into the tenancy agreement but it doesn't include the 'information for tenants' leaflet; which is an essential part of the prescribed information.

4. Make sure the deposit is protected in time, and make sure that the tenant has confirmed this.

5. Be very organised with repairs and VERY suspicious of any missed appointments for tradesmen; or difficulties in finding a convenient time. I am thinking of writing into my next contract that tenants must allow the letting agent to let tradesmen in if they can't be there in normal working hours.

6. Do not let any arrears build up at all. Explain to your tenant that S21 is a precautionary measure, and you are not planning to evict them, but you have a policy of serving notice as soon as there are arrears, and they can ignore it as soon as they bring the arrears up to date.

7. If your tenant is in receipt of housing benefit, make sure you contact the council at the first hint of a problem and request that the housing benefit be paid directly to you.

8. Don't get hung up on damages - they are the least of your worries. If you end up having to evict then it's likely that the whole deposit will be used up by arrears and there will be nothing left for damages. Just get them out as soon as possible.

9. Don't bother with a section 8 eviction. The scammers are very clued up and will use every trick in the book to get it thrown out (false disrepair claims are a popular scam). Just bite the bullet and go for Section 21 - it will be quicker in the long run.

10. Be prepared to accept defeat. Someone with no money has nothing to lose - they are in a far stronger position than you so unless you have unlimited funds for legal costs; your goal should always be to get your house back as quickly as possible.

Sorry if it's a bit doom and gloom - hopefully some of that advice will prevent you from getting into bother in the first place!!

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Mickey 26th March, 2017 @ 17:50

Hi,
i only found out today that my landlady has only just put my deposit in the DPS on the 15th march this year - my tenancy agreement started on the 7th August 2015, and is stated on the confirmation email from the DPS..
My landlady is now being extremely awkard with me about other stuff- ive had to hound her for gas safety check as there hasnt been one done since i moved in (i now have one as of last week), and my oven has been broke since november last year (i now have a new one)..but apparently this is me being awkward!
is there any way she can still get in trouble for taking so long to deposit my deposit?

Thanks

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Simon Pambin 27th March, 2017 @ 08:29

Hi Mickey,

You have up to six years to sue your landlady. She's still liable to a penalty of one to three times the deposit for failing to protect the deposit within 30 days of receiving it. Exactly how much would be down to the judge: the fact that she did eventually protect the deposit pushes it down a bit, but the fact that she neglected the GSC pushes it up again. Needless to say, it's generally better to wait until you're living somewhere else before you take action, as it will make your relationship with your landlady a bit frosty!

One thing you should be aware of: protecting the deposit and providing a GSC are two things that a landlord must do before a valid Section 21 can be issued, so if your landlady has suddenly done these two things, it may be that she is planning to give you your two months' notice to leave anyway.

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M. Ignacio 27th March, 2017 @ 18:41

Dear Daived

I own a two bedrooms and two bathrooms flat in Brixton, I am renting the rooms separately to two different Lodgers/Tenants, I am still in control of the property paying all the bills (Water, TV licensees, Internet, Phone, Electricity, council tax), and a cleaner that clean all the property including bedrooms and bathrooms every other week. And visiting the property at least once a month.

I didn’t have a contract or deposit protection with any of them, one because I am quite new renting out the property (since June16) due to move with my partner after 4 years relationship and other because I didn’t know that this was an obligation.

My(lodger/tenant)moved out on the 4th of march, and until that day everything was perfect between us, after he moved out, he is asking for the documentation about the protection of his deposit that I didn’t protected.

I had given him his deposit the same day (plus £30 for moving one day before)that I received the keys back, and know he is trying to get a compensation for something that I am not feeling comfortable to agree.

Could you please let me know if this is something that I need to worry about? Could you please help me to understand what I need to do?

Kings regards,

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David 28th March, 2017 @ 13:56

@M. Ignacio

Well the only hope you have is to maintain a story that the person is/was a lodger and that you remained resident.

The bills may help and you might say you slept in the living room.

If there is ANY paperwork that refutes this you are stuffed, so if you gave your tenants an assured shorthold tenancy agreement, or any emails to them that suggested they were more than a lodger.

He will probably seek a statement of truth from the other tenant to say you were not resident. You might say you were travelling and slept in living room but if he has any evidence at all!!??

Otherwise you are looking at a settlement of between 1 and 3 times the deposit as a sanction and you should read this page.

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

You have a choice, ignore his request and wait for a legal firm to contact you or you could show your hand and tell him that deposit protection legislation is not applicable for lodgers.

I would do nothing and wait.

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Mark S 28th March, 2017 @ 14:00

Hi Ignacio

Is the house registered as an HMO with the Local Authority?

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M. Ignacio 29th March, 2017 @ 00:38

Hi David /Mark S.

To be honest I don't want to pay him because I fell that I didn't do anything wrong, he had his deposit back. And I treated him very well, I am happy to pay the government or any authority for not protecting his deposit but, why to him? I will wait, thanks David.

Mark S, sorry I am new in this, what is an HMO? So my answer is Not.

Thanks,

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Mark 29th March, 2017 @ 00:46

Hi Ignacio,

Well you will have to pay him, and it is not true that you did not do anything wrong: you did not protect the deposit, as stipulated by the law, you put it into your own pocket, or your bank account--it doesn't matter. Imagine you went bankrupt meanwhile and your tenant would have no way to get back the money--there is a very good reason for this regulation. It is he, that is your tenant, and not the government or any other authority that was at risk by not protecting the deposit.

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M. Ignacio 29th March, 2017 @ 05:13

Mark,

Thanks for your explanation, my point is that his deposit was returned in full, he has lost nothing, and this claim is a clear abuse of statute.

M. i

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