My Tenant Is Threatening Legal Action Because I Didn’t Secure The Deposit

I could throw a stone in the middle of a landlord conference (who actually goes to those things, seriously? Maybe a blog for another day) and probably hit a landlord on the head that’s either been through it, going through it, will eventually go through it, or at the very least, unknowingly harbouring a tenant that’s looked into it.

Rightly or wrongly so, we’re being hunted down like rabid dogs for failing to comply with the tenancy deposit legislation. We’ve become such easy and profitable targets that specialised ‘tenancy deposit claim management’ divisions are popping up all over the place, to assist in the management of dragging and encouraging dormant tenants to claim their unclaimed fortunes. How fucking generous of them.

Business is BOOOOOOOOOOOOOMING!

Every landlord should unequivocally comply with their legal obligations, even the policies that are more ghastly than the boils on your mum’s sloppy face. And while so many try to use ‘ignorance of the law’ as a defence (from my experience, that’s the most common excuse), legitimately or otherwise, it’s still (and always will be) pointless to even mutter the words. Save your warm, unsavoury and moisty breathe for your spouse.

But on the other hand, I’m finding it impossible to empathise with those dick-face tenants that are taking advantage of ignorance purely out of greed. Don’t get me wrong, unscrupulous landlords deserve for their profits to be drained like a large infected cyst, and compensation should be allocated fairly to those that suffered as a consequence. But sadly, there are too many cases surfacing whereby good landlords, but foremost genuine people that are only trying to do good, have been threatened and prosecuted by an academy of asshole tenants that are sniffing around a quick paycheck. Spineless leeches!

Our Landlord didn't secure deposit
Introducing the tenancy deposit legislation was a good move to protect both tenants and landlords, but as it currently stands, as with many legislations that are hashed together by servants whom are completely inexperienced and have no practical knowledge of how the relevant realm works, the finished product seems like it’s lined with clunky congealed skid-marks. Who approved this shit?

It’s clearly ridiculously too damn easy for undeserving prosecution, which has resulted in a long queue of tenants rubbing their grubby little mitts together and practically begging for landlords to fall-short of their deposit obligations, because it’s like a winning scratch card. That can’t be right, not on any level.

So this blog post is aimed at helping those “good” landlords caught up in the struggle. Stay strong, my brothers! Stay strong!

The Tenancy Deposit Legislation

Ok, so let’s go over this really, really, really, really, really, really quickly, because I’ve already covered the what, where and how’s in-depth, over at the Landlord Tenancy Deposit Guide blog post.

Obviously, complying with the tenancy deposit legislation from the offset, which is covered in Section 213 of the Housing Act 2004, should be Plan A:

  • This legislation applies to every landlord in England and Wales that has taken a deposit from a tenant under an Assured Shorthold Tenancy Agreement.
  • Securing the deposit: the deposit must be protected with in 30 days of receiving it.
  • Serving the Prescribed Information: after the deposit is secured, Prescribed Information must be served to the tenant, also within 30 days.
  • Late compliance: unfortunately, you’re still a target if you’ve secured the deposit and/or served the Prescribed Information after the 30 day window!
  • Landlord’s responsibility: it’s ALWAYS the landlord’s responsibility to ensure the deposit legislation has been complied with correctly. Don’t rely on your agent for anything, they won’t be held accountable.

The penalty for failing to complySection 214 of The Housing Act 2004 states that IF a Judge is satisfied there has been a breach they MUST sanction the landlord to cough up between 1 and 3x the deposit for each tenancy and also return the deposit itself. Ouchieeeee! Not to mention, you’ll also be unable to serve a valid Section 21 notice, which is arguably a shit-ton worse on every level!

If you’re sitting there hearing screeching noises as your stomach is avalanching out of your anal-cavity, and with your hands over your eyes and gob wide open, because YOU KNOW you’ve failed to comply, you may want to read the stone-cold reality of your situation over at the ‘I haven’t protected my tenant’s deposit‘ blog post to help plan your next move. I’m sorry to say, you’re in a pretty unforgiving situation, so the options ain’t pretty.

In short, if lady luck is on your side, your tenant’s kind nature or ignorance will allow you to tip-toe away unscathed. But ya’ know, if they eventually cotton on… don’t be surprised if your ‘perfectly reasonable tenants’ quickly turn against you and suck-the-living-shit out of you after uncovering the treasures that await them. There’s something very zombie’ish about tenants turning once they become enlightened.

My tenant is threatening to take legal action against me, what can I do?

Important disclaimer: before continuing, I must clarify, the following is NOT legal advice. Say it out loud, “NOT LEGAL ADVICE”… SAY IT!!! If you’re after professional legal advice, please speak to an extortionate Solicitor that specialises in landlord law. The following is purely based on personal experiences and hearsay…

If you’re currently caught in the cross-fire, the odds are it’s because your tenant(s) has discovered you’re ripe for prosecution due to your failure to comply with the tenancy deposit legislation. With their beady little eyes firmly on the prize, they’ve probably contacted you demanding compensation, typically somewhere between 1-3x the deposit value. Of course, it’s almost always x3 because they’re ambitious, they want the jackpot, and after a chat with their mate down the pub and/or doing their ‘online research’ they probably believe that’s what they deserve can get away with. And hell, why not reach for the stars? But what’s most worrying and disappointing is that many tenant’s chase after the easy money despite the fact they’ve benefited from a perfectly reasonable landlord throughout the tenancy, so that’s why many landlords are often caught blind-sided by what is quite frankly, daylight robbery. They may as well have posted this through your letter box:

give-me-money

I can only urge all tenant’s in that position to side-step and forgive by asking for the deposit back in full, and then by then making a strong vocal point. Hopefully lesson learned.

With that said, the following advice is suitable for those good landlords that are genuinely being taken advantage of by the money-grabbing parasites that don’t have the moral fibre to put their foot on the breaks…

Ultimately, your objective at this point should be to avoid Section 214 Housing Act Deposit Protection Penalty Sanctions.

Bu…bu… BUT my asshole tenant has also breached their tenancy obligations!

Ok, I hear this all the time! What a classic.

At this point, many landlords will frantically splash around, trying to kill the situation by pointing out their opponent’s shortcomings (i.e. “my tenant has fallen into rent arrears”, “my tenant shat on the carpet” etc), hoping for a ‘get out of jail card’. Unfortunately, focusing on someone else’s wrongs to mask your own is as embarrassing and futile as it sounds.

You need to understand that you’ve been a rat-weasel, you’ve done wrong. You are liable for prosecution, so right now it’s only a question of how little you pay.

Minimising costs & Settling

Ok, so… credit where credit due, the following is largely taken from Comment #226 over at the “I Haven’t Protected My Tenant’s Deposit, What Should I Do?” blog post, by an extremely generous, experienced and knowledgeable contributor, David. So a big thank you very much! The following will be a hybrid of David’s sound advice and my own toxic interference…

The reality is, the tenant just wants paying off; they usually have no intentions of escalating the situation to court (because that can be expensive, not to mention a whole heap of hassle). What they want is some free money, and the legal threat is an attempt to reduce you into a whimpering little girl and lure you into submission.

You have three options:

  • Pay what they demand
  • Fight in Court
  • Negotiate

If they’re asking for just 1x the deposit, it might be wise to begrudgingly pay up and move on with life, with the experience of knowing better for next time. No doubt, that might still hurt like a sledgehammer to the nuts, but it really is an easy escape from what can potentially be a very firm and prickly grip. However, if the amount they demand seems totally unreasonable (you may want to assess your performance as a landlord at this point, and be honest with yourself), negotiating is usually the way to go

After receiving the threat, you should respond swiftly. You should write your response knowing that a Judge or Mediator may look at it; that means you will want the Judge to see that you are the fair and reasonable person, while the tenant is nothing but a mumbling buffoon, using the Court to decapitate your wallet for some easy cash.

You should start with a letter expressing your complete astonishment and surprise. I would send something like this:

Negotiation Response 1

Dear [Tenant name(s)],

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

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

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

At this stage I would like to ask you to reconsider your proposed Court action and agree a settlement with me; that being a positive letter of reference and the sum of £[insert low-ball offer, less than half of 1x deposit] as a gesture of good will with no liability accepted as full and final settlement of this matter.

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

Yours sincerely,
[Landlord]

The low ball offer is to bring the leech tumbling back into reality (assuming their initial settlement fee was OTT). They will most likely reject your offer, which should definitely come as no surprise, because you’re dealing with a donkey that’s an utter chancer. In any case, now you’re dancing/negotiating. In response, they may ask for 1x the rent, which you may want to settle with, but they may play hard ball and ask for 2x the deposit. If they do the latter, I would reply with the following:

Negotiation Response 2

Dear [Tenant name(s)],

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

There was no animosity between us, any repairs were carried out promptly and overall I was an excellent Landlord. I am reliably informed that a Judge will take into mitigation the fact that I am a novice Landlord, [and that I quickly protected the deposit in an approved scheme as soon as I became aware of my unattended oversight].

I have refunded the deposit to you in full despite the fact there were a number of issues with the way you left the property that were beyond wear and tear. I did this because I thought we had a good landlord/tenant relationship.

As I explained recently, I feel it is grossly unfair that you try to extort money from me, and whilst I am keen to keep things amicable, I will only agree to a settlement that is fair and reasonable. To this end I am prepared to provide the positive reference offered previously and increase my offer to £[no more than 1x deposit] as a gesture of goodwill in full and final settlement with no admission of liability.

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

Yours sincerely,
[Landlord]

They may accept or they may try again. In any negotiation you have to give small amounts slowly and usually in response to something given by the other side. They will no doubt give reasons for why you should pay more, but if they don’t, then they are really showing they are weak. SO WEAK. WEAK LIKE… I don’t know… weak like your stomach after digesting an out of date pork-chop.

So be ready to offer incremental amounts, and then a final offer of no more than 1x – 1.5x deposit (or whatever you’re comfortable with), because at some point you have to draw a line in the sand and be prepared to call their bluff. It is your money and your risk appetite that matters here.

A Judge can decide anything they like within the legislation, but a lot of them get pissed off when it’s obviously just about the money (which is often the case). They have a huge case load; some may even kick the case out and force you to go to mediation. They may even say the tenants have to pay for that because you have tried 3-4 times to settle (that’s why it’s important to try and fairly negotiate).

This is ultimately a game of poker, your tenants know you have a potential liability, but you know you have mitigation; depending on their case, they may not get costs unless this goes to appeal, and that is going to be expensive for them upfront with no guarantee of success. That can be a powerful deterrent for the donkey to proceed.

If a settlement is agreed

Hopefully a fair settlement can be agreed. If that’s the case, it should be documented and laid out with a heading of “Settlement Agreement”, and it should clearly state that the settlement is the ‘full and final settlement’. The document should then be signed by all tenants. I’m currently working on getting an example Settlement Agreement as an early Christmas present from me to you, so sit tight for that! It’s all about love around here.

Correspondence

It’s important to send all correspondence through assured means. That could include all of the following…

  • Sending letters with recorded delivery
  • Delivering a copy by hand through the letterbox, while video yourself doing it
  • Sending it via email with a PDF version attached for good measure. The subject of the email should be “Formal Response to Letter before Action”

Every case is different

The problem with these cases is that they can come from 20 different angles; and the law has been amended so many times by statute and case law that it is a dog’s dinner. So while the advice above may not be entirely relevant or fitting to your particular case, I think the key takeaways are:

  • If you’ve been a good landlord, negotiate… do everything you can to settle!
  • If you feel your tenant wants a reasonable amount of compensation from the offset, you’re probably better off paying and considering yourself a little lucky sausage.
  • Ensure you are being fair and reasonable at all times; suppress your anger and frustration if you need to.
  • Always respond quickly, and send all correspondence through assured means.

Before deciding to take legal action!

A word of caution to any Landlord or Tenant thinking of taking legal action; it can cost you £8k to £10k if you get a belligerent opponent who takes this to appeal, employs a barrister and wins. So to emphasise…. the purpose of this blog post is to encourage all parties to settle, settle, settle!

So, anyone going through this dilemma, or been through it? What’s your story? Can you provide further advice? TELL MEEEEEEEE! TELL MEEEEEEE! xoxo

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108 Comments- Join The Conversation...

Showing 58 - 108 comments (out of 108)
The Landlord Avatar
The Landlord 26th November, 2016 @ 20:14

@mr.spacemaker
"they served the notice without telling me" - brutal!

The problem with issuing notices, even as a "precaution", is that it could send the wrong message, and it might piss the tenants off. They'll be wary of the fact that your finger is always on the trigger, and I'm not sure how good that is for relations. Bad situations are almost always more difficult to resolve if there's tension/threats.

With or without a deposit, it's probably always best to communicate when there are arrears issues, and if needs be, work out a payment plan. I'd only send a notice quickly if the tenant was being unreasonable and unwilling to communicate, and in that case, I'd send the notice whether I had a deposit or not.

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mr.spacemaker 27th November, 2016 @ 03:11

@The Landlord

the only problem is that if you're a reasonable person, it's very easy for a tenant to take advantage - only takes a couple of excuses and you're a whole month (or worse) behind.
Also if they are housing benefit then it often takes the council weeks to sort things out when there is a problem.

good point re an itchy trigger finger though - maybe take two months in hand and serve S21 as soon as they only have one month in hand. so if they miss a payment, you give them a whole month to catch up and then if they haven't done so by the time they pay the next month's rent you serve S21 but make it clear that it's just the notice stage and they have at least a couple of months to catch up before you take it any further....this would seem reasonable to most people, no?

at least that way if the arrears get worse, you can start the eviction process sooner.

i can definitely see some tenants being keen to create a situation where there is only one month in hand anyway!!!

will give it some thought before my next tenancy, but i'm veering towards no deposit and they pay first and last months rent when they sign the contract (so no rent payment required on the last month of the tenancy).

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David 27th November, 2016 @ 09:48

@mr.spacemaker

re:55

I do not think you will need legal action against the Solicitor, they should have sent you their terms and a care letter when you instructed them; compare it to what happened. They also have PI and Practice insurance, a carefully drafted letter with a "I would like to resolve this matter amicably to avoid having to escalate this matter to the SRA" should make them listen up.

However, that will only get you your fees back regarding the S21.

It seems to me the person you really have potential action against is the agent, they held the deposit, they failed to protect it; they advised you it did not need protecting. Now these are things you SAY but if you have evidence, emails, letters etc then you have a case for consequential loss due to bad advice given.

Do not show your cards, start by saying you need their help in preparing your case for mitigation and need copies of any emails, letter or phone calls that will show you were attempting to comply with the law. If they do not provide it, do a Subject Access Request in Accordance with Data Protection Act.

Now I do not know if you are going to fight your S21 claim or be your tenant’s bitch and cough up, but despite your definite failure, the only real failure (other than you hiding under a rock for all these years) is the Dereg act June amnesty, in effect a window of 3 months and you are not the professional who should have known.

Now when these cases are fought it comes before a District Judge, they may have a wealth of experience or be newbies but they always bow down to a Barrister, which is why your Solicitor will do all the Donkey work but it will be the Barrister who goes to Court with you.

The other side may get a Barrister too, it really depends who is funding this, either way, despite the fact that Localism Act and Dereg act have tightened up the law, this is an old tenancy so the argument should go as follows:

1. Tenancy Pre 2007
2. Law has flipped back and forth on whether it needed to be protected
3. Agent was one holding the deposit
4. Agent gave explicit and professional advice NOT to protect the deposit
5. Agent finally advised to protect (not return) the deposit
6. Original Solicitors advised not to return deposit yet
7. You have never held the deposit
8. There is mitigation

As I say this case law has been superseded to some extent BUT can still be referred to considering the age of the tenancy, so

AGENT HOLDING THE DEPOSIT
(Draycott & Draycott -v- Hannells Letting Limited [2010] EWHC 217 (QB))

Now we know that quite rightly the Landlord is liable because section 212(9)(a) clearly states

(9)In this Chapter—
(a)references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies,
http://www.legislation.gov.uk/ukpga/2004/34/section/212

However, in

(Draycott & Draycott -v- Hannells Letting Limited [2010] EWHC 217 (QB))

http://www.bailii.org/ew/cases/EWHC/QB/2010/217.html

The Judge went on to say

• In my judgment the Judge was clearly correct on this issue. The words of s.212(9) are clear and unambiguous, and there can be no occasion to look at Hansard or to any other extraneous material to interpret s.214.
• In my view the words in s.214(3)(a) "the person who appears to the court to be holding the deposit" are not otiose. Rather, those words limit the scope of any possible order under s.214(3)(a) to the person holding the deposit, and prevent such an order being made against any other person who would come within the statutory definition of the landlord – for example a letting agent who, at the time of the making of the court order, was not holding the deposit.
• NO SUCH LIMITATION WOULD BE APPROPRIATE IN S.214(4). Unlike s. 214(3), which is an order for restitution made against the holder of the deposit, s.214(4) is penal, as Mr Browne points out. There is no reason why the penalty should be imposed on the person who, at the time the court order is made, happens to be holding the deposit. The penalty should be imposed on a person who is responsible for the failure to comply with s.213. In the present case that is the Defendant, and not the actual landlord (assuming, at this stage, that there has been a non-compliance which attracts an order under s.214(4)).

At this stage you would point out that it was the AGENT that held the deposit from 2007 to 2016, they also advised the Landlord that as a pre 2007 tenancy it did not need to be protected. As they were the professionals you took this advice.

As such, you would like the Court to consider them liable as the person holding the deposit not you.

Now failing this, you remind and ask the Court to reflect that they are allowed to consider the mitigation for your failings, specifically

Okadigbo & Anor v Chan & Anor [2014] EWHC 4729 (QB)

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

This in fact was a very similar case; where a Landlord relied on a Letting Agent:

• Section 214(4) provides that where there has been a failure to comply with the requirements relating to tenancy deposits:
"The court must order the landlord to pay to the applicant a sum of money, not less than the amount of the deposit and not more than three times the amount of the deposit within the period of 30 days beginning with the date of the making of the order."
• That provision is an amendment of the regime which previously applied. The previous rule was that the payment was to be three time the amount of the deposit with no discretion to order any different amount. The effect of the changes made by the amendment was to introduce a discretion for the court to order the landlord to pay part to give not less than the amount of the deposit and not more than three times the amount of the deposit.

• In exercising her discretion under the Act as amended in that way the judge said this at paragraph 18 of her judgment:
"Finally, the Defendant seeks a penalty pursuant to Sections 213 to 215 of the Housing Act 2004. Section 214(4) provides that in the event of a breach, and here the breach is admitted, I must award the Defendant a sum of money not less than the amount of the deposit and not more than three times the deposit. The Defendant contends for the maximum sum which would be three times £1,520, a sum of £4,560. The Claimant contends for one month's rent in the sum of £1,520. I find that the Claimants are not experienced landlords, that this is the first time that they had let out any property and that they were letting out their home. That they quite properly put the matter in the hands of professional managing agents who let them down by not complying with the terms of the Act. I find this case to be at the lowest end of the scale of culpability for non-compliance. And for those reasons I award the sum of £1,520."
• Mr Wellings for the appellants says that this was a wrong exercise of discretion. He submits that the lack of experience as landlords to which the judge referred and the fact that they put the matter in the hands of agents were matters of little weight when set against what he described as a serious failure to comply with the requirements of the Act for a considerable period of time. He recognised realistically that there was a degree of mitigation in that the breach had been admitted and that there was in the event full compliance, albeit only after a period of delay. He contended that the discretion of the judge should, therefore, be set aside and that the appropriate order would be a multiple of twice the appropriate amount of rent.
• In my judgment, however, the judge was entitled to regard the question of culpability as the most relevant factor in determining what order to make and was entitled to find that the culpability in this case fell at the lowest end of the scale for the reasons which she gave. It is not as if the breach was uncorrected and therefore, although the appellants were lacking the protection for a period of some months, in the end matters were put right.

@Mr.Spaceman, I would get your solicitors to respond to the lawyers acting for your tenant, offering to avoid legal fees with a settlement offer of 1x the deposit, with no acceptance of liability in full and final settlement of the matter and that they will be relying on a very similar case:

Okadigbo & Anor v Chan & Anor [2014] EWHC 4729 (QB)

Pointing out that if a reasonable offer is made and not accepted it may affect the matter of costs.

They might also say that if the tenant wishes more they may be better off taking an action against the agent directly.

That way you may ask the Court to not award costs because you made a settlement offer which is materially the same as what the Judge decided (they wasted the time of everyone).

Either way, at the end of it, you go after the agent for all your costs in this matter which are a direct consequence of their BAD ADVICE and claim against their Professional Indemnity insurance.

You have to fight this, or at least seek settlement as outlined here.

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David 27th November, 2016 @ 09:52

@John

I am not wishing to get into some argument with you.

It is easy to say "I would gladly sit in front of a judge and defend this position"

When actually that is really the last thing you want because that playground costs money and you never know which way it will go.

Anyway, like the Landlady I referred to above, you seem happy to take the risk so all is good.

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David 27th November, 2016 @ 09:57

@Landlord

"The problem with issuing notices, even as a "precaution", is that it could send the wrong message, and it might piss the tenants off"

True but until Dereg Act people were issing S21's with the original tenancy, now on new tenancies they have to wait for 4 months to pass.

The Landlady above does it to cover her risk and explains that clearly (she says).

Personally I think it is just easier to protect the deposit, serve the up to date "how to rent" doc, get a PI signed and comply with the law.

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David 27th November, 2016 @ 10:46

@MrSpaceman Re:59

You are right that "if you're a reasonable person, it's very easy for a tenant to take advantage - only takes a couple of excuses and you're a whole month (or worse) behind."

What you have to remember here is there are tenants that will consider you to be a Bank, but if you do not hit back hard they will do it again, some will say they will do it again anyway.

Now I was taught from a young age to pay all bills before you get the red one, but in times of hardship that you can let any bill slide except for the roof over your head. My Grandfather used to work away for long periods at the docks in London and Liverpool; he always gave my Grandmother almost all he earned. One day he came back and the Council had evicted her, she was gone, someone else lived there and the kids were taken into care. Now she was bad at managing money and was too ashamed to tell him, he did not even know where his kids were for 3 months.

Times have changed, but you have to charge as much as you can get away with, increase your rents in accordance with the “market” and get Tenants that are affluent but can't get a mortgage. I guess that means young professionals, but try to determine their values. CALL their old Landlord and ask “would you rent this tenant one of your other properties”.

As stated here

propertyinvestmentproject.co.uk/blog/refusing-dss-tenants-is-discrimination/

You really can’t afford to take on DSS tenants in current climate (benefits have been capped for 5 years, HB is dependent on LHA rate 30th percentile, benefits keep getting suspended which is beyond your control, takes six weeks to be paid direct, get paid 4 weeks in arrears, Councils can’t advise when will be restored because of Data Protection – I could go on).

Now if you are going to be a carpet and allow people to walk all over you I would sell up and put your money into buy2letcars or a John Bogle mutual fund!

If you are going to abandon the deposit then you can’t wait a month to SEE if they repaid, you need to call them every few days for an update, then if not paid within 7 days you escalate. Consider if you waited till the next month was due and they did not pay, you would now issue an S21, they might not pay for another 2 months and so you are 3 months down.

Sadly you can’t assume people will be reasonable, you have to protect yourself, I think taking first and last month PLUS the deposit is the way to go. Moving forward Dereg Act makes things pretty clear on what you need to do (keep up repairs, no revenge evictions, Gas Safety, Energy Certificate, How to Rent, Deposit Protection certificate, PI) it is all about having a procedure of taking the deposit week early to reserve property and serving these papers which you get signed at the time of letting).

IF you decide not to take a deposit I would consider taking 6 month reverting to quarterly payment as the Landlady above does, but specify last few months do not need to be paid on presentation of an S21 form. At least that way you get people that can come up with 6 months’ rent which helps your cash flow, you have an option to get new tenant if rents in local market increase and you are protected from ever having arrears.

Of course this will not protect you if a tenant wants to be thrown out to get into social housing but that is why you try not to take on a tenant in that demographic.

I still say you are better off taking a deposit and following the law (as well as taking several months rent, whether 2 or 6 months) and following the law on protecting.

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Cat 27th November, 2016 @ 15:13

I really am missing the point.....so many landlords spending so much time thinking of creative ways of screwing this system?!? Just lodge the deposit with a protection agency as per the law! They are free and easy to use and you're disadvantaging yourself by taking money up front and not calling it a deposit. You can't use said "advance rent payment" to pay for damage!!
Banging on about timing and methods for issuing section 21 when if you followed the f'ing law you could issue when the hell you wanted to.......maybe the thought of an independent adjudicator deciding what you can reasonably take from a deposit is what puts you off because I can't think of one other valid reason not to protect 🤔🤔
I wonder if all the landlords here plotting and scheming of ways around the law are the same landlords who get the rest of us a bad name 😡😡😡
Yes tenants can be arse holes but work for your fucking profits and manage them in a legitimate way, instead of spending all your efforts avoiding the law!
......and breath!

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mr.spacemaker 27th November, 2016 @ 16:19

@cat

i'm not thinking of ways to screw the system, even though the system screwed me.

what i was suggesting would put more control in the hands of the tenants regarding the deposit as you would be relying on their good nature and honesty in order to get enough money for any damage - the landlords only bargaining chip would be the reference, and bad tenants would not give a toss about that, especially if they have done a lot of damage. it would be much better for good tenants as they will know that the landlord can't take the mick by overcharging for petty repairs.

i've been burned very badly by the changes in deposit legislation and i just feel like i don't want to be at risk of getting caught again if the legislation changes. that's less likely now i've been stung and will endeavour to follow all the landlord news but still, i'm a part-time landlord and i could easily miss something.

i've learned the hard way that damages are a tiny fraction of the cost of a bad tenant so i'd rather risk it by not having a deposit, and taking two months of rent at least gives some protection with regards to arrears, which are the only real stress during the tenancy.....

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David 28th November, 2016 @ 13:25

@Cat

You are right but you are also so very wrong to criticise and ASSuME!

Right, in that people should just figure out the procedure and get it done upfront, in accordance with the latest law.

Wrong, because this post was created to help people who were either not aware of the law or preceded the law and now find themselves in hot water.

Now unless you have a time machine your comments do not really apply to them.

Consider MrSpaceman, his tenancy was pre 2007 so before deposit regs came in.

His agent has always held the deposit

His agent gave him explicit advice saying he did not need to protect the deposit because it was pre 2007 legislation.

The law on his type of tenancy has flipped back and forth with various senior court decisions and new updates to the tenancy deposit legislation. All along his agent has told him he was fine.

Now he has a tenant with only one rent increase in 10 years, the guy is in arrears, on vulnerable list, wants to be evicted so he can get social housing. He was referred to some 3rd party who is seeking the max, even tried to suggest that there were three tenancies due to the one rent increase (total bollocks).

His lawyer told him he did not need to return the deposit before issuing the S21 which was protected some 5 months ago after final advice from the agent that it did now need to be protected.

He then found out that there was a 3 month amnesty period in 2015 when he could have protected the tenancy without sanction (not forgetting that had he evicted rather than supported the tenant over the last 5 years he might also have avoided the sanction).

He then found out from 2nd solicitors that because his AST went SPT just after April 2007 the latter agreement created by statute, means he has to return the deposit before he can issue an S21.

So he is facing paying the other sides costs, his own legal fees, having to re-serve and then to face S214 sanctions on top of that, potentially about £10k.

I think this tenant may have wiped out any "fucking profits" that MrSpaceman may have made on that property to date.

Of course he is concerned that having trusted professionals it may be easier to avoid this risk altogether by simply not taking a deposit against damages but mitigating his risk against a tenant falling behind and exposing him to more debt.

I did advise that for new tenancies things are better, you no longer have to serve an S21 on an anniversary, the S21 A6 (bit.ly/sec21a6) is now a statutory form without the former 23,000 variations that can make it invalid.

Still if he wants to take the risk and simply take more rent upfront that is up to him. We have merely been playing out the various scenarios to help him make that decision.

There is no nefarious plan, just a desire avoid taking one deep and painful up the backside.

Where I agree with you is about protecting it and complying with the law. The fact is that any tenant can fall off the ladder, get behind in their rent and have to be evicted because some Councils are not following guidance.

In many ways taking a bigger deposit and protecting it may be the way to go, taking a 3 month deposit and 4 months’ rent upfront would at least give the Landlord the option to issue an S21 on the first failure to pay rent on the due date, the deposit will be held in the approved scheme, so say 7 days to issue the S21, 2 months’ notice and then potential of bailiffs to evict if the tenant does not go. At least he would be able to claim that 3 month deposit when the tenant has gone and pursue his eviction costs and any outstanding rent over what is held in the scheme. Soon the bailiff route forced by some Councils will be gone as there are white papers coming to make this law (hopefully).

Taking high deposits and upfront rent does to some extent protect a landlord from certain types but of course some drug dealers have access to funds so usual checks need to be made.

An S21 does not need to be served by a lawyer but simply in accordance with the law. Again it is just a procedure.

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andrewa 3rd December, 2016 @ 19:18

Economics 101. If a government wants less of something all they have to do is tax it more heavily and wrap it in red tape. I thought there was a housing shortage in the UK? If so why is the government increasing taxes and red tape for those providing the housing?

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Simon Pambin 4th December, 2016 @ 13:27

It's a nice bit of smoke and mirrors: the Government gets some extra tax money, they're seen to be doing something to rein in those awful buy-to-letters who are solely responsible for the state of the housing market, and it doesn't hurt their wealthy mates who are rich enough to be able to buy a rental property outright.

Of course, most of the costs will end up being passed on to the tenants, and it'll make bugger all difference to the housing market - you'll still have X number of properties and Y number of people wanting somewhere to live so whether they rent or buy actually makes very little difference - but it gives the impression that they're doing something and, when it comes to politics, that's all that matters.

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TenantLord 10th December, 2016 @ 14:59

AndrewA, Simon - there are actually some good reasons for govt to dislike BTL as it operates now, even if you ignore the (overblown inaccurate and unfair, IMO) caricature of greedy profiteers.

UK PRS has v high proportion of small llords, who while offering vital supply, also tend to struggle with property improvement, and can br ruined if interest rates rise fast. You end up with a PRS with a lot of churn, unhappy tenants, happy agents, and vulture finance waiting to pick off the weakest but not staying to improve stock.

Govt would be sensible to want fewer, bigger PRS Llords, who could be expected to meet housing standards, be regulated more easily, and be comfortable with offering stability of tenure to those who desire it. They'd also be the people who could be tempted to build more PRS at scale.

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Simon Pambin 10th December, 2016 @ 17:20

@TenantLord

You have to wonder why it is the case that the UK private rental sector isn't dominated by bigger players, given that it's a contestable market: barring the need for a bit of capital and finance, there aren't really any barriers to entry.

If anything, given that there are clear economies of scale in terms of the administrative burden and access to maintenance contractors etc, you'd think it would be susceptible to domination by a few big players, with small landlords left to pick up the crumbs in niche areas of the market. I can only conclude that there's not enough money in it, which in turn makes me wonder why people readily accuse so-called buy-to-letters of profiteering.

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tenantlord 11th December, 2016 @ 03:47

it's largely a historical thing, I reckon. UK went from a huge largely unregulated PRS, to a very strictly restricted PRS which basically made being a commercial landlord at scale almost impossible, esp as competing with huge direct social housing by local govt/HAs and large scale home ownership.

So, when the PRS was opened up again, almost the only way the market could seriously expand was through small LLords.

I suspect council house sales helped too- the sort of people who might have been the target market for bigger residential firms could just buy their home at a big discount instead, so how could a "big" Landord compete with that?

I sometimes wish some of the better HAs would step into the gap now but they lack the risk appetite (and possibly capital) for major expansion.

Only area where this didn't really apply was the student market, and there the bigger providers have expanded a fair bit - offering a pretty decent homogenous product to a very specific market which most small Landlords can't match - and using scale to Maybe some of them will move from student market to young professional lets?

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Grumpy 13th December, 2016 @ 13:29

@SimonPambin

"I can only conclude that there's not enough money in it, which in turn makes me wonder why people readily accuse so-called buy-to-letters of profiteering."

Well said.... unless you have property from years ago, more or less paid off, the returns are pretty shitty. The only reason people bought them was the huge capital appreciation that came about during the interest rate drop from 15% to 0 over the past decades.

For anyone to buy a small house/property now must be off their head.

As you say the economies of scale help to a degree, but smaller Private landlords often will be working to do repairs / maintenance and viewings etc on their own time for what amounts to less than minimum wage!

There is an argument that the PRS helps keep the rents down, an individual with a rental house wants it let all the time, and will be more willing to cut the rent to keep it occupied than a large corporate property owner with enough slack to hold out and say take it or leave it.

Forcing the housing rental stock into the hands of some large conglomerate is not going to benefit anyone!

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Ceri 5th February, 2017 @ 02:20

I forgot to protect my tenants deposit within the 30 days. The rent started 1st July I did attempt to protect the deposit on 29th Sept but the fee did not go through (i do have a copy of the cancelled invoice) I then attempted again on 31st October successfully once i received notification of the earlier failure. The tenant moved out at the end of the 6 month agreement and deposit was returned. I have now received a letter requesting compensation as the deposit was not protected within the 30days, otherwise start court proceedings.
What can i do?

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mr.spacemaker 5th February, 2017 @ 08:55

Unfortunately, you're definitely in breach and there is no way out of it.

If you go to court, the judge will have no choice to award the full deposit amount, plus 1x, 2x, or even 3x as a sanction.

Your attempts to protect may help avoid a 3x sanction but that's it.

So, awful as it may sound, best case scenario is to give the tenant double the amount of the deposit, and the sooner you do that, the less chance of legal fees.....

Bear in mind that they may be paying legal fees currently, and this will help with negotiation. They may be bullshitting with a solicitors letter (always advisable when trying to get money from someone).

Read all of the advice at the top of this page, especially this bit:-

"You have three options:
Pay what they demand
Fight in Court
Negotiate"

*remember, you need to come to terms with the fact that double the deposit is the MINIMUM you will lose in court, so anything less than this is a massive bonus. Hopefully the tenant will be more interested in quick easy money than a long fight for that amount....

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David 5th February, 2017 @ 13:37

@Ceri

I am afraid MrSpacemaker is right, everything you need to mitigate your loss is above including letters you might write. Read every post and the associated thread which has about 5 years of similar experiences.

Bear in mind the goal here for BOTH parties is a settlement, for both sides it can be like a game of P O K E R but in your case you have more to lose.

My general approach is that if you were a decent landlord you end up paying 1x the deposit, if you were a bit overbearing and charged for things like redecorating you might be looking at 2x and if you did not carry out repairs and can come off as a bad landlord then 3x is a possibility. It also works the other way, if the tenant was in arrears and you used S21 to get rid of them a Judge can give you the minimum.

It all depends on the Judge you get on the day, I have seen some realise that the tenant is trying it on and force them to appeal (which exposes them to costs), they literally said "well I find that the deposit WAS protected" even though the law says it has to be done within 30 days.

You did not say whether it was the tenant who wrote or a lawyer or claim company.

A claim company do not want to negotiate, they want to go to Court so they can get legal fees and give the tenant the sanction they obtain.

A tenant advised my a mate in the pub just wants to get a simple pay day.

If you have a claim company, reach out to the tenant direct, see if they will accept a settlement of 1x deposit and a decent reference.

The difficulty you face is that even on your first attempt it was not within 30 days for the deposit or the Prescribed Information.

However, if you are a novice landlord you can use that as mitigation.

The key is to get the tenant to realise that it is not a certaintly that they win in Court, so they are better to settle for 1x the deposit as free money now than risk going to Court. The reference has real value to them if they are in the private rental sector.

Please feel free to ask questions and provide more detail to your case.

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mr.spacemaker 5th February, 2017 @ 16:06

Bang on the money as usual David.

I wouldn't mind your opinion on something actually....

I think the whole reason my tenant got legal aid is because I started S21 proceedings that were not valid (thanks to the various changes in deposit protection law).

I was under the impression that I needed to refund the deposit before giving S21 notice, but my letting agent advised me otherwise (on the advice of their solicitor who I paid to issue notice). Also, when it came time to issue the notice, for reasons unknown, they failed to check with me before sending it.
After the notice was sent, they told me not to worry, and that I just needed to refund it before taking the S21 to court. In the end they told me to risk not refunding it, as it was protected, and in their opinion the tenant was keen to leave anyway.

The counterclaim to the S21 has cost in excess of £15,000 and I feel that most of this would have been avoided if they had let me refund the deposit. My email after the S21 notice actually said "I think I should withdraw the notice, refund the deposit, and issue notice again."

Should I be pursuing the letting agent, their solicitor, or both for some of my costs?
n.b. I did not have a full maintenance contract, I just paid the agent and their solicitor to do the eviction.

They should have picked up on the fact that the S21 was invalid, and they should have known about Superstrike, no? At the very least, they should have looked into it when I specifically questioned it.

Is it worth bothering with, considering that this tenant has cleaned me out and I'm unable to borrow any more money for legal fees? I dread to think what the Solicitors will charge to do this, and I don't think their costs will be recoverable if it's in the small claims court.

Obviously, regardless of these mistakes I would still have been liable for a 1x deposit sanction, but it's unlikely that the tenant would have been able to afford to start legal proceedings and they probably wouldn't have had such a good solicitor.

Thoughts?

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Ceri 6th February, 2017 @ 07:12

Many thanks Mr Spacemaker and David, I do understand I will be putting a letter together to send back with a counter offer.
It was a letter from ex tenant at this stage, I did not charge any costs when he moved out I refunded the full deposit.
I have to step back from my feelings that he is taking this route when everything has been more than amicable. During the 6 months he rented the property I had a new boiler, heating system and kitchen installed. Even helped him out with furniture.
I have definitely learned a valuable lesson and I can see why landlords do start to toughen up.

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David 6th February, 2017 @ 14:09

@MrSpaceman

I remember your case, it was one of the most unfair just because you were caught between the dates.

There are two legal routes for you, breach of contract and Professional Indemnity.

I always advise people to use a Lawyer who is an expert in the area of law they are using, for Professional Indemnity that is Irwin Mitchell. They are not cheap but they will tell you if you have a case, albeit that the initial advice may cost you £500 to £2000.

For breach of contract the agent may say "he was only on the minimum service level" BUT they gave the advice and you reasonably accepted that advice from them in a professional capacity hence the PI claim.

I think you have an option to negotiate a settlement by approaching them and asking for the name of their professional indemnity insurers.

They will ask why and you can say "I am preparing a legal claim against you", obviously this will scare them so they will want to talk.

At this point you tell them you have incurred £15k of costs based on their professional advice and you ask them for their firm proposals to settle the matter or else give you the name of their insurers.

With regard to their solicitors, unless they gave you direct advice it is for the agent to conjoin them in the case.

You or the agent could put a complaint into the SRA but that will take at least 6 months and I would not hold your breath.

What you can do is get "something" from the agent to avoid it becoming legal. You can say to them that they can avoid further legal costs by entering into a settlement with you.

What you can expect is the IM will prepare a case if there is one, they will write to the Agent with a letter before action, by this time you will have run up perhaps £2k of costs so it adds to any settlement being cheaper before action.

If they pass to their insurers you will have two top tier lawyers fighting it out (which is why you need IM in the first place) they can do this for 2 years running up costs for both sides. The insurance company has deeper pockets, will use every trick in the book to delay delay delay.

If the agent gave you advice at a time when the law made it correct then you are stuffed, I think the issue is that they advised you that you did not need to protect the deposit and that led to the potential for claim, so a consequential loss. Also they wrongly advised you to go S21, so in your settlement you are looking at the costs of that element.

These days courts are playgrounds for the wealthy but if you can appear to be angry enough, draft a reasonable claim that they believe they might lose, then you might get a settlement.

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David 6th February, 2017 @ 14:20

@Ceri

It is not so much that you toughen up but as the article says, you comply with the law. Check out the related links above about your obligations.

Since Oct 2015 they are harder, you now need a Gas Safety, Energy Performance and a How to Rent booklet as well as the Prescribed Info.

Failure to do these can void an S21, a clever tenant looking to delay a move would not tell you until the 2 months are up.

Some of the Deposit Takers try to produce the PI in their paperwork but they fail to provide certain information which may leave a landlord feeling they complied but still have things to do.

This is a business, create the processes and a checklist of all you need to do, in the order you need to do it and with the verification documentation to provide you did it.

For example, instead of taking the deposit when you start the tenancy, create a pre-acceptance stage, you get the tenant to provide the deposit at a meeting to secure the tenancy, say a week before the tenancy starts.

You protect that deposit, create the PI, add it and all the other paperwork as appendices to your tenancy agreement, then you create the two copies and have the tenant sign both including signing the copies of the PI, Gas Safety, Energy Performance and How to Rent. All of these are done when you hand over the keys and go through the inventory.

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Grumpy 6th February, 2017 @ 15:14

@mr spaceman
To add my wee penny's worth to davids excellent advice....

Try small claims court. It's limited to £10k claims but there is little downside for you. Win or lose you will notI get hit with the other sides a legal costs.

Folllow davids advice but use the small claims track and file for damages of £10k

They will likely try to brazen it out but if they provided incorrect advice as you say, they will NOT want you to file the claim with the Court as they will almost certainly lose.

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Barry Bethel 10th June, 2017 @ 17:20

Ok, so I have a slightly long-winded scenario, tenant in a property for 7 yrs. All great from both sides, no rent increases from me and rent paid on time from them. Moved out and now filling for deposit not protected, via a claims company.

So they moved in in 2009 and only paid the rent, there was actually a contract signed showing a deposit taken and this was then to be paid later that day or week (I cant remember the exact details it was 8 yrs ago) I got a call the night of her moving in saying she couldnt afford deposit, not a good start and I did say she should leave but I called back and just said sign a new contract and we will say no deposit. So she signs new contract and sends it back.

Fast forward to now she sends me old contract and says where is my deposit protected? At this point I have been living out of the UK for 2 yrs didnt have access to my paperwork and just assumed she had paid deposit due to contract she sent, I literally couldnt remember, it wasnt a huge amount so I actually protected it without too much thought.

She then sends a letter before action, so I call her up and we agree on deposit being returned and an extra amount for a bill.

There are various email exchanges but this is also agreed on the email and I forward over the amoutn for a bill and then say the rest will be paid on leaving.

She then gets a no win no fee solicitor on board.

I look into it further on return to UK, I realise my mistake that she never did give a deposit, see my updated contract (only a scanned version, 1st one had witness this one didnt as I sent in post) look at my old bank statements and it shows just the rent going in nothing else. (she has since said she paid deposit via bank transfer and rent via cash, I dont accept cash, never have, my witness to my signature will verify that I didnt get any cash).

So yes I protected, late a deposit I never got. So the way I see it she will use the 1st contract and say a cash payment. My defence is no contract and no payment, plus she already accepted an offer from me.

We are now at the stage of court, I got an initial letter from claims co. called them up to tell them all of the above then the next thing is I get court papers. I have to file defence in 3 days, havent even seen all documents as my post hasnt come but luckily got main bits on email. Its a part 8 claim.

Also when she left I had to pay £5k to make the place habitabal for new tenant.....

To defend I was quoted inital costs of £1000 and they have no cash so no point claiming costs from them.

I have offered the equivalent deposit back twice. see what they say but that would be less than costs to fight and expense of going to UK to court.

My defence, no deposit paid and a settlement reached (all be it on email) anyway. Do I have a good case? Also can I counterclaim on this procedure?

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David 10th June, 2017 @ 18:40

OK you are flipping back and forth so let me make this clear

YOU DO NOT HAVE TO PROTECT A DEPOSIT THAT YOU NEVER TOOK.

If your emails make it look as if you admit you did then she can and will use that.

For the email you want to use you will need the email header to show it is genuine and not fabricated.

If she says she paid you the deposit in cash it would not be on your bank statement

It is hard to prove a negative, it is your word against hers.

You have a choice, fight her tooth and nail or settle, I hear that you say you never took the deposit but she will say you did and why would you protect a deposit you never took.

In the absence of evidence the Judge is going to consider probability.

Do you have a signed copy of new contract you allege she signed? If you do, then you should have started by asking the Court to throw it out on the basis that no deposit was ever taken, that she has submitted a previous contract that was voided because she could not afford the deposit.

You say she signed a new tenancy agreement, does it say this contract voids previous contract? It would be helpful if it does.

It is now 3 days before, you have had 28 days and it is a weekend!

If you are not prepared to settle then you might as well issue a claim under the tenancy agreement for damages you say she made, £5k for decoration after 7 year let is not damages. You will need evidence of the damages and where it contradicts claim. You will need to file an additional claim and pay court fee for Judge to hear that at same time.

Even though you say she has no money it is worth going for it if you have to be in court anyway, if you win you get a CCJ against her, if it is over £600 you can instruct high court bailiffs for £70 when she has money in the future.

The Counter claim the no win no fee company will say to her that they are only no win no fee on the S21 claim, they will want her to put down some money for them to act on the counterclaim, it is like a P O K E R game, you have to up the ante and sometimes bluff albeit that it may cost you.

I suspect that the reason she is carrying on with them is that they are only no win no fee if she sees it through, in other words if she settles, they want a fee. So she carries on.

You sound very disorganised, this will work against you in Court, considering how you screwed up in the beginning it is astonishing that you did not get her to admit to more stuff.

Remember your emails to her, if you wrote one stating she never made a deposit but you wish to settle to avoid fees and she replies to that but does not dispute the lack of payment then that helps.

So decide, either pay whatever they are asking or get a decent solicitor and fight it. I say this because if you are this disorganised you will have trouble laying out your case concisely.

Anthony Gold Solicitors in London are specialist in this area of Law but they will not like you coming to them so late in the game.

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Barry Bethel 11th June, 2017 @ 17:08

Thans David for your detailed reply.

Yes I am all over the place. Few reasons for that as I am in Portugal I only initially saw the documents on 1st June, still not seen all of them as not got post yet. I had 14 days from 30th May to respond, so 13th June. This is a part 8 claim so not 28 days.

Also, unfortunately, my father in law passed away on 3rd June, so my wife has gone to UK to sort that and left me with 2 kids 6 and 4 and I have a chartership exam on 15th June I have just taken 2 weeks off work to study for so its been slightly hectic to say the least.

I was thinking of using some of the above to plead with judge for more time, spoke to othersides solicitors on Monday to ask about extension they were not interested. Will my situation just look a bit pathetic to judge?
Would he/she think about any extensions on the basis of it or has he heard it all before?

Since then I havent had time to deal with this. Was quoted £1000 to defend so just thought I would offer otherside this to move on, which I did do yesterday with a time of tomorrow at 1pm to agree. So yes state I am now I would rather settle and move on.

As I write this I know I should be revising instead so its time I havent got.

Anyway my defence;

- I have a contract with a signature on dated after 1st contract saying nil deposit
- I have a letter I sent with this saying scrap the previous contract, although that letter is only a word doc on my file as I obviously just sent it out with my signature on.
- I also have an agreement of 1 times rent plus other costs which we agreed to in an email, with header on email. In the claim they say I have not been willing to negotiate, I would say this proves I had (although in hindsight I shouldnt have at all and reminded her of nil deposit)

In terms of damage,
- £1,500 for redecoration, walls were falling to bits after she had pulled old wall paper off and re-painted, Had to go over the awful repainting of rooms that were turned different colours.
- She pulled out curtain poles leaving holes in walls
- New kitchen but to be fair old kitchen needed replacing so not their fault.
- fridge missing,
- Cooker and hob beyond repair, replaced
- washing machine missing.
- she added a shed and patio, so taking that out, its old and shabby
- she took out carpet and put in crappy lino, replaced with carpet.
- She had dogs and cats and rabbit, so done a deep clean of carpets etc as didnt trust her cleaning, she actually said to me she doesnt have to clean the place when she leaves... (really, some rights she has)
- She had other people living there without my written consent.
- Broken window
- Garden was a real state and needed a garden to sort it all out.

My big issue with the part 8 claim is its seperate from my claim, so says otherside solicitor. I can see they dont see this as a dispute that could be countersued against, they use part 8 so this doesnt happen as I suspect many landlords would countersue if they could but this way the countersue has to be a seperate court case so good route for the no win no fee solicitor. but I have been told that I can challenge the part 8 claim as this is a 'substantial dipsute over a fact' i.e. I didnt get a deposit.

Yes I am slightly all over the place, I did actually take an old employer to court 7yrs ago (won) but could have got more had I been more organised and not fretting so much in court, the judge told me this and he was visibly pissed off with me when I was looking for documents, adding to my already stressed state at the time.

My next step;

See if my offer is accepted (2 times deposit back to other side, total) so 1 times deposit and deposit.
If not write witness statement,
Will ask for it to be thrown out based on my revised contract but If I did that would I also mention the agreement we made on email, and that I want to countersue?

Part 8 claim says all my info has to be in by 13th June if anything presented after that then it could be not used.

Also a court date has already been arranged, I presume as its this part 8 claim basis. Will also give those solicitors a call that you mentioned.

Thanks again for guidance. will report back.....

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David 11th June, 2017 @ 18:25

@Barry

I would send a fax to the Court first thing on Monday, you need to call the Court and make sure someone picks it up and puts it in front of a Judge on Monday.

In your letter you say:

This matter has only just come to your attention and that you would like to formally request that the court dismiss this vexatious and potentially fraudulent attempt to deceive the court which is totally without merit as no deposit was taken.

As such there is no case to answer and any claim under Housing Act 2004 Section 213, 214 and 215 and later amendments simply do not apply.

You simply explain briefly there was an initial tenancy which was rescinded and replaced because the tenant could not afford the deposit. You enclose a copy of the said tenancy agreement, mention the dates of the two agreements. You can print to pdf the original letter you sent and enclose it. (LATER at a hearing as long as you do not re-save it under same name you can forensically prove the time it was created).

Keep it brief and to the point, include dates do not include shit they do not need.

at the end of that you say, should the Court decide not to accept that you would like to make the following requests:

Request that the case is not suitable as a Part 8 claim as the matter is extremely likely to involve substantial dispute of the alleged facts.

You also say you wish to file a claim of your own for breach of contract you would like both cases to be heard together and that as the value of your claim may exceed £10,000 and includes an allegation of dishonesty by you of the tenant, it is unlikely to be suitable for the small claims track.

Say that you would like time to file that claim as you have only just received the paperwork because you live in Portugal.

You can pick from any number of other reasons that enable a part 8 claim, I can't say more without seeing the claim

https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part08

You say that if the Court decides that the case does continue you would like to request a 3 hour hearing as there is a lot of complex evidence you would like to present to the Court in order for a fair hearing (these are few and far between so may delay it)

Finally you say that you would like to request a postponement of the hearing due to extremely extenuating family circumstances, namely:

Death in Family
Are in middle of professional services exams
Not being served in a timely manner as in Portugal
Stuck in Portugal as sole parent while wife dealing with bereavement
Need time to prepare your case and consult with a UK Solicitor

Get this done NOW and then email and fax it tomorrow morning to the Court, you then need to call the Court to make sure someone picks it up, mark it URGENT and put the case number plus who vs who etc

I will save this now so you have time to prepare and then move on to the case itself.

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David 11th June, 2017 @ 18:44

DO not wait for 1pm tomorrow, there is nothing stopping you requesting this is thrown out.

Have you used Without Prejudice in your all your communications with Tenant and her solicitor. If you had they would not be able to present such papers to the Court as evidence.

I think you may have a case for complaint about the conduct of these Solicitors to the SRA, it seems to me that if you have advised them about the replacement tenancy agreement then Principle 2 applies. To continue when they know the matter is fraudulent is not acting with integrity. Which automatically brings in principle 6, but fire that off after.

Remember they just want to have a simple claim where there is no dispute, this really is far from that.

For now focus on getting it thrown out or in the alternative getting a postponement and conjoining the claims.

You REALLY need representation. I can and will explain which of the above is relevant but you need someone in Court for you if AG are reluctant to Act then let me know the approximate area of the Court and I will recommend someone else.

If it were me I would be so pissed off with her that I would rather pay money to solicitors and hit her with a huge debt which you get HCEO's to enforce forever.

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Barry Bethel 11th June, 2017 @ 18:57

David,

Thanks again for this, just a quick thought. This seems to be going for the jugular and potentially ramping up costs etc. 3hr hearing, over £10k. The deposit she is claiming was only £450. I dont have time or inclination to come over to UK to go to court and like I say solicitors are not cheap.

My main concern is my stupidity at putting it in the deposit scheme, its like you say, he said she said.

Would you say this tactic is to essentially to scare them off with the countersue and breach of contract?

My issus with my evidence is, its a scanned contract from 2009 not the actual original.Also the one I signed with her has witnesses on it this one doesnt only her signature and mine.....I have a bank statement showing just rent but its the he said she said thing.

I do have a few bits of dirt on her from this year, my plumber saw blank invoices ready to be sent to me (he will witness this for me) She then sent these to me and I paid them. She fabricated work that needed doing and my plumber said all was fine, sob story from her when he saw her. I only paid as I wanted her to get out of place.

Maybe if I go with your tactic but reduce the amounts of claimant as its not going to be above £10,000 potentially £3 or £4k for my countersue and hers is £1,900 plus costs so far.

Last quick question, if I settle before for say £900 would I then have to pay for her costs on top or is that it?

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Barry Bethel 11th June, 2017 @ 19:06

David,

Yes just seeing your last post, yes I am very annoyed at it all but to be honest right now I have other things on my mind, i.e. supporting wife at this traumatic etc.

So I have almost got mad and got over it... so want to just get it out of the way. I see the balance of probabilities thing as the thing I dont want to get involved in, £1900 is too much and solicitors costs on top is too much again so if I spent half of the above and got it out of the way I would right not be happy.

I wouldnt have been happy 2 weeks ago but alot has changed in that time so right now this is a headache thing I want to walk away from.

Will wait for this deadline tomorrow though as the court has said they would accept an email and the final date is tuesday, so I have a few days....

I may well feel ready to fight again in a few weeks if its still going.

I am up't North Leeds area, this is Grimsby court. House is in Scunthorpe.... less time I have to spend over there the better.....

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David 11th June, 2017 @ 19:37

@Barry

As I have said all along this is all a game of P O K E R, it is not the cards you have but the card your opponent thinks you have.

The letter is not committing you to anything, it is simply giving you a stronger position, if you had come on here a day after the paperwork was issued you could have done these things a week apart.

If they throw it out you have won

If they throw it out of Part 8 you have won (the claim company will not do no win no fee).

If they postpone case for 2 months you win because it gives you time,

The way Courts work you really do not have time to wait till 1pm, nothing gets done and they will be bogged down with paperwork from other cases.

I have given you my suggestions, they can only work if you act on them.

All you are doing here is giving yourself proper time, otherwise you might as well bend over and grab your ankles.

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David 11th June, 2017 @ 19:40

The 10,000 is just to get it out of that track, when I say something it is for a reason!

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Barry Bethel 11th June, 2017 @ 19:44

Love it... I am in and thats my tactic, thanks again. Fired up again now....

Thanks again and will get back to my revision now and get all over this in the morning....

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Barry Bethel 11th June, 2017 @ 20:41

Also another quick note. If I send the letter then I obviously have not sent in my witness statement and evidence (apart from evidence of contract). There is an actual court date on these documents of 6th July.

I read somewhere that if they do not have the evidence then I cant use anything I do not submit by 13th June in evidence.

Therefore if they throw letter out and subsequently say, yes we can go down the part 8 claim route as per their instructions I will not have all the other info available for court if they do have it on the 6th.

Its set for 30 mins on 6th July.

Cheers

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David 11th June, 2017 @ 22:57

This is NOT to replace your submission, you ask clerk to see if they can put it in front of a Judge tomorrow say that you will have to fly back immediately if they do not, to create a sense of urgency.

The idea is to get this thrown out you then put in the full defence just in time, if no reply is made.

Make it personal, find the name of the person, ask if they can help you are you are out of the country. Etc etc

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Barry Bethel 12th June, 2017 @ 14:41

Court has said its unlikely a letter will be read and dealt with in time, so I will add a letter to my submission anyway and ask for it to be thrown out, or if not moved to a different process to the part 8 claim so I can counterclaim. Also going to ask for extension to it all, my wifes' Dad passing away is starting to hit home this week so wanting to put more time into helping her out than all this.... this is new to me as well as nothing like this has happened to us before.

Just a note I have tried to settle, initially between ourselves as I said and she accepted and I paid some. Then again I sent a letter 'without prejudice' with a timeframe as I said.

My question is the letter this attempt from myself to settle as its a without prejudice it wont be seen by court will it? So therefore even though I am trying to settle it wont show as me trying to settle, is that right? therefore should I just send a normal letter with an amount on and then it can be seen as an effort. (although does me trying to settle show a weakness that the court might think is me thinking she had a case)

Thanks

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David 12th June, 2017 @ 19:05

@Barry

Putting Without Prejudice means THEY can't use it as evidence, but you can decide to enter it or refer to it, if you enter it as evidence it will be taken into account, good or bad.

If you are going to settle it is going to be way easier to deal direct with the tenant, having a settlement agreement ready, that she signs is way better than dealing with the Solicitors because they are only interested in their fees. However, I suspect that they have terms that means she pays their costs if she does not follow through. If she is not aware of this, signs an agreement and takes your money by bank transfer, then you send a copy of that agreement to the court saying the matter is settled. The Solicitor will go nuts and come after her, which is why you need the settlement in writing. You being out of the country makes this option difficult.

Many deposit protection claims are dealt with in response to a S21 with a counter claim, they can remain part of the small claims track and avoid costs.

However, the reason they have gone Part 8 is because it is not usually dealt with by small claims track, albeit that if a matter is dealt with quickly at assessment then there can be a limit on costs, but this has been abused in the past which is why I suspect they use it!! Their whole game is to use "cookie cutter" law, a series of processes that they can put down timesheets for but in reality only involve gathering of the facts like tenancy date, names of parties etc, all of which can be done online via a secure login.

As I said yesterday, you need to get this cancelled, make sure that is at the TOP OF THE PAPERWORK or it will be missed. The clerk can get it kicked if the fact are simple enough.

So it needs to be simple, first of all make it clear in the form that you would like to submit that

1. There is not case to answer as NO DEPOSIT TAKEN - refer to page 1 of bundle being the 2nd tenancy agreement

2. In the event that this is not accepted the case is NOT suitable for Part 8 as facts are heavily disputed and this will be complex matter.

3. You will be entering your own claim against them and would like them heard together.

4. You would like to request a postponement due to extenuating family circumstances ( as discussed

There may be a box asking whether you want a hearing and if so how long. On this part you repeat that the case should be rejected by the Court as no deposit taken but if they wish to continue then you need 3 hours.

You say in the event of this matter not being thrown out you would like to submit additional evidence, put it at the end of the bundle. Repeat it is long and complicated so not suitable for part 8 and ask for the 3 hour hearing (should be on the form they sent). Ask for leave to add additional evidence as you have not had time to file a proper defence as you live abroad and despite knowing your email address, paperwork was sent by snail mail.

Assuming they/you have not settled today..

You mentioned some dirt on her from this year regarding plumber etc. I did not really understand it but if you want to keep pressure up report her to Police for fraud and for bringing this case fraudulently when she knew that no deposit was

COUNTER CLAIM

DAMAGES
You can only claim what it it says in contract and only if that does not contradict common law.

You can't claim for redecoration as that would be seen as fair wear and tear, but if your tenancy agreement says she is free to decorate as long as she returns it to same decor as when it started. So she would have to put similar wallpaper up or pay for it to be done.

Damage to wall in removing paper is acceptable
Re-painting due to poor workmanship is acceptable
Re-painting due to garish colours is acceptable if tenancy says magnolia for example
Restoration of curtain poles acceptable - do not overdo it

Kitchen not her fault unless she badly damaged it.

Fridge is her fault, as long as it was on inventory, there should not be betterment, so price in a 2nd hand one

Cooker and hob repair - if they were broken they were your responsibility to repair.

Washing machine - see Fridge above, same applies

Removal of Shed - acceptable, if unauthorised

Carpet/Lino depends on what tenancy says, some might say lino was an improvement, she was there a long time.

If you authorised dogs, cats and rabbit, then it is down to you, if tenancy forbids it, then clean up and floor damage become acceptable

If the tenancy agreement says she has to leave the property clean and tidy, ready for let, then she has to do so, especially removing her junk.

Other people living there, should have done something at the time, you can mention it as part of claim to justify decor and flooring, call it overcrowding, subletting etc and refer to term in contract.

Does tenancy agreement say she has to keep the garden maintained at her own cost? If so permitted

I hope you were able to speak to Solicitors today.

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Barry 12th June, 2017 @ 19:55

Some great info David,

I have spoken to solicitors, via my legal insurance so they gave me advice over phone without fully seeing all the documents.

I feel I have all I need info wise and the tactic is to write the letter as per what you have said above with those similar points in it. I didnt get that off today as the clerk pretty much said there is no way its going to be looked at before tomorrow, she was adamant. I see my evidence as enough to, if not get it thrown out then enough to mean it wont go via part 8 claim, as its a serious dispute over a fact. I will also send in a witness statement, as tomorrow is my last day so I will send info in but request for longer for further evidence due to circumstances.

Not settled yet

There isnt a box for asking for a hearing it just says I object to claimant using this procedure and the the reasons for this. Which I will add.

Would you say bother with a witness statement at this stage?

In my witness statement I want to add that I have already agreed a settlement on this for £670 and paid £220 of this. But my thought about that is that agreeing that amount does amount to me agreeing she had paid a deposit allbeit I did that just to get her to go away at that stage, then she brought on the no win no fee guys so I had to look into this alot more and thats when I got my old contract from old computer in UK and realised my mistake that she hadnt paid a deposit.

I rent out a few other properties, saying that I have never not put the deposit in a deposit scheme in the past, would that help in anyway? Or just adding undue fluff.

Cheers.

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Barry 12th June, 2017 @ 20:10

Also the letter I am doing to the court, do I send a copy of that to the othersides solicitor?

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David 12th June, 2017 @ 21:35

@Barry

If the bundle is too big they just file it and send a copy to other side, you have to get them to see that you are, in the first instance asking the Court to throw out the case as no deposit was taken. You have to get someone to look at that and it has to be first thing in the morning because these people get bogged down by 10am.

For the rest of the bundle it can wait till the end of the day, If you can't manage this till later then do as I said above.

So yes the forms vary, so you make it very clear you object to part 8 and why.

You have to wipe their arse for them, keep it succinct, request that this is not part 8, quote the CPR reference and say it is not going to be a quick decision and there is a counter claim.

You do NOT send to other sides solicitor, Court will do that, do not give them any advantage (time). They will probably not be asked about part 8 unless the clerk leaves it to the Judge to decide.

You need to put in your bundle all the evidence you want to rely on in Court. Stick it all in an appendix, so other side do not know what you are going to use it for, just that it will be used.

This business of her already agreeing a settlement is a second breach of contract, it has emails to support it and she took money.

She sounds like a really dishonest person.

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Barry 13th June, 2017 @ 10:51

So I sent the letter this morning.

I spoke to otherside and they would not accept the offer of 1 times deposit plus deposit. I sneekily called claims company and said I was a new client. They told me if this was from a tenancy of 8yrs ago they would recommend taking an offer of 1 times deposit.

Anyway when I was speaking to otherside they told me that there were also all of their costs. I am speaking to a solicitor later but if I make a without prejudice offer of above do I then have to pay all the costs on top of that? Seems to me she is getting steamrolled into keeping going so lawyers can get there fees.

I want to now just offer 1.5 times deposit, if I do so is there a way I can do it without also paying for other sides costs? Surely if I went to court then I could show I am willing to pay more than the minimum but then would court still award them all these un-necessary costs.

Also I got one letter from other sides claim company and called them up telling them I had already offered which had been agreed on and she didnt actually pay a deposit, then next I hear is court. Surely there has got to be some in between here... warning etc??

Otherside say they have witness statements to the rent being paid in cash to me directly???.... Wondering what else they would bring out of the bag that I have no inclination of trying to defend or deal with.

Just want to pay something and get rid of it, have no time for court...

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David 13th June, 2017 @ 13:27

@Barry

You do NOT have to pay their costs unless you agree to pay their costs.

To be honest if what you have said is true there is no way I would be prepared to settle this for anything less than it cost to file. As they brought the action they have the Court fee.

I do not understand WHY you would want to return a deposit you never took?

I do not understand why NOW after realising no deposit was taken you would pay more than 1x the sanction to make this go away.

Your defence is filed, wait to see what is said by Court, they could throw it out in a week, they could kick it off Part8 and you have until July before the hearing.

They want to settle because they have screwed up, now to encourage you to agree they are trying to intimidate you, remember this is P O K E R!!

I do not understand how they can have a witness, unless you have not been telling us the truth, otherwise you would want to challenge that not cave in.

I would be writing back saying

"I refer to your recent assertion that there is some mystery witness, well there were only two parties present and I look forward to that person attending Court. This matter is fraudulent, you and your client are well aware that the original tenancy was rescinded and replaced because she could not afford a deposit.

I have evidence of other fraud committed by your client and will be bringing my own witnesses to court.

No Deposit was taken and now you allege there is some mystery witness, well you have gone too far. I will now be filing a complaint with the SRA regarding your conduct in this matter. This is fraud and I will also be reporting this matter to the Police.

As for your costs, I respectfully suggest you get those from your client.

I have incurred legal expenses myself in this matter and am now preparing a counter claim.

The only reason I had considered a settlement was because we have had a death in the family and because I am outside the UK."

If you are a doormat they will walk all over you and wipe their muck on you. Right now the matter is before the Court, you are best to wait on their decision on kicking it out and on Part8.

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David 13th June, 2017 @ 13:36

@Barry

With regards to offers to settle, you put without prejudice and then decide if you want to show it later.

You can say to a Court that the only reason you entertained the idea of settling is because of the grossly unfair system in this country where claims companies can force you to incur legal fees for fraudulent cases so it becomes financially prudent to settle.

Right now you need to get your ducks in a row, get this plumber to sign a witness statement so he can't change his mind later. Write it for him so he does not have to think.

By any chance was this person housed by the Local Authority?

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Barry 13th June, 2017 @ 14:15

Yes put that letter before court ,told they are unlikely to read it today so getting all other evidence in today. Spoke to plumber who was pretty damning in his claim.

Look I do not want to give this person an inch but I protected a deposit and after speaking to 5/6 people on this they say thats my biggest admission. I have said I just put it in the insured scheme for £15 and would deal with it on my return to UK plus it happened 8 yrs ago so I just forgot what I did back then.....

I dont want to settle but to fight is costing time, spent all day on it again today and should be revising for my exam on Thursday..... I just thought offer that and it would go away. Also got scared at costs I was getting quoted to defend so just figured I would pay them to get rid of this. Remember going to court will cost mr flights accommodation and car hire in UK in July. More costs.... why bother.....

So I will file my evidence this afternoon along with witness statement, (this is what I now realise I need help with. Any chance you want to look at it???? email? hourly rate?

I just want it all to go away. not in mood for fighting, preparing for a funeral next week as well which is a drain....

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Barry 13th June, 2017 @ 14:34

Also just to note I didnt say on letter to court why I protected a non-existent deposit, should I send a note to suggest why.

Reason was I was told by agent to do it and I was told I just had to pay £15 and it would be insured by a scheme in Bristol, I literally just do that as it as nothing and I would deal with it when I got back to UK a few months later. I honestly thought nothing of it but I am keen to tell court why I did it, as this seems to be their main issue....

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Barry 13th June, 2017 @ 14:55

To be clear, above was meant to say;

I literally thought just pay £15 to insure it and deal with it in the UK, I didnt think it would be such a big issue.

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David 13th June, 2017 @ 14:56

I had not considered the flights etc.

If you just want this to go away, pay the settlement offer, pay the costs and it is gone.

However, evidence so far is that they keep moving the goal posts and can't be trusted.

Sorry, I am not able to help you beyond what I can fit in via this site.

Just be concise, with reference to bundle if necessary,

Opening statement to get rid of it, say not part 8, say you plan to counter claim so want it conjoined and postponed. Remember, this is P O K E R, the idea is to make the other side fold. But you have to be able to lay out your case or at least the evidence you will depend on, remember they will not know where docs fit in.

Start with the equivalent of a Management Summary, You want a Judge to glance at it, agree you have been shafted and just dismiss it or think "shit this is bloody complicated do I really want to waste my time on it, so grant the request if they do not kick it out (Alternative close).

Lay out sequence of events with specific dates very tight, with legal reference if appropriate.

At this stage nobody is saying you have to go to Court, just that you are prepared to.

There will be plenty of time to settle if you really want to.

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Barry 13th June, 2017 @ 15:47

David,

You have gone beyond the call to help here, I believe with your help and my chats with legal advice for my home insurance I have either bodged a job or saved a few quid. To be honest I didnt have time to get a UK solicitor anyway.

I have sent everything in, we shall see what the judge says.

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Barry 13th June, 2017 @ 15:49

Oh and as we have just spoken I have just seen an offer to settle at 1 times deposit and deposit. But £1600 costs for other sides solicitor.... ???? Seriously this was more than the initial claim.....

She said work done and the phone call we had today, Seething.....

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David 13th June, 2017 @ 21:12

They are scammers

Are they a claims company or a firm of Solicitors.

Do not name them but spell out their name backwards with spaces in between each letter, was any law firm mentioned on the claim? Mention them backward too.

I am disgusted because they bring the legal profession into disrepute.

They should never have taken claim once they realised there was an allegation of fraud.

I did warn you that they would try it on.

What you can expect next is an offer to reduce fee to £1000 or £500 for a prompt settlement. They they will offer to reduce to just the 1x deposit if you keep saying no.

It is an old game, start by asking for an obscene amount then make you work for a reduction, that is why they delayed and did not respond till last minute, to get you all stressed out.

Bar Stewards, I do not mind a tenant asking for their sanctions because it helps others remember and usually people settle, but these leeches are as bad as Car Accident and PPI.

Stay strong, remember it is a game, with any luck Judge will kick it, then they are well and truly shafted.

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Barry 13th June, 2017 @ 21:34

Strangely I feel a bit more comfortable and yes it all seems a bit of a game and they know my situation but were arses about it all.

tcetorp tnanet is the claims company and gpm lagel is the solicitor. I am dealing with the solicitor now. I got one letter from claims co and then straight to court nothing in between.

I havent thrown the fraud claim down their throat though, but they should know it by now. They seem just to believe everything tenant says. Saying that I did tell the claims co that I had no deposit and that I had a signed contract....

Did I say I rang the claim company this morning posing as a tenant as per my old tenant, they told me it was like the PPI scenario but they said if you get an offer of 1 times dep, they would recommend to take it. We had agreed on that before they were involved. They charge 35% of any win.

I know this solicitor has paid £308 for court already, they most have thought they had a case but why not just call me to try and settle, well I know because they get costs.

Anything I can do about the costs thing?

My game plan now is to sort out my own issues this week and then see what judge says about whether case will be thrown out or not, or if it will go down other route. Small claims, if it goes down small claims, which I want, will other side not be able to recover costs?

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