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

214 Comments- Join The Conversation...

Showing 164 - 214 comments (out of 214)
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Ian 28th July, 2017 @ 00:24

@David,
Hi again, sleepless night worrying so put it to good use doing research on this fantastic site and have read almost all comments in this blog and also the other blog 'I haven't protected my tenants deposit......'.
Two things come to my mind as partof the 'negotiation' that I need to have;
1) Can I withdraw the S21 notice (I know it won't change the fact the deposit wasn't protected but I am putting it into a deposit scheme now)
2) if I can withdraw the S21 and if the current STA ends on the 31st of August, can I just say that as the current tenancy agreement will be ending and I do not wish to issue a new one, I will give her 2 months notice to vacate the property after the end of this current STA?

Obviously this on top of the 'I'll give you a good reference' and 'you can keep the deposit' opening gambit.

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Ian 28th July, 2017 @ 01:11

OK I know I might be being a bit of a pain now so sorry if I come across as such.
Can anyone advise me what I should do regarding dates on the deposit scheme website. They want to know;

the date the deposit was taken (do I put 03/14)?

when the STA started (do I put 03/14 or 03/17, the current STA start date)?
Thank you

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David 28th July, 2017 @ 09:03

@Ian

Thanks for your kind words, it is no big deal really.

I understand your anxiety, but you have to just take a deep breath and resolve yourself to making the best of a bad situation, what will be will be, but hopefully I can give you some pointers. You should also see your own Solicitor and determine with them your way forward.

You might think you would have been better off using an agent but there are many out there who screw this up and you would still be liable.

I have just painted worst case scenario, but you really want to get in front of this before she receives professional advice.

You have to think about what you have to offer that she wants.

It occurs to me that she may want to stay, so that is another thing you can offer, I am guessing you had ideas to increase rent a bit to recoup boiler cost.

Regarding the deposit taken date, it is the original date you took it, I have heard one of the sites get tricky about this but if you treat it as one long tenancy you are best off, either is an admission of guilt but do not sweat it.

You are actually quite lucky because 2014 is not that far back, now the way you need to treat this is to always refer to the new tenancies as extensions. Luckily in housing law tenancies tend to be referred to as being "substantially the same".

I have seen cases that started just after the legislation came in that happen to have been replaced at the worst times and the Landlord ended up paying nine times the deposit. At the same time I have seen deposits protected but no PI issue and the Judge said "the important thing is the money was protected", he was wrong to do so because the prescribed information is as important as the deposit and if the tenant had gone to appeal he could have faced the sanction as well as court fees.

Now Ian I can tell you that people tend to be nicer to people in person than via email. So you really need to meet up with your tenant to sort this out. If you put anything in writing you must write "WITHOUT PREJUDICE" at the top so it can't be used against you in Court unless you submit it yourself.

So you meet up with your tenant, let's call her Tracy

So you call her up and say

"Hi Tracy

I have a few things to sort out at the flat and was wondering if we could meet up at the property, when would be convenient for you, I can do this evening from 7pm or anytime over the weekend."

If she asks regarding what, you can "mainly to do with your leaving; in fact I wanted to check with you whether you would like to remain in the property as it seems I have done some of the paperwork in the wrong order, so looks like I am going to have to cancel my S21 anyway, but I also need to do a pre-inventory checklist and a snagging list".

Now if she wants to stay you have a one page extension of the existing tenancy ready for her to sign.

When you get there you come clean

"So listen Tracy, as you may be a aware, I am a novice Landlord, this is my first and only property, I have just found out that I needed to protect your deposit in an approved Government scheme, I thought I had to keep it separate and safe so I put it in a savings account.

It turns out that I can be fined for this but I do not want to create animosity between us, you have been a good tenant and I am sure you do not want the hassle of going to Court which may end up going to appeal for mitigation and both of us could face costs if it went that far."

This is a bluff but it is also a fact, if you did get some crazy Judge who charged you for each tenancy then I would suggest seeking an appeal and that would put her at risk of fees. As you will have seen if you read all the comments this is always a game of P O K E R and I have seen some bloody minded Landlords go to Court because they would rather make the tenant work for it, question them in Court and so on.

So back to Tracy

"So first of all Tracy I wanted to apologise for this oversight, I have protected the deposit which I did as soon as I found out I needed to, this is your deposit protection certificate and here is the prescribed information I have to give you, this is called "how to rent" it is a government document created for this purpose. I also have to give you this energy performance certificate and this is your Gas Safety certificate. There are two copies of each, I need to sign and date one copy and you need to sign and date the other, we then each witness each others."

Now if you have not got an EPC or Gas Safety certificate, adapt above to say "I need to get an EPC/Gas Safety check done, when would be a good time".

Under deregulation act your S21 is void if these are not done so you might as well cancel it if that is the case.

Back to Tracy

"So Tracy, you said on the phone that you would actually like to stay on as a tenant, well let me put my cards on the table.

As you know I recently paid out £3k for a new boiler, this hit me pretty hard as I do not have financial reserves, I was advised that I should increase the rent to recoup this as it has gone up about £150 a month in this area. I did not want to push that on you because I figured you might want to find somewhere cheaper so I decided to end the tenancy when the current one comes to an end.

Now I know I should have probably discussed this with you first but I was really worried about how I was going to pay for that boiler.

What I was hoping is that we can come to an agreement that works for both of us, how do you feel about that?"

At this point you hear her out, it will give you clues, she may be out for a pay day but it would actually be very short sighted of her because she could have a lower than market rent if she plays her cards right and you could offer her a 3 year tenancy, you put that £150 in her head but them come back with rise of just £50 but be prepared to keep rent as it is.

You could also structure the new tenancy agreement so she has annual break clauses and you do not, so she has more security than you, alternatively you could just give her option to give you two months notice. A way to do this is to not extend the tenancy agreement at all but have her stay in the property, this way the existing terms of tenancy agreement apply, but you have a separate "Settlement agreement" that sets out the that you will not give notice to quit as long as rent remains paid and terms of existing tenancy are met. You add to that a lump sum of say £500 or even 1x the deposit, a positive reference and maybe you offer to redecorate (which you would have had to do to get maximum rent on a re-let).

So to be clear, if you do not extend her agreement the law creates a Statutory Periodic Tenancy, under such tenancies you still have to issue S21 notice to quit with two months notice but she only has to give one months notice.

It is up to you, but go there armed with the agreements to sign, even if they are very basic, they just need to have settlement agreement at the top, a date and what is agreed.

The less onerous the better, I have given examples in previous posts, leave a couple of lines where you can add things for anything she wants to add.

Have two copies and you both sign and witness each others. It would be better to have a 3rd person as a witness but it will do, if you brought someone along it would intimidate her and that is the last thing you want to do.

She may come back and say she is entitled to 3x the deposit, in which case you point out that the Localism Act 2011 changed it to between 1x and 3x the deposit and there is case law (mentioned in previous posts) that allows a Judge to take into account mitigation for inexperienced Landlords.

If she mentions a claim firm you can say

"you could go that way but it will cost us both more, I have taken advice on this and they would take a 1/3rd of your any sanction or settlement, they also use a different track, so while they are no win no fee on their own legal fees, you could still end up paying my legal costs and I would fight this to appeal. However, I really want to keep things amicable, which is why I am prepared to consider extending your tenancy, giving you a preferential rent, a reference and of course cancelling the section 21. How do you feel about that?"

Now she could go either way, she could say she wants to think about it, in which case you come back and say "I understand you might want to think about it, I would too, is there any aspect of this you need help on, can I help"

Keep the whole thing as friendly as possible. Ask her what her other alternatives are, had she found another place?

She may have gone to Council and may be trying to get into social housing, you could point out that usually involves a year in temporary accommodation with some very vulnerable people and is a real lottery about where she can end up as social tenants are only allowed to refuse 3 places.

If she does not want to stay or is just determined to push ahead for a pay day (because if she has kids she has a crack at social housing for example) then so be it.

Of course you would tell the Council that you had offered to extend her tenancy for 3 years, they would then cancel her application on the basis that she intentionally made herself homeless. Do not say this as a threat, you need to keep her sweet but have it in reserve if she gets stroppy, always come back to "I really want to keep this amicable".

I hope this helps Ian, do not worry, you sound like a reasonable landlord and hopefully she is a reasonable person too. Whatever happens, feel free to come back and ask more questions or update the thread.

I have made certain assumptions here as best I can, there is an old saying "it is never what they tell you but what they don't tell you that matters" so I realise there may be more to this. At the same time do not assume your tenant knows what you know about the legislation, even if she did, she would have to fight it all the way and that is not pleasant for anyone, it is always better to settle and 1x the deposit is a result for most tenants.

Again, do speak to your own Solicitor.

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Ian 29th July, 2017 @ 20:40

@David,
Hi, I thought I had replied through my phone but it doesn't look like it saved.
I wanted to say thank you so much for you very detailed advice. It has helped me a lot to know that there is a light out there somewhere, I just have to find the right tunnel!
The latest development is that I received a text on Friday saying she had vacated the property.
However, upon inspection the place is trashed. Several new internal doors will need replacing, carpet has blue paint or ink on it, there is mould and mildew in every room and the ensuite is like something from a horror show. At someone the extractor fan has stopped working and there is black mould everywhere. Not so bad, I hear you say, a bit odd sugar soap and some paint and hey presto. I am not kidding when I say that there is no way to salvage this bathroom. I will need to remove the plaster board walls and ceiling along with the shower cubicle toilet and sink and completely renovate the whole room. If I could post a picture or video here you would be horrified. I am looking at easily two if not three grand to put all of this right, let alone the fees and interest I should have charged for all of the missed/late payments. I honestly think if a judge saw my video inspection of the property he might feel sorry for me a little bit.
However, I also take on board your advice and still think (especially on the evidence I have found today) she will be grateful to get her deposit back.
As the scenario has changed and she has vacated the property with 1 month left on the tenancy and considering the condition of the property today and a missed rent payment last month, how 'forceful' can I be emphasing these points before I then say that I am happy to give the full deposit amount back.
She is not returning 2 attempts I have made to call her so a f2f or telephone conversation is not an option.
Happy to share my video through another site if you want to see it.....it is truly shocking!
Once again Thank you for your continued support and advice.

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mr.spacemaker 29th July, 2017 @ 21:21

@ian

Your tenant sounds very similar to mine. Long story short it cost me almost £20k in legal fees to get my tenant to leave and there was virtually nothing that was salvageable in the house. She managed to work out that the letting agent had made a mistake with the deposit (over 10yrs ago) and that I had missed the amnesty to correct this. She conned the agency into starting the S21 process, knowing that it would not be valid, and was able to use this to get legal aid and start a counter claim with a top solicitor without any cost to her. In the end I had to reach an out of court settlement as that was the only way to get her out quickly and prevent any more legal fees.

Your tenant probably genuinely believes that they deserve their deposit back so it's not as much leverage as you think unfortunately, especially as tenant/solicitor/housing services know that you will have to return it for not protecting the deposit.

Unfortunately for you, you would need to get pretty far into the court process before her conduct as a tenant would come into consideration. The legislation for non-protection of deposit is pretty straightforward and this is well known - neither legal team in my case even bothered looking at the state of the property as they knew it would not make a difference.

You need to settle as quickly as possible, before the legal costs start mounting up (or a claims company gets involved)

Explain that you know you are in breach of the deposit protection legislation and could be ordered to pay a sanction of 3x deposit but have had legal advice and are sure that the minimum sanction of 1x would apply, due to your inexperience as landlord, and her conduct as a tenant (arrears, damage etc.)
Say that you are keen to move on and settle the matter so you're prepared to make an offer for a quick settlement, without involving solicitors...

You are very lucky that they have already left!!

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mr.spacemaker 29th July, 2017 @ 21:48

@David

My new tenant finally moved in today!!

Gas Safety Certificate was a nightmare. Tenant was due to move in yesterday and British Gas came to do certificate in the morning but then said they couldn't do it unless the installer of the cooker came back and did a test first (he couldn't do it previously as gas was off). We tried all day to get another engineer to come out, but we weren't successful in the end so it had to be put off until today.

The inventory was done by a specialist who checked the tenant in this morning....
The tenancy agreement from the letting agent is an online one by goodlord. The tenant had already checked and agreed to it, and the letting agent was not available to amend the tenancy agreement - specifically the date (one day later) and the details of the deposit protection service (DPS instead of TDS); so I signed the agreement anyway, even though it was slightly wrong.

I will get the agreement amended on Monday and then get the tenant to sign the new agreement. Will it cause me any problems that it was signed after the tenant had moved in?
I have also written a separate document to accompany the tenancy agreement, which covers all of the contact details and also the details of the maintenance contract I have in place for plumbing, electricity, central heating etc.
It also requires the tenant to sign to say that they have received all of the contact info, DPS terms & conditions, how to rent guide, EPC, Gas safety certificate, and agree to next year's gas safety certificate visit being done by the letting agent IF he has been unable to arrange up until 3 weeks before the old certificate expires...

For now I have emailed this to him, attaching all of the relevant documents and he has replied to say that he has received the information and is in agreement with the terms.

SO, when I receive the deposit and protect it early next week (letting agent are sending me the funds), I will add this to the list, then send someone to get signatures for the following:-

1. Updated/corrected tenancy agreement
2. Additional info document
3. How to rent guide
4. EPC
5. Landlords Gas Safety certificate
6. Prescribed information
7. DPS terms & conditions
8. Deposit protection certificate
9. Copy of completed inventory

Have I missed anything? I realise that a lot of the time most of this is done electronically or with links etc. but I want to be extra cautious and get real signatures. The DPS terms and the how to rent guide are 30+ pages but I'm still considering getting every page signed!! Is it enough to get the tenant to sign to say that they have received them electronically and have read them?

Thanks again for all your help and advice, it really has been invaluable.

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Ian 30th July, 2017 @ 08:46

@Mr.spacemaker (168)
Sounds like you had a right nightmare of a time. I had read your previous posts and I empathise with you totally.
Luckily, in my case I have, as yet, not received any legal letters just a couple of threatening text messages.
I am hoping that with all of the very detailed advice I have been given on this fine site, I will be able to head her off at the pass and by offering her the full deposit back with out prejudice or recourse for further prosecution she will be happy with that.
If she does put in A claim then I already have building work quotes in excess of 2grand and a cleaning quote of approx £500. Add to that the fees and interest she owes for late and missed payments she would definitely end up owing me money.
Problem is the cost of sorting all of that out, legal, court etc. I am hoping that if I subtly point out what she could owe me she will just accept the deposit back and no further fuss will come out of it.

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Ian 31st July, 2017 @ 19:10

And the negotiations have begun......

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David 31st July, 2017 @ 21:33

@mr.spacemaker

Sorry for delay in response we have been having some internet issues.

I think some of those things may be overlapping, these days some of the tenancy deposit companies try to incorporate the How To Rent in their own docs and the PI within that. Problem is if they miss out stuff it is your neck on the line which is why I recommend the Gov versions.

Terms were 4 pages last time I saw them.

I do not think you should change the date of tenancy, if you have the Gas certificate now you are fine.

Your poor tenant must be thinking you are very thorough but after your previous one I am sure you do not want to take any chances.

You are right to get proper signatures because as you may have seen people dispute them, so a witness and date next to signature is important.

I would have made a video of the property and zoom in on any damage so there can be no dispute later. What I see a lot is people taking photos from far away and you can't see the damage.

I just hope you have many years of trouble free letting and recoup not only your losses but your faith in tenants.

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David 31st July, 2017 @ 21:52

@Ian

Same apology for delay.

So the goal posts have moved.

The principles are however the same

You each have something to lose and to gain.

Her going gives you one less thing to bargain with, however, if she left a month early then there are your loss of rent. Normally you would only be entitled to the number of days it takes to get a new tenant with you being seen to make an effort but if she has left it trashed then you can't rent it till that work is done.

So in assessing your position you need to consider your "hand", if you are just dealing with her then the max risk is 3x deposit if you got the wrong Judge but if she is using a claim co then they will add their fees which they make up as they go along.

If this does go to Court and you can be seen as having tried to negotiate then it works against them for not settling out of court.

So you said the negotiation begins, try to do it in person, ideally at the flat so she can see the damage.

The reality is that it is expensive to claim against tenants, you will have to prove that she is responsible for the mould, she will argue it is building that is problem. So try to get a professional report by a surveyor that says the damage is entirely caused by her. She may be seeking a similar report saying it was inherent in building and comes from damp proof course not being done properly.

You need to get an itemised quote from a builder for the works that need to be carried out. You will get nothing for wear and tear but the damage to doors and professional cleaning for carpets, maybe even replacement of a patch and having it sewn in professionally.

I think you need to adapt what I put above for the situation you now find yourself in, I am sure you feel like spitting nails but try to remain calm, listen to what she says and decide what you want your offer to be.

If she is not prepared to settle you might as well send her a letter before action in the small claims court, it keeps it cheap and her claim is likely to be in response to your claim. Do you have an address for her? If not do you have her work address or her parents?

Let us know how you get on.

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mr.spacemaker 1st August, 2017 @ 14:35

Hi David,

Apologies for the repetition - hopefully this will be useful to others!

For clarification, the tenancy agreement is dated 28th July, but the Gas Safety Certificate was not in place so I did not let the tenant move in, although I did allow him to store some possessions that night (he did not have a key, the builder let him in).
I'm not comfortable with the tenancy technically starting before the certificate was in place, but I obviously have evidence to show that the tenant did not move in until the following day (29th), after the gas safety inspection was done and the inventory was completed. I want the agreement printed and signed for my own peace of mind so it would make sense to amend it anyway, no?

1. The tenancy agreement is 30 pages but he only has to sign the last couple of pages, right?
2. The additional info document is 2 pages so I will get him to sign both.
3. How to rent guide = 8 pages (just get him to sign the last page?)
4. EPC = 4 pages
5. Landlords Gas Safety certificate = 1 page
6. Prescribed information = 5 pages (I think sign all pages as it's so important)
7. DPS terms & conditions = 5 pages (just get him to sign the last page?)
8. Deposit protection certificate = 1 page
9. Copy of completed inventory = TBC (just get him to sign the last page?)

Here is my additional info document template, just in case you have any feedback, or it's useful to others....

ADDITIONAL INFORMATION REGARDING TENANCY

PROPERTY ADDRESS
....

LANDLORD
....

TENANT
....

Date of the term:

Contact details for repairs:
British Gas Landlord's team +448001077798
Postcode:
Homecare number:

There is a full British Gas Homecare agreement in place and it covers the boiler, central heating, plumbing, drains, and home electrics. In the event of any problems, the tenant should immediately contact British Gas with the details above, and arrange a visit from the engineer.
They should then inform the landlord of what has been arranged. Regarding the annual boiler service and Landlords Gas Safety Certificate, the tenant accepts that if they are unable to arrange a visit for a convenient time by 7th July 2018, then they must give the Landlord’s agent permission to attend the boiler visit unaccompanied. This is to ensure that the Landlords Gas Safety Certificate is never out of date.

In the event of any repairs or damage that are not covered by the homecare agreement, the tenant should contact the landlord directly via email to discuss and arrange.

Contact details for Landlord:
Phone:
Email:

Contact details for Landlord’s agent:
....
Phone:
Email:

I, ........, confirm that I have received the following information:-

1. Contact details for repairs
2. Contact details for Landlord
3. Contact details for Letting Agent
4. Deposit protection service terms and conditions
https://www.depositprotection.com/documents/dps-insured-terms-and-conditions.pdf
5. Department for Communities and Local Government How to Rent guide
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/496709/How_to_Rent_Jan_16.pdf
6. Energy Performance Certificate for ........ (address & postcode)
7. Landlords Gas Safety Certificate for ........(address & postcode)

I, ........, confirm that I understand the process regarding repairs or breakdowns and will endeavour to arrange a visit from a British Gas engineer as soon as possible whenever there is a problem. I also confirm my agreement for the Landlord’s agent to arrange and attend (unaccompanied) the annual boiler service visit if I have been unable to have this completed by 7th July 2018.

I, ........, confirm that I will sign a copy of the prescribed information regarding the deposit and the deposit protection certificate, once the deposit has been received and protected by the Landlord. I understand that the landlord has 30 days to do this, from the date of receiving the deposit. I also agree to sign a new tenancy agreement once it has been updated with the correct date and deposit protection details (current date is incorrect due to check in being delayed).

Signed: (Tenant) Signed:(Landlord)
Name: Name:

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Ian 2nd August, 2017 @ 21:51

@David,
So after some back and forth with emails I got her to say how much she wanted back from the deposit. I said that I would pay this back. However, because it would take 30 days to return it from the deposit scheme she said this wasn't good enough she wanted it now. I said I would try to organise that as it is money I didn't have access to. Whilst all of this was going on she claims to have been o. The phone to the deposit scheme who have told her I haven't secured any money, but I had, I gave her the scheme leaflet, PI and the reference number. She still didn't believe me. Today I was able to send her the certificate and PI from the scheme.
Now she has said that I have fobbed her off and she is now has legal advice etc. The weather email was worded and the tone has definitely changed and had more legal terminology in it.
Can you advise me, if I admit I messed up not securing the deposit, but I did when I realised my mistake and agree to pay the whole deposit back to avoid court etc etc.....can I then counter claim for the (nearly) £3k I calculate she owes me in missed/late payments and damage to the property.
Also, does anyone know a good solicitor who specialises in this stuff? I think I'm going to need one!
Thanks to everyone for all of your help and support, it really has meant a lot to know I'm not on my own making these silly mistakes.

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David 3rd August, 2017 @ 08:55

@Ian

I know she is probably not giving you a lot of choice but as advised previously you REALLY need to deal with this in person and ideally at the flat, that is if you want to settle which is the best for all concerned.

I would NOT release the deposit until there is a settlement, a deposit is held for the performance of the tenancy agreement, she has clearly breached the agreement so that needs to be resolved.

At the same time you have made some legal mistakes and could be facing sanctions. You can settle that and even pay a sanction of 3x the deposit but she will be facing legal fees for breach of contract and damage to the property.

It is quite simple, first you say I am only prepared to reach a settlement on this matter in person because text and email loses intonation.

Once you meet you lay your cards on the table, you explain to her you both have legal cases you can bring if you do not settle and that you want to resolve things amicably.

You explain that you are very upset and disappointed as well as shocked to see the state she left property in and you estimate there will be £10k (or whatever it is) of work required before the property can be re-let.

You can say that in these situations the only people to win are the lawyers so you would like to settle but it has to be done quickly so you can get on with your life.

You say that you have taken advice and as a novice landlord you are confident you will face a 1x sanction if you go to Court but you are prepared to pay her that sanction now along with the return of her deposit as FULL AND FINAL SETTLEMENT of all S213,4&5 matters. In addition to that you will agree not to pursue her for the non-performance of the tenancy agreement and you will even provide her with a reference. However, for this to happen you need you both to sign a written settlement agreement within 24 hours.

You can explain to her that if she takes this to a lawyer she is either facing paying her own legal fees OR under a conditional fee agreement (no win no fee) she will lose at least 35% BUT is still at risk of paying YOUR legal fees and there may be other fees payable by her in certain circumstances. This is important because even if the Court were only considering the matter of the deposit they would take into account the fact that you made an realistic and genuine offer to settle very early on.

Even if she won 2x she would only get 65% of that, so if deposit was £1000 under the proposed agreement she gets £2000 and no risk of being sued. If she takes it to a lawyer under conditional fee, she may get the 2x deposit so £2000 but lose £700 and get £1300, however, the Judge will allow the damages against the deposit and may find her liable for more damages and may award you your legal fees because you offered to settle and she declined. So for a potential 30% more she is taking on a hell of a lot of risk and would have a CCJ against her which would affect her ability to get credit and more.

As I keep saying, this is a game of P O K E R so you have to bring your proper face to the game.

So you let her think about that but IF SHE DECLINES this is my advised strategy; you write a letter saying that to avoid legal fees you are paying the 3x deposit sanction but will be asking the Judge to ratify it when you bring your own legal action for damages. You give her that in a letter before legal action (part of CPR) which gives her one final opportunity to settle the matter at the previously proposed 1x deposit plus return of her deposit.

There is nothing to be lost by admitting your failure to protect the deposit, it is a material fact that you failed to protect within 30 days, this is proven by searching the 3 systems and it will show the date the deposit was protected. So there is no defence, just mitigation.

Finding a good solicitor is going to depend on where you live, but you want someone who is a good litigator and who has experience of going after tenants for breach of tenancy damages.

Now you might baulk at paying the 3x deposit but it will be easily eaten up by her legal fees if she proceeds.

Ian, I can only give you the advice, but if you do not take it then you go down a completely different road. I cannot emphasise enough how important it is to keep it friendly and meet up, you cannot deal with this over text and email. People like people, people feel intimidated by people, people feel guilty in front of other people. They feel none of this with paper and pretty soon Landlords and Tenants alike create their own "story" to justify their actions. She was a bitch and he was a bastard.

Do not let events control this, I have laid out the clear path to reach a settlement or minimise your fees, if it strays off that bring it back.

Do all your offers in writing and have them ready to sign.

BTW it is no hassle to release the deposit or if she signs the agreement (and ONLY if she signs the agreement) you can ask her to authorise the release if the deposit and you pay her immediately while you wait for deposit holder.

To be clear, she only gets the deposit back if there is settlement and that needs to be stated in the settlement offer and the letter before action, if you pay it back you may lose your damages case.

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InTrouble 9th August, 2017 @ 22:03

I am in a terrible mess. I am an ex-pat living in France who purchased a property with an existing tenant on a 6 month AST that ended in April 2015. My completion date coincided with the end of the tenants 6 month AST and l then granted him a 12 month AST via the agent who handled the sale (who l then employed to manage the property).
l was happy when the tenant said he wanted to extend for another 2 years. He had paid on time every time with no problems at all. Rental prices in the area had gone up so we negotiated a fair rent that worked for both of us. Year 1 @ £1000pcm and year 2 @ £1100pcm. The agent said it would be better to have 2 x 12 month AST agreements (April 2016 to April 2017 & April 2017 to April 2018) with the only difference being the increased rent for year 2.
The tenant was happy, the agent was happy and so was l until 6 months after the 2 agreements were signed...
My agent retired and recommended someone he knew to replace him as managing agent. I had no problems in following the retired agents advice, after all l had been receiving rent for over 18 months without a hitch from a very low maintenance tenant and a fairly 'cheap' agent... so no problems right?
It all started to go very wrong when the tenant and the new agent fell out over some minor decoration to the property. To cut a long story short things escalated (without my knowledge) and I am now faced with the following.
The tenant works for a well known organisation as a housing adviser.
The tenant stopped paying rent 4 months ago, apparently in protest about the new agent. The agent did not tell me about his disagreement with the tenant. I would have gladly redecorated the whole property had l known. The new agent 'advised' me to start possession proceedings under Section 8 for rent arrears, which l did. The new agent advised me that l could get up to £300 more per month, which l could.
The tenant has provided a defence and counterclaim and at the hearing it did not go well at all. The court appears to have taken his side and adjourned the possession hearing for 2 months for both parties to consider their positions. The agent arranged for the Solicitor to represent me as l was unable to return to the UK due to work commitments.
I couldn't get a clear picture of what happened at the hearing from the agent and spoke to the solicitor. He advised me that l had quite serious problems and interpreted what the tenants defence and counterclaim actually was:
1. The Section 8 Notice did not contain the prescribed information & was not in the prescribed format (I think the agent used an old notice).
2. I failed to provide him with a notice under section 3 of the LTA 88 (Solicitor says this is a criminal offence & a fine of £2500!). This was the first time l had heard of this notice.
3. The previous owner apparently did not want the tenant to know his identity (for some unknown reason). The tenant has complained to the court that the (retired) agent has put himself as the landlord on the first AST and failed to provide the 'true' landlords identity. The tenant says in his counterclaim that the retired agent/previous owner failed to provide the identity and therefore the rent was not 'lawfully due'. The tenant is seeking a 'refund' from me as l have (apparently) stepped into the old landlords shoes and therefore liable for the refund!
4. I failed to protect the deposit & provide the prescribed information for the 3 ASTs (2015 to 2016 / 2016 to 2017 / 2017 to 2018). I stupidly believed the retired agent who told me that because the deposit was protected by the previous owner and the tenant was the same that l did not have to do anything!
5. The tenant has made an application for the retired agent and previous owner/landlord to be added as a party to proceedings. Apparently because l failed to serve the section 3 notice they are also jointly liable for my failure to protect the deposit and provide the prescribed information under the 3 x ASTs.
The Solicitor wants me to pay £1500 on account so l can get a Barristers opinion but has warned me that it could cost many thousands to get the tenant out and if l were to lose than l would be liable for the tenants costs as well as being without rent...
The tenant has sent a without prejudice letter asking for the payment of £6000 plus a positive reference and he would move out in 4 weeks... The Solicitor said it would be cheaper to accept the tenants offer.
Confused? YES / Stressed? Definitely! / Losing sleep? Yep & turning grey! / Can you help to shed some light? HOPEFULLY!!!
Any tips would be much appreciated...

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David 9th August, 2017 @ 22:47

That is a duplicate post which the site owner may wish to delete, but I responded here:

http://www.propertyinvestmentproject.co.uk/blog/i-havent-protected-my-tenants-deposit/#comment

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Ian 10th August, 2017 @ 08:28

@David
Tenants has accepted deposit back which won't be instill the end of the month because of the 30 day money laundering rule by the deposit scheme. She has put it in writing that she won't pursue me for any claims now or in the future.
LforL were amazing and were able to talk me through my options moving forward. Once the deposit is paid back they have advised I pursue a small court claim for the (aaprox) £6k she owes me for repairs and unpaid rent, interest and fees. I know I won't see all of that and I won't get it all in one go (she is on benefits). However, it is now a matter of principle and she shouldn't be able to get away with what she has done to my property. Even if she does come after me for not securing the deposit the £6k I am claiming is way more than anything she would get as compensation.
Thank you for all your help and advice to date.
ps. What does &amp mean?
Thank you

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David 10th August, 2017 @ 09:13

@Ian

I think you think carefully about taking action, unless she has signed a legally binding settlement agreement this may still turn around and bite your backside.

You see it is not the sanction you have to worry about it is the legal fees of the no win no fee lawyers. They are typically £5k + sanction for a basic case that is not settled early, otherwise 3x deposit plus £1.8k for very early settlement.

If she is on benefits you will not get access to much of her income because it is already deemed as the minimum people need to live on and the Government committed to no rises in benefits for 5 years, so any Court is not going to award much, I have seen as little as £5 a month.

The risk as well that she can a DRO (total debt under £20k) or even full blown bankruptcy and your debt is written off forever.

I think the lesson here is more inspections and very specific terms in your tenancy agreements.

It is a virtual certainty that if you go after her she will counter claim, she will say she was denied legal advice, held to ransom over the deposit and so on. Normally she would be nuts to sign anything that did not say that "this is a full and final settlement of ALL matters between the parties".

Learn from the grief others have had, take a breath and move on.

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Ian 10th August, 2017 @ 21:54

@David,
As always very sound advice I hadn't fully appreciated the no win no fee side of things. Of course there is no fee for her because they get it from the other side.
Others have also told me to not stir up the hornets nest, take the medicine and be more careful in the future.
I will now humbly skulk into a corner, lick my wounds and seethe into a cup of horlicks whilst cursing myself for not doing better.....

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shell 14th August, 2017 @ 23:04

Hi, looking for some advice. my Flat was rented out to two students in sept 16 on a one year lease. Student a and student b. they were each to pay £500 deposit. A paid 1000 on their behalf which was put in a secure account rather than a scheme (genuine mistake) a was a model tenant and paid rent and bills on time. b was a nightmare tenant. fast forward to one month before lease is up. tenant b doesn't pay last months rent of 350£ and wants to offset this against her deposit. She is also in 600£ worth of maintance fees arrears. texts and arguments follow. her guarantor turns out to be a solitor and drops the bomb about the scheme and 3x penalties. What is the best way forward? there is only two months left on the lease- should both deposits be put in the scheme at this late stage? should we try to get both a and b to settle and sign a waiver for future action being taken? help!!

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David 15th August, 2017 @ 18:58

@Shell

Please confirm that you do not live in the property and that the agreement was definitely an Assured Shorthold Tenancy.

I only ask on the off chance that they were lodgers.

Was there one AST for both parties, with Tenant A as the lead tenant or did you have an AST for each Tenant?

Have you protected the deposit or are you hoping that they just go and do not hear that they have from 3 to 6 years to bring a claim for your breach? I would get in front of this and agree a settlement.

The deposit is taken against performance of the contract and for damages, your AST should say it can't be used to offset rent.

I would like to know what "600£ worth of maintance fees arrears" refers to?

What bills are they paying, how are you involved in their bills?

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shell 16th August, 2017 @ 08:19

i don't live in the property (i live overseas hence the ignorance) and they both signed individual ASTs but one paid the deposit on behalf of both (i'm assuming tenant b then paid tenant a afterwards)

Can they both claim for the compensation of I only have a bank transfer from tenant A and nothing from tenant B.
If they go down the route that tenant A was acting as a lead tenant then that assumes £500 each was paid? So i need both to sign separate statements of full and final settlements?

the deposit hasn't been protected as they only have two weeks left. I was going to put the deposit in a scheme now but unsure whether that would be the best action now? it would delay the return of the deposits because of the 30 day money laundering scheme? (i read that on here?)
tenant b has already threatened action so i'm assuming a letter of intent is onway? I informed tenant A about the scheme a few days ago as i was going to put the deposit in asap but now i'm not sure?

the rent arrears is what started the whole thing- tenant b wanted to use the despoit to offset the last months rent and i refused as that's not how it works and here we are....

the maintance bill is for factor that was pre agreed before signing the STA the tenants would split evenly throughout the year (billed quarterly by a management company). tenant A has been paying and tenant B has not. the rest of the bills they get to the flat and split between them so i can only assume they are up to date.

thanks for replying.

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David 16th August, 2017 @ 09:20

@Shell

Two AST's means potentially two claims, it is actually good because it sounds like Tenant A will not want the grief of chasing you.

It is also good because it is half the potential claim amount if Tenant A does not make a claim, Tenant B cannot make a claim for Tenant A.

I would not push who was paid or not paid or you will drag Tenant A into this.

You should seek a settlement with Tenant B perhaps including Tenant A if they are also seeking to claim.

The maintenance fees sound very high, in a year they are £600 for one tenant? What are these fees, I ask because of unfair contract terms, you risk other things.

It is never what people tell you but what they do not tell you that affects outcomes, so without identifying anything personal, are you able to explain how they got to £600, did you try to apply punitive late payment charges or is this place a Penthouse with fresh towels?!!

Were these maintenance fees part of the tenancy and therefore liable for the performance of the contract or were they a separate agreement with the "management" company.

Putting it in a scheme as soon as you become aware of the obligation is better for you if this goes to Court, the deposit companies also have an arbitration scheme for offset of deposit against performance of the tenancy agreement, it will obviously not allow for fair wear and tear, but will allow for arrears.

You could alternatively seek a private settlement, they have already suggested such a move by asking you to offset rent.

As always it is a matter of figuring out what you both have to trade. Seems to me Tenant B has a bill for rent and a bill for the Maintenance charge. You could agree to settle maintenance charge as part of a written SETTLEMENT OFFER, that includes the S213 sanctions, outstanding rent and charges. You might offer to write a positive reference, although I would hold this in reserve for the sake of other Landlords.

The risk you have is that Tenant A hears about the settlement and says "what about me".

What we have not established is the condition of the property and whether they will actually leave. If they stay the tenancies become Statutory Periodic. It is an old stunt to pretend you are leaving and say "Please use the deposit as the last month's rent, but then to stay for 3 months to generate yet more to barter with, so the settlement agreement should say it is contingent on them vacating the property.

If there is damage then you have to choose to leave it out and come after them both separately or to encompass it and both tenants, the latter would be my preference because Tenant A can come after you years later. You need to shut that risk down or else live with it over your head for years.

You can return the deposit to Tenant A if you want to avoid using the scheme, depends if there is any damage to property.

If the Tenant B comes at you via a claims company all bets are off as far as a settlement agreement, they will not allow the tenant to settle unless they pay a fee (£1500 in one case), if it goes to settlement company you have no defence and so are best to settle the S213 sanction early via them but then sue the tenant for all those fees and arrears, but let me know what they were for because if they were punitive fees you may be wasting your time as they could be deemed as unfair contract terms. Punitive fees have to reflect actual costs, I have seen ridiculous £30 a day for each day rent is late, I saw one Landlord end up getting case thrown out and having to pay tenants legal fees, which were substantial.

In the scheme of things, you want to reach a settlement BEFORE tenant B signs with a claims company.

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shell 16th August, 2017 @ 12:18

Hi David. The £600 was a rounded figure for rent and maintance arrears. last months rent approx 300£ and maintainance fees 300£.
the maintainance was agreed verbally and not in the STA (another mistake on my part so prob unrecoverable?) and was billed quarterly. no late charges have been applied. Tenant A has said they will not be pursuing a claim but we will get this in writhing and have offered her compensation of the final maintance fee waived. Her deposit will be returned in full.
Property has not yet been inspected but tenant A has reported the fridge is damaged and most likely needs replaced. I am not anticipating much other damage but i know i could always be unpleasantly surprised.
Still in a bit of shock here and keen to get this settled quickly.

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David 16th August, 2017 @ 12:26

@shell

Get agreement in writing with Settlement Agreement at top.

Biggest issue with fridges is people turn them too high and ice block forms in back, they need to be turned off for minimum of 24 hours so it melts, then turned back on at low setting. If Ice has not melted might need 48 hours. Worth getting a fridge thermometer from Wilkinsons for £2 so you can actually track temp.

Of course it could just be faulty (gas or thermostat).

A friend of mine gets all his tenant white goods from Freecycle, he stores them in his garage till they are needed.

Yep one persons idea of "property is fine" can mean a very different thing to another persons.

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shell 16th August, 2017 @ 14:14

Thanks David i appreciate the advice

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shell 16th August, 2017 @ 20:14

David on getting out the lease to write out settlement agreements i have discovered they both co signed a lease with an agreement of 1000£ deposit. tenant A has agreed to sign a full and final settlement. if tenant b refuses to settle where would this leave us? the deposit was paid by tenant As parent by bank transfer with the assumption tenant b repaid her half (we have no evidence or confirmation of this). do they still have a case under lead tenant clause? (tenant A and B are at odds and not speaking) just wondering where i stand before i send the settlement offer.

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David 16th August, 2017 @ 22:13

@shell

That is why I asked you before, Civil Procedure rules state that all must be parties to the claim, however....

19.3

(1) Where a claimant claims a remedy to which some other person is jointly entitled with him, all persons jointly entitled to the remedy must be parties unless the court orders otherwise.

https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part19#19.1

There are ways around this, if Tenant A provides a witness statement giving authority to Tenant B to act on their behalf, this is exactly what happened in this case:

http://www.bailii.org/ew/cases/EWCA/Civ/2011/604.html

The reason for both parties needing to be claimants is usually because of risk of costs etc.

So you want to tie down Tenant A in a separate agreement first.

That will snooker Tenant B and if they are not talking then it should be easier.

One way to convince her is to say that by agreeing a settlement you indemnify her from your claims against the other tenant.

In the event that Tenant B tried to make a claim you would quote the above case law and ask for it to be dismissed, giving them a copy of the tenancy agreement with both parties.

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shell 16th August, 2017 @ 23:10

So if tenant A signs a full and final settlement tenant B cannot make a claim?

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vic 17th August, 2017 @ 11:08

Hi, Please advice on the claim from previous tenant. I've received pre-action letter. History: Tenancy started in Nov 2011 for 1 year, after that turned in to contractual periodic as per the close in AST agreement and continued as periodic until Sept 2016 at which point we signed new AST agreement for 6 month, as tenant was planning to move out. After March 2017 tenancy turned in to periodic again for further 3 month. Deposit was protected both times for the duration of AST terms, but I only issued prescribed information in 2016 when signing new 6 month AST. Tenancy ran with no issues for 6 years and here i get pre-action letter.
Pre-action letter from some deposit advice co states that they are putting forward 4 claims for each time PI was not given to tenant:
1st - in 2011 on initial 1 year AST
2nd - in 2012 when AST turned periodic
3rd - in 2016 on new 6 month AST (for this I have signed certificate and all information in place)
4th - in 2017 when AT turned periodic again.
So they are asking to settle with 4x times deposit as compensation and deposit itself.
Can they legally win 4 different claims.
Also, this property was not main residence for named tenant on AST, of which he asked me to provide him letter so council does not chase him for council tax. He rented the house for his partner and kids. I've read somewhere Deposit protection does not apply to AST for not main residence???? Not sure if this outlined in any Law, Act
Any advice, help is most appreciated.
Thanks
vic

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David 17th August, 2017 @ 12:08

@Shell

Yes, unless the Judge allows it but I doubt that would happen, the case law started out as being rejected until the tenant got the permission. So CPR rule is intact.

I would focus on Tenant A.

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David 17th August, 2017 @ 23:23

@Vic

Sorry Vic, the only exceptions are Lodgers and Holiday lets, you say you signed AST's. The only reference I have seen to "main residence" is on the GOV.UK website, I think they were referring to holiday lets because the legislation is clear about Assured Shorthold Tenancies.

For the sake of other Landlords; WHY OH WHY DO YOU BOTHER WITH NEW AST's?

Either extend the one you have so it is one agreement or allow it to go periodic as soon as it expires, the latter means you only ever have to give the S21 and 2 months notice.

Until October 2018 YES it will be possible to have multiple claims, the reason for this is that there were numerous changes of law and a plethora of case law and law applies as a snapshot in time for each agreement. So if you are unlucky enough it is indeed possible for some landlords, but perhaps not you.

One bit of good news is that the Deregulation Act 2015 put an end to the requirement to re-issue PI for Statutory Periodic, depending on the date(s) of the tenancies. Of course they left in the obligation to give an updated How To Rent Document before an S21 can be issued. That "end" applies to all tenancies in place in October 2018, not to historic ones that have ended but not yet claimed for, the law will try to apply the rules as they were at the time.

So that, at the very least, blows the 4th out of the water because the 2nd of your tenancies was in force in Oct 2015 when the deregulation act came into force. The 3rd gets the penalty but the 4th is considered the same as 3rd. If you had left the original tenancy in place with extensions until Oct 2015 then you would only be facing 1 sanction.

If it WAS only PI then it is very hard to prove a negative, how do you prove something did not happen, it is your word against his.

I have seen cases where a Judge has said "Well I find the deposit was protected from beginning to end and that is what is important". The tenant could have appealed but chose not to, that was more luck than anything.

When we come to the PI there is some overlap in some documents, years ago Landlords usually provided the information specified here:

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

However, we now have some of the deposit companies incorporating most of this information into their tenant paperwork, but this has evolved and not always done completely. I have seen cases where a Judge has said this suffices, but others where the tenant has won on basis that they were not given opportunity to sign under 2.(g)(vii)(bb). These were County Court decisions so not case law. Check your paperwork from the Deposit Company, some tend to mix it all in to a many paged mess also trying to incorporate the "How to Rent" info. Tenants think they have not been served the PI because it is not a separate Doc, but it is the information that is important.

The main thing they look for is

1. Was the deposit protected
2. Was the tenant aware of where it was and their rights of access/dispute

You say "Deposit was protected both times for the duration of AST terms" can you confirm that deposit was protected from the outset for the initial tenancy within 30 days?

I am assuming it was, otherwise would surprise me that they are only going after PI but if so, probably because claim company does not have access to records yet; so they have gone on what the tenant said, no PI. If they are searching online they may only see whether the deposit has been protected and recently. If they do proper casework they will establish the facts from the deposit holder for all tenancies, you will pay for them to do casework if you let it continue.

The issue here is that it is a claims company. They sign a tenant up on the basis that if they back out the tenant pay their fees. Also be aware that they yet may be adding their fees to the settlement offer. It is this aspect that is grossly unfair, all they have done is collected a page of details and they get to demand £1500 or else you pay £3k to £5k for them to do the casework and attend Court. Them asking 1x the deposit is actually quite reasonable, it is the minimum they will get for every proven breach, but they will not get it for the latter two on PI alone.

In any communication with them you need to write WITHOUT PREJUDICE at top of page 1 and at end of Doc for good measure. This means that they can't use what you write against you but bear in mind you are showing your cards, which may be enough for them to decide to continue.

The decision you have is whether to accept you screwed up and to settle ASAP to avoid costs or to roll the dice and risk legal fees. You will have read the comments in previous posts about mitigation, this could all be seen as one continuous tenancy, if it was your first and only property, you might get a 1x fee for each breach.

So as it stands your choices are

1. Allege you did indeed provide the PI, that their client has misinformed them and you will defend any action vehemently. You would of course be expected to provide a copy of what you provided. The opportunity to sign it is not huge, some argued it construed agreement and understanding, other side said they could still sign it. Besides, many tenants do not answer the door so it can be enough to post it through the door, if you can be specific on a date when it was provided that matches with other meeting then so much the better.

2. Send a Without Prejudice letter not admitting liability but being prepared to settle to save your own legal fees. Pointing out that that they are mistaken in making 4 claims, because deregulation Act 2015, but you will settle at 2 or 3. Their usual tactic is to tell you that you're liable for the max and then negotiate back from there, then add their fee. In this case if you establish that due to mitigation you feel you will only be sanctioned for 3x the deposit then asking to settle at 2x seems reasonable.

If you decide to settle I would go back to them with a Without Prejudice letter explaining that you have taken advice and realise that this is going to cost you more to defend than will cost to settle so without admitting liability you are prepared to settle at 2x for the reasons stated above.

A word of warning, do not try to issue the S21 until you have ALL your paperwork in order, that means the EPC, Gas Safety and How to Rent. However, do not issue these until you have resolved this matter.

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vic 18th August, 2017 @ 08:48

@David
David, thank you very much for detailed advice.
Just few points to clarify my previous post:
- This was our first tenant and only property.
- Tenancy periods:
a) 1 year fixed AST signed in Nov 2011, which became periodic in Nov 2012 and continued until Sep 2016. Deposit was protected but no PI issued
b) 6 month fixed AST signed in Sep 2016, which became periodic in Mar 2017 and continued until Jul 2017. Deposit was protected and PI issued. Tenant moved out in July, so no need for S21.
- In our case the only two reasons we issued new AST terms in 2016 were a) lots of changes to laws, acts related to renting between 2011 and 2016, so we were told parts of original AST is not valid or completely unenforceable; b) rent increase.

I'll go with settlement offer as per your guidance. Would you be able to direct me to settlement agreement?
Thanks a lot
vic

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InTrouble 18th August, 2017 @ 09:56

Hi Everyone,

I am a new(ish) Landlord of only 3 years & l am learning the hard way as l am presently being taken to the cleaners & more by my tenant. I got to hold my hands-up though as l took my eye off the ball & left everything to the managing agent to sort out - Big Mistake!!!

Anyway l can only blame myself...

Now that the shock & horror of knowing that l have already lost thousands and am likely to lose even more has subsided somewhat, l am able to give the morals of the tenant some thought. I am a person who sides both sides to the story, sometimes to my great disadvantage...

What if tenants who failed to pay the rent after 30 days were liable to be 'fined' up to 3x times the rent by the Court and if they failed to pay or breached the Tenancy Agreement they would receive a criminal record... I am sure that we would all be jumping for joy and rushing to increase our portfolios?

So why then can't the same go for Landlords? The rules are simple (ish) if you take the time to read them.

Just a thought...

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David 18th August, 2017 @ 11:06

@vic

Thanks for clarification.

If you are going via the claim company they will provide a settlement agreement, you could ask for their proposed agreement upfront so you can take it to your solicitor for advice.

To be honest it is better that these are drawn up on an individual basis because the circumstances change for each Landlord or Tenant.

The things that are important are:

1. That is says Settlement Agreement
2. That it states the names of the parties to the agreement
3. That it is signed and dated by all the parties (ideally witnessed).
4. That it specifies what is agreed (what each party will or will not do as part of the agreement).
5. That it is a full and final settlement of all matters related to S213 and the property.

You would be well to write you want to say then run it past your solicitor.

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David 18th August, 2017 @ 12:23

@InTrouble

Tenants ARE liable for breach of contract, they can be subject to £5k to £10k in legal fees for a typical S8 claim (if they do not pay it just before the hearing date), that is way more than 3x the rent and they get a CCJ for the trouble. They are also not running a business.

I have also seen Tenants who go to appeal face £8k in legal fees because a newly appointed Judge was intimidated by a Barrister, the tenant was already homeless despite no arrears (the Landlord just wanted to sell up a month after signing a new AST). The Landlord in that case had behaved in a reprehensible manner but I do not judge all by her behaviour, she was just a nasty piece of work.

You do not get a CCJ if you get a S213-5 sanction, never mind a criminal record. To me the only Landlords that should face a criminal record are those who do not do Gas Safety checks, carry out critical repairs or who allow over occupancy, but not if that over occupancy is by an identified tenant that sublets.

I do think that Tenants who sublet without permission of the Landlord should face a criminal record for fraud as they do in Social Housing, except for where students swap in and out.

It seems to me that you can blame the letting agents as they who were true villain in your case, even though as you say you failed and you were stupid not to take more responsibility.

My person opinion is that letting agents are a useless and redundant species who offer no value at all. More often than not they are professionally negligent and just an offshoot of estate agents. They have been screwing Landlords and Tenants with faked fees, double dipping and adding an uplift on repairs.

The simple fact is that like any business that is under regulated there is abuse, before deposit legislation Landlords were "lording" it over tenants, stealing their deposits, using them as a decorating fund and worse. Legislation was brought in and they found ways to abuse it, the number of revisions by case law in this area is huge because they played all kinds of tricks, even in Court.

I think the law is about right now, after Oct 2018 the Degulation Act will apply to all tenancies and many Landlords will be able to breath a sigh of relief on some counts.

The Government has produced a document called "How to Rent" it helps all parties understand expectations.

I like free markets, so I am not hugely keen on forcing all Landlords to register, albeit that in some areas they have to. Maybe if there was a simple one day course run by your local Council before you could be a landlord then it would save grief in the long term.

I do not think the rules are that easy, Landlords are expected to be immigration officers and being stung on tax, I feel they ought to be able to move their holdings into a UK registered company without paying stamp duty as long as they remain owner of company for 10 years thereafter.

Right now I think it is the claims companies that need regulating, not just on these S213 claims but on all issues. I find it morally wrong that a claimant is forced to enter into an agreement where they face fees if they drop the case. I find it wrong that Landlords can't settle without facing huge fake fees. I find it wrong that claims firms say they are not Solicitors when they absolutely are and anybody dealing with them is not given the same sort of caution that a Police Officer might give stating that whatever you say maybe used against you.

Every Landlord that faces a sanction learns a lesson and tells other people who may be Landlords.

I do think the authorised deposit companies are biased towards the people that usually instruct them; Landlords. I would like to see the Landlord give tenants the how to rent document before a tenancy is taken up and for the tenant to pay their money into the deposit scheme of their choice which then notifies the Landlord the deposit is protected.

Again it is Letting Agents who are the true villains here, so many use deposits as a cash flow fund, having either got an insurance backed system or not protected the deposit at all.

Any Landlord foolish enough to use a Letting Agent should make sure deposit goes into a custodial scheme and that the agent is a member of ARLA at the very least, that will not prevent them being incompetent or over charging or being useless at inspections etc etc etc.

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shell 19th August, 2017 @ 11:48

Hi David- sorry to jump on the thread again! Tenant A has been secured with a full and final settlement signed and in my possession. Tenant B has been sent a settlement via email and post with 48 hours to respond. I m just not sure what to do if they don't respond? I have used all means to contact them- a text to alert to the email, home address and rental address but we have not had any response from her since her rent arrears at the start of the month! Tenancy is up on the 30th- can i legally enter the property after this date of i have no response from the tenant (i don't think she is living there but some of her stuff was still there a few weeks ago last i heard from tenant A)
Should i put her half in a regulated scheme for the last week of tenancy and use their dispute system to get it back in light of her arrears? Can i even do this if tenant A has already had hers returned and it was a joint tenancy? i'm confused as to the best next step if a settlement isn't agreed?

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shell 19th August, 2017 @ 14:49

quick update! Tenant B is agreeing to settle! I wish i had your address to send you a bottle of whisky as your advice has been invaluable!! Thank you.

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David 19th August, 2017 @ 15:12

@Shell

I would arrange an inventory and exit inspection with Tenant A, you will then have achieved peaceable entry.

If Tenant B has left stuff it can be deemed as they plan to return. You have obligation to notify and store it (at their cost in due course) make an inventory of stuff and take photos. Record the condition of each item.

When you see Tenant A thank them for their co-operation, offer them a positive reference if you have not done one already. Casually mention that if the other person asks them to authorise them to claim that they would not only be in breach of your agreement but they would open themselves up to potential of legal costs you have depending on outcome. Say something like I am sure that is not going to happen but I just wanted you to be aware that she may try to ask you to do so.

I think as you have not heard from her you need to contact her guarantor, ignore the S213 stuff and just go after the arrears. For the first letter I would keep it friendly-ish, say you have written, email and texted the tenant who has failed to respond. As Rent has not been paid you will be enforcing their agreement to guarantee payments on the tenancy.

If they come back to you and mention the S213, I would say that any S213 issues are between Claimant and you unless they wish to formally advise you that they have been retained as Tenant B's client and if so to please provide the name of their Solicitors firm. Tell them if payment is not received within 7 days that settle the arrears and other maintenance fees (ignoring anything you offered in settlement agreement for Tenant B) you will be instructing your Solicitors to issue a letter before action.

As far as S213 is concerned refuse to discuss it with them (unless they formally advise you that they have been instructed as Solicitor of Tenant B), it is not an acceptable reason to withhold rent and they are not the claimant but the guarantor.

Only at this final stage do you drop the bombshell that you have secured a settlement agreement with tenant A which includes not making a claim and as any S213 claim on a joint tenancy requires both to make the claim, their suggestion is rejected. Do this in a without prejudice letter.

To be clear, you are going after Guarantor because tenant has not paid rent or , I have not seen your agreement but usually you can just issue a demand in accordance with the guarantor agreement, 10 days is common but check your agreement. It should say that you are entitled to recover all losses, damages, costs and expenses of the landlord arising from any breach of the tenants' obligations under the tenancy agreement.

Now if they say "You offered less in the settlement agreement" or make any reference to the amount, then it proves the tenant received the previous notifications. To be honest, with the agreement for Tenant A you have no reason to give Tenant B a settlement, they have a guarantor, just go after them. If they do not pay you issue the letter before action which will give them 14 days to pay or you will commence legal proceedings against the Guarantor (not the tenant) under the Guarantor Agreement. If they try to counter claim you can ask Judge to dismiss the counter claim as they are not the tenant and thus not a valid claimant and in any event such a claim would need to include Tenant A. Your claim is under £10k so can be done on the small claims track. It has "fixed costs" so you cannot go for legal fees under usual circumstances. This is your pre-action conduct:

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

As I said, do not engage on S213 as they are not entitled to be claimant and unless they are formerly instructed by tenant B the issue is confidential.

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David 19th August, 2017 @ 15:15

@Shell

Good to hear, settlements are cheaper for all.

Our messages crossed.

Hopefully the above will help anyone else in a similar position.

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vic 22nd August, 2017 @ 11:29

@David
Thank you for all advice so far.
I'm finalizing offer letter of settlement to this no win no fee co acting on behalf of tenant. What should I do with tenant's non performance related to AST agreement (damages to property) and 1 month arrears? Should this be left to be recovered through court claim or requested to no win no fee co to deduct from settlement figure?
Thanks

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David 22nd August, 2017 @ 17:05

@Vic

Ideally both parties want the whole thing wrapped up in one agreement but that is going to depend on your claim amount and what they are settling for.

If you have asked them to provide a proposed letter of settlement you would have an idea of what they have in mind (including costs).

If they agree to a settlement of S213-5 issues and leave out any damages then that leaves you open to claim on the deposit in any scheme and to claim for damages that you can prove.

BE AWARE if both parties accept the deposit holder as arbiter it will affect your ability to make a legal claim.

If you approach the claim company you can add it but there are a few factors worth considering, they may be working on a conditional fee arrangement for 35% of sanction or settlement, if the matter becomes long and protracted they get to rack up fees.

I would get them to agree to settle the S213-5 issues first, so that amount is fixed and done. My instinct would be to eliminate the risk of higher sanctions by putting the case to bed.

Once you have settlement, you can decide whether to send a letter before action for the damages. At that point they will not be on a no win no fee basis. In small claims you will not get your legal costs back but you will get court fee and other fixed expenses if you win.

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vic 22nd August, 2017 @ 20:16

@David
Hi David, would you please to explain more on "BE AWARE if both parties accept the deposit holder as arbiter it will affect your ability to make a legal claim", as I could not find any information about this online.
Also, is there anything I need to add to settlement agreement or look out to be removed?
Thank you
vic

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David 22nd August, 2017 @ 22:19

@Vic

I could not possibly comment on an agreement I have not seen, I did explain above the minimum it needs to have.

Really any contract is about showing intent. I did explain in 197 above that you can ask the claim company for what they propose as a settlement agreement, then add or subtract from that as you see fit.

There are contracts available online but upon reflection on the situation discussed in this blog post I felt that they are overkill and such a long winded agreement would scare people off. So I come back to what I said in 197.

With regard to the arbitration, this is the FAQ for the ADR of one scheme

https://www.depositprotection.com/help/browse/insured/tenant/alternative-dispute-resolution

As explained here, once both parties agree to ADR it is legally binding, so you can't take legal action if you do not like the outcome.

I was shown the way it pops up in the process at the DPS when a Tenant or Landlord raise a dispute and did not think it made it clear enough that it was binding.

https://www.citizensadvice.org.uk/consumer/alternative-dispute-resolution/settling-out-of-court/using-alternative-dispute-resolution-adr/

https://www.citizensadvice.org.uk/consumer/alternative-dispute-resolution/settling-out-of-court/using-alternative-dispute-resolution-adr/

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Flash 23rd August, 2017 @ 20:14

@David

David - your help again here. The solicitors of my ex-tenant have sent me a letter asking a 3x times the deposit penalty, plus the initial deposit of £500. At the moment i would like to avoid any risk of going to court as the cost and fees can go up to 8k in total, which i cannot afford. Question is, will the solicitors negotiate anything less than 3x the deposit ? How do i go about without risking court action and further legal costs?

Also the solicitors of the ex-tenant want the deposit back in cash from me. The deposit is currently held on hold by the DPS. How can i take the deposit out of the negotiation table so i can claim potential damages ?

Many thanks in advance

Flash

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Rowena 2nd September, 2017 @ 06:45

Has there been any precedence at all where a landlord has managed to establish with the Judge that they acted in good faith and were a good landlord - and the deposit not been put into a scheme was an oversight rather than on purpose ?

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Rowena 2nd September, 2017 @ 06:47

Just to complete the last comment - been able to get away by just returning the deposit and not paying the 1 to 3 times the compensation ?

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David 2nd September, 2017 @ 08:14

@Rowena

It would not matter whether they acted in good faith, the law is quite clear, otherwise every Landlord would say "sorry it was an oversight"!

It used to say that the just MUST award 3x the deposit if the deposit was not protected within 14 days, these were subsequently amended to between 1x and 3x the deposit within 30 days.

The word MUST ties the Judges hand, if the deposit was not protected for whatever reason they MUST apply a sanction of 1x the deposit.

There is case law that I have quoted above that confirms a Judge has the discretion to vary between 1x and 3x, that is the best you will get.

If you had an agent do it then you can go after the Agent for what their negligence cost you, but if the sanction or settlement has not been agreed yet you should bring them into the situation by warning them you hold them responsible.

Start off by being nice to them, tell them you have this dispute and ask them for evidence they protected the deposit and any related emails, then once they provide it to you, you inform them that you find them responsible. Tell them that if they settle the matter by paying the tenant 3x the deposit now it will save them the legal fees you will incur defending the matter and in taking them to Court.

On the cases I have seen with agents involved the worst it took was a Solicitors letter (which they ended up paying for). Obviously, it does depend on the type of contract you had with the agent, whether it was stated or implied that they would do everything for you. In the industry they tend to call this "full service". You would be wise to save pages of their website that imply they will do it. For example a page that says "we take care of all of your Landlord responsibilities".

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Alex 17th October, 2017 @ 23:54

@David
Thanks for sharing the advice on Vic's case.

I received a claim letter from a claim company acting for an ex-tenant seeking x3 compensation and 3 claim for each tenancy agreements. Can they claim it for each year's tenancy? I signed a Lodger Agreement when the tenant first moved in when I was living there at the time, which is why I did not register the deposit protection. I subsequently moved out after a short period of time (a month or so), but all renewal of agreements were left unchanged as Lodger Agreement.
year 1: Jun 2014 - Jun 2015 rolled on for an extra month
Year 2 July 2015 - July 2016
Year 3 July 2016 - July 2017

Can they claim it 3 times for each tenancy agreement period? Or should that only be one claim that the deposit was paid once only in 2014?
Because I did not sign a AST agreement, will it be difficult for them to have to proof the Lodger Agreement is not valid first before they can have a case? If that's the case is it best to not to admit that I am at fault of not protecting the deposit? Or does it simply default to AST due to I didn't live there subsequently?

The claim company is asking for 9x in total of the original deposit amount. If I propose to settle, what's the maximum amount in your view that I should put a stop and make the court proceed worthwhile given the additional court fees/legal costs?

This is completely stressing me out at the moment, lots of sleepless night. Any help you could give would be greatly appreciated.

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David 18th October, 2017 @ 01:44

@Alex

The law in this area is based on a number of acts and orders as well as a plethora of case law decisions in the high and appeal courts. Under normal circumstances where an AST originally existed and was replaced with new ones including statutory periodic tenancies there can indeed be a liability for each tenancy, but it is largely dependent on the date of each tenancy. This was made better for landlords by the deregulation act 2015, for tenancies that started after it came out and for all tenancies once we are past Oct 2018. However, your case is different because no AST was created by you in the first place.

Of course the claims company wants to claim for the largest amount possible, they also want to intimidate you and make you give them evidence by engaging them.

As your case is live I would not put too much personal information on a public site, including your name or actual dates.

Their first hurdle is to prove that you were not resident, they will have the affidavit Statement of Truth from the lodger, they may have similar from other lodgers or other witnesses.

They will look to substantiate this with records of you living elsewhere on the voters roll, company records, land registry and so on. You can't assume they know what you know but at the same time they may be things they know that you could not anticipate. They may also rely on Council determinations if there were any interactions and findings with them.

Any communication you have with them must have Without Prejudice at top of each page so it can't be used against you in Court, do not engage them on the phone, only in writing.

A tenancy agreement is created in law by statute where one does not exist, it does not automatically follow that the lodger agreements should each be replaced by an AST. Of course they will want it that way but a Judge will first have to decide whether to find that a tenancy is to be created in law.

When these are done by statute, for example when a tenancy expires and the tenant remains they just roll over month to month until the tenant leaves or the landlord evicts.

So it would be reasonable for your Solicitor to argue that IF the Court was to decide the lodgers agreements were void that the tenancy period was a statutory one that ran from Jun 2014 - Jun 2015 to July 2017. This would limit your potential liability to between 1x and 3x the deposit.

You would then be able to argue that as you thought the lodging agreements were valid and as a novice landlord you did not think you needed to protect the deposit. Factors here will be if you had professional advice that explicitly told you the deposit did not need to be protected. By the same count, if you are a professional landlord, if you had enough lodgers/households resident or property size (3 story or more) that made the property an HMO or if your property was in an area that requires you to be a licensed Landlord.

I see no reason to cave or reason to give them evidence, you have to consider what they can prove. Bear in mind they will be going for legal fees. Also bear in mind that if you offer a reasonable settlement and they waste the Courts time by not accepting they may not get their costs. Your starting point in negotiations will be 1x deposit but before you get to that you need to find out as much as you can up front.

In the first place you could write back a Without Prejudice email saying you are shocked to have received their claim and say that you will need some time to take legal advice, meanwhile you would be grateful on what legal basis they are making their claim.

Do NOT be fooled by their assertion that they are a claims company and not Solicitors, they ARE effectively Solicitors using the law and the threat of legal fees to extort money. They will use anything you say against you. So say as little as possible and only in writing, act dumb and see what we can get them to spill. If they call you block their call or even tell them that you have been advised to only discuss the matter in writing and for them to please never call you again.

Getting stuff in writing will get them to show their cards to some extent, I know the basis on which they are making the claim and how the law can be twisted to suit their goals and yours, but they may not be aware of all case law or they may be relying on decisions that have been superseded by other law or case law.

It may be wise for you to communicate any details of your case by private message via the forum of this site, join it using the Landlord Forum at the top of the page then follow the link below to find my profile

http://bit.ly/davidpip

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Alex 18th October, 2017 @ 21:15

@David
Thanks for your response. I have private messaged you.

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Alex 20th October, 2017 @ 12:43

@David,
I am a newbie to the site, so not sure if you have received my private message. Please let me know. Thanks a lot!

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