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

194 Comments- Join The Conversation...

Showing 144 - 194 comments (out of 194)
Guest Avatar
Mary 15th July, 2017 @ 15:55

Hi David. A few days of discussion and gloomy thinking here. Talked to family and we are really not sure what to do, however much we are in the right. I just don't feel we can trust the ambulance chasers and the warmongering ex lodger, and feel pretty sure that they will play as dirty as is needed to get to the end of the process, however ludicrous. (I didn't realize about the lodger/client being locked into a restrictive contract with the ambulance chaser. I worry that this could make both of them chase a crazy case because they are locked in a lose-lose situation.) Our solicitor said at first that maybe our second response should be a low offer settlement like 1x depos, but you say we really shouldn't engage any more and let 'them' file a case. There is of course a lot of brinksmanship there and in some ways all is still to play for as their case is weak, but I also understand that a settlement now might not be 1x dep as the chasers will try to make money through fees etc. Yet in some other cases on this site it is implied that 1x dep is possible. Is that really only when the ambulance chaser has not yet got involved? What I mean is, are we doomed to pay several k if we settle now and several k plus more if 'they' 'win'? Owing to a serious new health issue in the family I don't feel I have time or energy for a court case, maybe even if I am guaranteed to win! This is v distressing for all of us as we were very kind and welcoming to the lodger, bought furniture etc that she wanted in addition to what was in the room, took her on family outings, gave her a very fair rent, wrote a nice reference when she started to think about moving, and much more, but it all fell apart when she left at very short notice without paying the last bit of rent and I took that out of the deposit (but not all as I felt I should be generous spirited. Mistake to try to be a decent human being! Lodger wanted the lot! Now she wants to 'win' and get severe revenge too!) Still confused about how to get this out of my hair asap in difficult family circumstances.....and of course without funding the claim co and venomous lodger any more than is necessary.....

144
Guest Avatar
David 15th July, 2017 @ 19:56

@Mary

Of course you can't trust them, her because he has told her it is a free payday and probably got her to sign to pay the costs if she pulls out.

Him because he is in the business of extracting as much as possible. We have seen here how he doubles fees to add to the pressure.

He will not let you settle with her at 1x or even £300 which one Landlord has reported he got tenant to agree to.

So if you settle you are dealing with someone who uses template paperwork but will say he has done loads of legal prep. I think their case is weak and actually expensive to bring to Court and they have very little evidence.

You can be resident there and staying with a partner, I am sure you paid Council tax at the property, you had bills at the property and it is for him to PROVE otherwise.

People let lodgers in their home and work abroad coming back whenever they can. People stay with boyfriends.

I do not think you should engage with him, it is too late for lodger and he has to prove his case. He can allege this that and the other but you have a signed license not an AST so there is no deposit due. END OF, that is your position, you have made it clear. It would be good for you to be in the property now of course, do not discuss that further here.

I really do not think you will gain anything by trying to settle, they are trying it on and that is that. You just have to roll with it. Just remember it is P O K E R, no tells, no comments, NOTHING.

Look at Maria in this video, especially from 1m 10s how rather than just sitting there, she gestures him to fold, then she acts out of character, she talked to much and she did not get paid, if you talk too much you will pay!

https://www.youtube.com/watch?v=h-PNCZgWjbw

145
Guest Avatar
Brigitte 15th July, 2017 @ 23:01

David your comments are invaluable and I feel very grateful to have found you and to be able to have steady calm advice at a generally very unpleasant time. There is no problem about location whatsoever, and the lodger is not only long gone but has no access to the property (unless she has cheated her way in via the intercom to the communal areas, but I would have seen or heard that as I am working at home a lot of the time at the moment. Having said that the other owners of flats are a strange bunch, at war with each other, and she might just have got to one of them and persuaded them to make up stories, anything' posdible I suppose). The thing that is worrying all of us is that I have never had to appear in court and have a serious speech impediment which may make me come across badly. Also I have to cope with family illness on top of my work. I want to avoid appearing in court if at all possible. I know it is a poker and brinksmanship game now but dread the outcome if it is appearing in court, especially opposite an apparently half lying, random, venomous, venal, disorganized opposition...you name it seems they are it! Would they instruct a barrister and would I have to do the same? Or is it more county court level? Would I have to spend months preparing piles of my evidence or would I just have to counter theirs in situ, presumably after seeing it by order of the court first? How often does the ambulance driver actually get to court and win, or does he mostly intimidate people with no time into settling beforehand in order to avoid court however innocent?

146
Guest Avatar
David 16th July, 2017 @ 09:03

@Brigitte

Do not worry about a speech impediment, just make sure that the Judge is informed but I doubt it will get that far unless they have some actual evidence.

It is her word against you and your family, she signed a licence and that it the legal basis of your contract. Nothing in law says you have to be in the house every day and it is for them to PROVE their case. It is of course preposterous and would be a joke if it was not for the fact that this is a Court matter.

I would expect you to point out that this is a case with no standing in law brought by a money grabbing tenant and ambulance chasing website created for this purpose.

I have no way of knowing their success rate but I imagine they would only want to actually go to Court if they had solid evidence. What I do know is that they play a good game of intimidation.

I would not want to go to Court on such flimsy evidence, which is why I urged you to not give them anything that they could twist to suit their purpose.

With these things you have to take a deep breath, hold your nerve and let the cards fall.

It is indeed just County Court, usually just a room with a District Judge and three or four tables laid out in T shape. The approach will depend case to case on whether they use a Solicitor or a Barrister. To be honest it is often more about availability and short notice than anything else. It is common for Solicitor to do the prep work and a Barrister to present the case as it intimidates/impresses some District Judges, however, I suspect he is on a contingency agreement, he does all the case work, brings the case to them and they represent the client. He can do that with a Solicitor but adding a Barrister means he will not get such a generous cut. Also Barristers usually want paying no matter what, so they either get paid to consider a case and then also to fight it. While he may have an agreement with a Solicitor where they do not get paid if they lose. As he does all the case work and it is business they would not have without him, their only loss is their employees cost for the Court appearance and they have that cost anyway.

If other examples of their approach are anything to go by they will try to use the a track that allows them to ask for legal costs rather than the usual (and purposely designed) approach for Landlord Tenant disputes that are effectively small claim.

Part8 is designed for undisputed claims so the first step will be to request it is kicked out without a case to answer and if the Court decides it deserves a hearing then to point out that it is not suitable for Part8 because there will be a dispute requiring more than 3 hours and potentially several days to present evidence. You also point out that he is using Part8 only as an attempt to get costs which is his sole objective.

As always it is always down to luck, I would be inclined to request a venue transfer to your local Court near the property so that it is not the same old faces in Court back office and Judge.

147
Guest Avatar
Winston 16th July, 2017 @ 10:56

These are very interesting points indeed. It sounds as if the powers that be should take a close look at this area as it feels as if the Landlord Tenant dispute area is being exploited quite ruthlessly by claims companies: how many are there of them? I was wondering if in my case we could preempt the court case heading down the wrong 'track' or is that impossible? I think there is quite a lot of email and text evidence in my case that could give the 'wrong' impression if taken out of context. Is there a need to prove residence apart from bills etc?

148
Guest Avatar
David 16th July, 2017 @ 11:43

@Winston

There are numerous claims companies but let's not give them oxygen here, there are also firms that specialise more generally in such law.

Usually a dispute arises when a S21 is issued and the tenant is advised by a Council to check deposit was protected, if not they tend to respond to the claim and get it struck out and they often put a counter claim in response.

Others might issue counter claim to a Section 8 of Housing Act to get their Sanctions.

The remaining should be making a small claims application which has only very limited fixed costs awarded (travel, work, expert witness) but certainly not huge legal fees.

There will always be Solicitors using the Law to their own advantage, if you have not had a call from a PPI or Accident Claim company you must be one of the few. A broken finger nail becomes tissue damage.

The thing about S213,4,5 etc is that you either protected it or you didn't, what we have here is a twisting of facts by claim companies to encourage tenants to make a claim when they do not even have a deposit or an AST. Then abusing CPR to maximise costs by using Part8 when it is obvious there is a dispute so innappropriate and then increasing costs for what are template cases.

A bit like the letting agents that have a tenant or landlord fill out their details on a computer and generate a tenancy agreement then charge both sides a fee for carrying out the work when in fact they did it.

I have already passed on comments to SRA regarding this as I think they are the best placed to handle it.

149
Guest Avatar
David 16th July, 2017 @ 12:39

Having said that, I think it might be a good thing for site owner and Landlords to lobby the government to extend regulation to ANY legal claims management firm.

At the moment it only applies for

personal injury
mis-sold financial products and services
employment and redundancy
criminal injury
industrial injury
housing disrepair

https://www.gov.uk/government/groups/claims-management-regulator

150
Guest Avatar
Winston 16th July, 2017 @ 12:50

I completely agree with you. It is a racket. There needs to be real protection on all sides. I was scammed by a local lady once for whiplash when my car never even went near hers: she just skidded in front of me on a roundabout and I think her boyfriend was at the corner of the roundabout to try to get 'evidence' such as reg number as she drove off down a side street. She got a dodgy doc at a reputable private hospital to say she had severe whiplash many many months later, obviously after the ambulance chaser got hold of her. My insurers' lawyers got in a muddle and admitted liability by mistake although there were glaring lies and errors in the case. Once I am further along my path and the case is waived or sorted I will most definitely start lobbying. I am exactly the same as others above as far as my case goes. I was wondering if in my case we could preempt the court case heading down the wrong 'track' or is that impossible? I think there is quite a lot of email and text evidence in my case that could give the 'wrong' impression if taken out of context. Is there a need to prove residence apart from bills etc? Will I have to give evidence myself in court and face cross questioning? I cannot speak well.

151
Guest Avatar
David 16th July, 2017 @ 14:42

@Winston

The first serious thing that needs to happen is a letter before legal action, not to be confused with a letter before action or preliminary letter before legal action or any other attempt to confuse. The need to be in accordance with Civil Procedure Rules and invariably are not. They do not care because they do not intend to rely on them, their goal is just to get you to engage.

I suspect that there would be several attempts at settlement, again, just to get you to engage with them, the ones I have seen completely fail Part 36 Civil Procedure Rules but again, they do not intend to rely on them.

Consider this to be like building a house, there are stages and a project manager is not interested in the Windows when the foundation is being laid.

At the same time they do not have the materials to build the house so they are trying to engage with you to get you to give away something that they can use.

Right now they have an option on the land, they do not even have planning permission and are questioning locals to see if they can find some reason it might be granted.

The way to stop it is as I stated above.

1. Request the Court throw it out as there is no case to answer, you would send that immediately with the licence stating that it was a lodger.

2. Then you would request a change of venue stating health reasons, expenses etc. It should be near to where the property is and not near to where the Solicitor is.

3. You ask the Court to dismiss it as being filed inappropriately as Part8 is not appropriate.

If 3 failed and you are forced to have a hearing where files you request 1 & 2 them again.

The key is to act quickly, almost immediately and to "ride" the Court staff in the nicest way.

Courts are not bad places and a Judge will always have sympathy for a layman, certain statements can be made but we can cross that bridge when we come to it. Right now they have not even got a case, I know it can be scary when they threaten you with this stuff but it all has to be based on common or case law.

Making accusations is easy, quoting sanctions that apply under different circumstances is easy but they have to prove it. I think they would be on a hiding to nothing.

You must be like them, only focus on the current stage and clam up until you are legally compelled to respond.

152
Guest Avatar
Wyra 16th July, 2017 @ 18:27

Maybe I am too innocent but I really don't understand how the chasers can get away with so much carelessness and so many mistakes all the time whereas if the innocents being attacked put one foot wrong it seems there will be too many hostages to fortune and worse still all hell could break loose! Your understanding and attention to detail is brilliant David and you will get your reward in heaven one day if not before!

153
Guest Avatar
Barry 18th July, 2017 @ 10:11

@ David,
So court is looming and its quite exciting and also quite un-nerving. I have employed an advocate to go along for me, I will go as well.

I was thinking do I add another offer now in the meantime? We have both agreed on the actual settlement the tenant would get if they won, around 2 x deposit in total. Thats not really in dispute, so I was thinking do I offer that amount plus half of the costs I was quoted for a solicitor to defend the claim (about £500) and remind the tenant any counterclaim I make will be for over £5,000 plus costs so even if I only won half that amount the tenant will be out of pocket almost £1,500.

If we settled now then I wont come after them and they are in pocket without the risk of losing out from the counterclaim. The tenant is only going to get max of £950 so this is that without risk to them...

Of course I suspect the solicitor would advise not to accept (as this is way below their costs), even though its likely thats the most the tenant will win anyway.

Also there is a dispute with the DPS, they have said they will wait for the court order (fair enough) but if the court finds in the tenants favour then the DPS may release the deposit but at that point I have not made a claim for damages to the property. This to me shows these cases are very much inter linked and I should be able to counterclaim and a part 8 claim should not be used?

Either way I am reluctant to make an offer and am only really doing so to get this off my back due to the added expense in defending it going forward. I am in two minds whether to offer but it will drag on and on....

154
Guest Avatar
David 18th July, 2017 @ 11:35

@Barry

I think you need to be focused on the objective which is to get this kick out of Part8, if you are all prepared in a 15m hearing and the Judge thinks he has heard enough he will decide the matter, YOU DO NOT WANT TO DO THAT.

All you want him to consider is whether this matter is suitable for Part8 because facts are disputed; you need to be stating over and over that for the sake of Justice you need a proper 3 hour hearing so you can present and challenge evidence.

Say that you feel that there has been an abuse of procedure purely to generate fake exorbitant legal fees by an Ambulance Chasing claim firm.

It is good that you go with an advocate, but do not argue the case, say you need time to prepare the case, that you have had family bereavement, were served late, live abroad and so on.

NO NO NO NO

No offers, they show weakness, any settlement is going to include these fake fees so forget about settlement. You are dealing with someone who is trying to extract the maximum bet, they get 30% of the money they get the tenant (probably plus VAT) but their real money is in fake fees.

The claims company do not care about the Tenant, they do not care if you cut her potential losses, they care about their fee. If you were dealing directly with a tenant and you were guilty you might come an agreement but we are so way past that.

You might think you can come up with a number but even the mention of it makes them stronger, you need to be tough, hold your nerve and state your case. You have a signed tenancy agreement stating no deposit was taken, that rescinds and replaces the original agreement.

Settlement offers also make some Judges feel you think you are guilty even if you are just trying to cut your losses.

Personally I do not understand why you would settle based on what you told us here.

You can also say to the Court that you need more time to hear the issue of Counter Claim for damages and for them to not order the release of deposit, again you need time to present your evidence.

Part 8 is supposed to be about disputes where a claimant is seeking the Court’s decision on a question which is unlikely to involve a substantial dispute of fact.

Part 8 is also being used to "strangle" you, yes it requires the Claimant to serve with the claim form any witness evidence they wish to rely upon, HOWEVER, it also restricts the Defendants, because if you fail to file witness statements on time you will not be permitted to make representations at any hearing unless the Court provides permission.

THAT is what you are seeking, a proper (part 7) hearing and permission to present witness statements and counter claim. The simple fact is this is not a case about a simple decision.

There are also rules that affect Part8 about cost management, claims companies are great at making their case prep look substantial and cost budgets look good, but it is a template case! Just fill in the blanks, for this reason it needs to be disputed.

You may also be able to seek a sanction against their costs because of late service when they knew you were abroad.

They only do this same law over and over again, the case prep is done by the claim firm and the Solicitor on the day will just present what is put in front of them, they may have done this before for the same claim company.

That in itself is a good reason to ask for a change of venue, to make it closer to say the main airport or halfway between that airport and where the tenant lives.

You do not seem to get that they want you to make an offer, they want you to cave in bit by bit, day one you accept an amount of settlement, then days later once you have accepted that they ask for legal fees, then they give you time to get used to that and probably come back at half to three quarters of their hyped up amount.

I think you and others on this thread have a complaint to present to the SRA and the regulator about the conduct of this firm.

155
Guest Avatar
mr.spacemaker 23rd July, 2017 @ 23:16

@David

After my very painful and expensive eviction and a total refurbishment (only one floor in one room was salvageable!!) I have finally found a new tenant and can eventually start paying off the debt that I've accumulated.

I have a slight problem in that the tenant wants to move in immediately and I can't get the Landlord's Gas Safety Certificate in time. Am I right in thinking that it MUST be in place BEFORE the tenant moves in?

Long story short, I need the new gas cooker connected before I can get the certificate done, and the gas engineers that we usually use are all too busy this week....

Apologies for asking you before I do more research, but I'm keen to have your opinion as well as knowing the actual law! Also, there was a lot of grey area in my research before - even the solicitors were unable to clarify the legal position of the property not having a valid Landlords Gas Safety Certificate due to the actions of the tenant....

156
Guest Avatar
David 24th July, 2017 @ 08:39

@mr.spacemaker

Your legal duty is to keep the boiler safe, the certificate is your way of proving you are doing so annually, one of the ways this is enforced is by making it also a condition of enforcing an S21 (deregulation act 2015).

You could be reported and have your boiler condemned on day one, leaving you open to fines and legal action.

You can find people who will do these checks within a day or two so there no excuse not to get it done and after your experience with previous tenant I would imagine you would want to.

The check needs to be carried out by "Gas Safe Registered technician"

https://www.gassaferegister.co.uk/find-an-engineer/

You need to keep records of your check (best to keep 6 years of all records relating to your property and if you keep more it would show a Judge in any potential dispute that you take your obligations seriously).

It is standard practice issue a copy to any new tenants BEFORE they move in. The general order of things is as follows

1. Tenant applies to view property and to authorise tenant referencing. Landlord sends copy of terms of tenancy to tenant for review.

2. Assuming basic referencing passed Tenant has viewing, brings ID and copies of documents required for ID checks that Landlord is obliged to carry out.

2. Tenant has 2nd viewing a leaves a HOLDING deposit of same amount and Tenancy Deposit, Landlord gives that to Deposit Holding Company and gets paperwork from them.

3. A week later Landlord meets tenant at property a week later with 2 copies of prepared tenancy in their name, at the back of the tenancy are Gas Safety Certificate, Energy Performance certificate, copy of completed Government "How to rent" document, copy of Deposit Protection certificate issued by DPS, TDS or MyDeposits. I would also add inventory and a reference to a hidden video on YouTube showing condition of property. So if there is any dispute at a later date the video is there, dated to within a few days of sign up. An inventory should list any damage and the video should show such damage.

More details of your gas obligations are here:

http://www.propertyinvestmentproject.co.uk/blog/landlord-obligations/#gas

The Law is set out here along with modifications

http://www.legislation.gov.uk/uksi/1998/2451/regulation/36/made

In summary, do not risk it, never allow yourself to be rushed into anything, if is often a tactic of scammers.

157
Guest Avatar
Ian 25th July, 2017 @ 18:04

OK, so I've messed up.
I thought I was doing the right thing by serving a section 21 eviction notice as I want my tennant out at the end of the existing 6 month term (August 31st), notice was served in mid June. Because she is housing benefit they said she needed a section 21 so that she could be re-housed. She then used an agency who, she says, charged her £400 for reference checks etc. on a house she was looking at.
However, being a thick house owner letting his house out and not a millionaire multi property owning mogul, I didn't know I had to use a 'protected deposit scheme'.
She now wants me to supply a copy of a 'deposit scheme certificate' (?).
If I put her deposit into a protected scheme now (one of the suggestions in the blog) will I still be prosecuted for not following the rules and have to pay 3xdeposit of £750.
Also, would she need to provide a receipt from me saying I took a deposit to prove I actually did? (I'm not an arsehole and trying to get out of my mess up but I'm not sure I did that).
Any help gratefully received.

158
Guest Avatar
Ian 25th July, 2017 @ 18:59

Here's a silly idea.......so that landlords don't make 'mistakes' and 'forget' (wry smile) to register tennants deposits, why cant tennants just pay the deposit into the scheme - the landord gets a confirmation that it has been paid and then they can let the tennants move in.
The tennants will know their deposit is protected, the landlord will be happy because he has his deposit and can't be 'tempted' to use the money on house maintenance. It would be a simpler process too instead of all of these certificates and then the additional prescribed information that needs to be sent. The current system is just a mine field of genuine, legitimate mistakes waiting to happen!

159
Guest Avatar
David 25th July, 2017 @ 22:12

Hi Ian

The whole purpose of this page is to explain to Landlords and Tenants alike that you are better off agreeing a settlement as soon as possible.

As a new Landlord there is some mitigation that can be referenced but one way or the other you are going to pay something.

You have something the tenant wants, a reference, their deposit back in full, no risk of being sued for damage to property.

The tenant has something you want, a tidy exit, property left is decent nick, not to waste their time going to Court for the S213 sanction of between 1x and 3x the deposit, but to reach a reasonable settlement.

Have a look at the letters above.

Do not tell me exactly what month but approximately when did you let the property?

The way you respond depends on when tenancy was taken out, this is because there are several amendments to the law and then higher court decision that created case law.

For some you just give it back but others you still have to protect it.

Now whilst I agree that it would be easier for tenant to place the deposit, there are a plethora of obligations just to sign them, never mind the ongoing maintenance, gas safety, fire alarms and so on.

Obviously they can't do them for you either, there are a lot of Landlord articles on this site that will tell you your obligations.

It is like any business, you need to document your processes and create systems to manage your stuff.

Sorry to be the bearer of bad news, go back to the top and try out the things there. Be nice to the tenant, come clean and say you are a novice landlord and so will be able to ask the Judge for mitigation but you would rather settle.

Let us know how it turns out.

160
Guest Avatar
Ian 27th July, 2017 @ 20:56

Hi David,
The good news is that she hasn't yet threatened any action she has just asked for a copy of the certificate.
The original tenancy started in March 2014 for 6 months and then the agreement has been re-newed every 6 months since. She gave me a deposit back in 2014 but I didn't protect it.
Having looked at the the 3 schemes (from what I can work out) the agreement should have changed from a STA to a continuing agreement so have I done that wrong as well? Jeez, starting to think this is more trouble than it's worth!
So, because she started another agreement every 6 months should I have re-started the protection because you have to put in the end date for each STA? Therefore, can I say that i received the deposit in 2014 but this STA started in March this year? It's so confusing and I don't want to do it all wrong now and end up being prosecuted for falsifying information or fraud or something worse......
BTW......thank you. This blog has proven to be really helpful and your personal touch and the fact that you replied to my post really quickly has helped so much. Thank you.

161
Guest Avatar
David 27th July, 2017 @ 21:35

@Ian

Just to clarify, I am a visitor to the site just like you, The Landlord is the site owner and operator. I just try to help people Landlord and tenant alike.

I have a bit of bad news for you, or rather need to clarify something. When you say renewed, do you mean she signed new tenancy agreements or the original agreement was extended?

I am hoping it was extended or else you may be liable for multiple instances of sanctions. If you had moved to a statutory periodic you could have still faced two infractions and had to re-issue the prescribed information with the Statutory Periodic. That madness was put to bed in October 2015 with the Deregulation Act but you still have to give them the current How to Rent booklet if you go SPT or else your S21 can be thrown out.

The way it works is that for each contract you had an obligation, (not if extended), now usually a Judge will consider a property that is substantially the same as one breach, EXCEPT if the tenancy goes over the key boundaries of Deposit Legislation, these are roughly Pre 2007, 2007-2011, 2011 to 2015 and 2015 on. There are specific months, not just of the tenancy start date but of amnesties of which there have been two.

Then to complicate things there are a number of higher court decisions that can mean if you have a tenancy that started at certain times and even if the tenant has gone, it has to be treated as it would have been at the time UNLESS new legislation was retrospective, some is, some is not.

Now the other bad news is that Tenants never ask you for the certificate unless they have been told about your obligation, to be honest they can look it up, but at this stage they may want to just hear what you say.

Bear in mind that any tenant who goes to the Local Council for housing is told to check this as it delays eviction, the Council also figure that if a tenant gets 3x sanctions they may be able to afford to stay in private sector and off their books.

Even if you gave the deposit back, your tenant can bring legal action for 3 years from becoming aware of your obligation, there is a way to extend this to 6 years.

So the best thing to do is to come clean and settle, BEFORE she speaks to a legal firm because their idea of settling is you pay the max and they ramp up the legal fees.

Go to the top of the page and have a good read, then protect the deposit with one of the approved schemes but speak to her first and agree a settlement in writing that includes full and final settlement for deposit legislation.

162
Guest Avatar
Ian 27th July, 2017 @ 23:16

@David,
Thank you again for your prompt and detailed reply and even more so as this is not your site. We could all learn a lesson from your selflessness.
I have read your post with increasing concern and trepidation that I am potentially in some serious doo doo.
Essentially, every 6 months she has signed a new STA for another 6 months ,normally exactly the same contract but with the dates changed. I thought this was the correct kind of contract if you were offering a tenancy for 12 months or less. I had no idea if the tenant had been there for a certain period of time the agreement had to change to the continuation agreement.
I guess my tenant has either been told by an agent or social worker that I should have got a protected deposit, or (which knowing my tenantmay be more the case) she knew from the start and has been keeping this card securely tucked away waiting for the S21 to come.
Unless I can plead to her betterself and offer an acceptable reference, full deposit to be returned etc. I could be facing a lo...ot of trouble.
I have looked at the template letters and other letters in the blog and they seem to be geared more towards having received a formal letter from 'claimsco'. However, I feel I can use the feel of the letters to putsomething together to her but so that I don't admit to any wrong intentions or illegalities....thats going to be fun!
My understanding of the worse case scenario here is any or all of the following;
1) I get prosecuted (several times) for not following the correct process regarding secured deposits for each new tenancy.
2) I get prosecuted for not securing the deposit in the first place.
3) She makes a claim and I have to pay out 3xdeposit
4) The S21 gets thrown out/ignored and
5) I am now stuck with a tenant who knows she has me over a barrel and potentially could make my life a living hell.

Why oh why didn't I just get an agent? Oh yeah, I didn't want to pay 18% each month...could cost me a lot more now!

Also, I have now realised that there are many more comments to this blog than I can see on one page on my tablet so I shall take your advice and go all the way back to comment 1 to see what other landlords have had to face, how they managed the situation and what the outcome was.
I consider that I have been a good landlord keeping the property in good repair (I paid over £3,000 to have the boiler replaced in 48hours after it broke) and I have not imposed fees and fines when she was not paying her rent on time.
Thanks again for your advice.

163
Guest Avatar
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.

164
Guest Avatar
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

165
Guest Avatar
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.

166
Guest Avatar
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.

167
Guest Avatar
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!!

168
Guest Avatar
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.

169
Guest Avatar
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.

170
Guest Avatar
Ian 31st July, 2017 @ 19:10

And the negotiations have begun......

171
Guest Avatar
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.

172
Guest Avatar
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.

173
Guest Avatar
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:

174
Guest Avatar
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.

175
Guest Avatar
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.

176
Guest Avatar
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...

177
Guest Avatar
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

178
Guest Avatar
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

179
Guest Avatar
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.

180
Guest Avatar
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.....

181
Guest Avatar
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!!

182
Guest Avatar
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?

183
Guest Avatar
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.

184
Guest Avatar
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.

185
Guest Avatar
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.

186
Guest Avatar
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.

187
Guest Avatar
shell 16th August, 2017 @ 14:14

Thanks David i appreciate the advice

188
Guest Avatar
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.

189
Guest Avatar
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.

190
Guest Avatar
shell 16th August, 2017 @ 23:10

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

191
Guest Avatar
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

192
Guest Avatar
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.

193
Guest Avatar
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.

194

Please leave a comment...

Nobody

Nobody

Landlord

Landlord

Tenant

Tenant

Agent

Agent

Legal

Legal

Buyer

Buyer

Developer

Developer

Enthusiast

Enthusiast