I Haven’t Protected My Tenant’s Deposit, What Should I Do?

I Haven't Protected My Tenant's Deposit

For a general overview and background on tenancy deposits, please refer to the tenancy deposit guide. For landlords that are familiar with the legislation but have failed to protect your tenant(s) deposit for one reason or another, you’re in the right place.

If you’re a tenant that’s trying to figure out what your rights are because you suspect your landlord hasn’t protected your deposit, you’re also marginally in the right place. But bear in mind, I’ve written this blog post from the perspective of a landlord, so you may need to backward-engineer the information so it’s relevant to you. Alternatively, you can just jump over to my tenant deposit guide for tenants.

Brief reminder of what is required to comply with the Tenancy Deposit Legislation

To be in compliant with the Section 213 Housing Act 2004, any money taken from a tenant as a security deposit must be protected in a Government approved scheme with in 30 days of receiving it. Just to clarify, it is NOT a legal requirement to take a deposit, so this legislation only applies to those landlords that do (which is presumably the vast majority of landlords).

After the deposit is protected, the tenant must be given the Prescribed Information related to the protection of the deposit, also with in 30 days. NB. Make sure you have evidence that you have done it.

It’s also worth noting that ALL deposits ever taken must now be protected– even those taken before 2007 when the original deposit legislation was introduced (that was previously NOT the case). Landlords had until the 23rd June 2015 to protect deposits!

Once the deposit is protected and the proscribed information is served with in the allocated time, you have complied with the law until the tenancy ends – even if you allow it to roll on (known as Statutory Periodic Tenancy) after the fixed term has ended.

I didn’t protect my tenant’s deposit! HELP!

If you are one of the many landlords or Letting Agents (yep, they screw up too, but that’s probably no surprise) who have not protected your tenants’ deposit you’ve got a problem. Well you know that otherwise you wouldn’t be reading this. Hello, welcome.

There have been so many changes to Deposit Protection Legislation, since it was foist upon us in the Housing Act 2004, it’s not surprising that so many landlords get it wrong– but unfortunately ignorance is no defence in law.

I am going to do this backwards because it is when a problem shows its ugly face that most landlords realise that they have screwed up, so let’s look at some of the most common scenarios (sadly, none of which will save you), and from my experience, when most landlords frantically start becoming concerned about their non-compliance…

1) My tenants are threatening me
Your tenant(s) has discovered they can prosecute you and potentially make a quick buck by seeking compensation for your failure to comply with the law. Either you pay compensation or face legal action.

This is unbelievably common, which is pretty sad. More about what to do in this scenario below.

2) I need to get rid of my tenant but I can’t serve a Section 21
The penny usually drops when you reach for a Section 21 Notice and read the notes, which tell you what you have to do to serve a valid Notice on your tenant.

If the Deposit Protection Legislation has not been followed, you’re screwed – meaning you can’t serve a valid Section 21, and your only option is, possibly, serving a Section 8 Notice where you must prove grounds for eviction (which you may not have).

3) The Judge threw out my Section 21 because I had not protected the tenants deposit
Most savvy tenants will take advice when they are served with a Section 21 and one of the first questions they will be asked is “Did your landlord protect your deposit?” Followed by “Did he send you the legally required information about your deposit protection within 30 days?”

If they cannot answer YES to both questions they will be told to contest the Section 21 in court. That’s when the Judge will most likely look at the details and throw the case out of court, so here you are.

4) A bloke in the pub told me that I should have protected my tenants deposit – what is he talking about? I didn’t have a clue!
This is a typical case where the landlord has just one property, from when he moved in with his girlfriend, and hasn’t a clue about the landlord legal requirements. You have also heard through your sources that the tenant can gain compensation… and now you’re scared, wondering if it’s all true.

Yes, it’s true.

5) I forgot!
You forgot to protect the deposit and/or serve the prescribed information (not sure how many people will believe this one!).

Any of the above sound depressingly familiar? If your case is not one of the above (or similar), please leave a comment with the details…

I didn’t comply with the Tenant Deposit Legislation– what can I do?

Now, let’s get to the crux of the matter.

As it stands, these are your options:

  • Recommended solution: Protect it now and serve the prescribed information hoping that if an issue arises and it goes to court the Judge will take the view “better late than never”
  • Pay the deposit back to the tenant and hope that he doesn’t find out that he can get compensation, although it might be difficult to explain *why* you’re giving it back.

    Suggestion: just come clean, say you didn’t follow the proper procedures and you’re trying to rectify the situation. Don’t mention the entitled compensation.

  • If you’re trying to get rid of a rogue tenant and you have grounds for eviction (e.g. your tenant is in 2 months rent arrears), serve a Section 8 (as already covered, unlike with a Section 21, you don’t need to comply with the tenancy deposit legislation in order to serve a Section 8.
  • Do nothing, but sit tight and pray that your tenants don’t realise protecting the deposit and serving the Prescribed Information is a legal requirement and/or they don’t care enough to seek compensation because you’ve been an amazing landlord.

If your tenant hasn’t mentioned anything…

There’s a good chance your tenant isn’t aware of the tenancy deposit legislation or the ramifications of failing to comply. It’s also not unusual for tenants to be aware, but waive their right to prosecute because their landlord has been reasonable throughout the tenancy.

The point here is that you don’t want to give your tenant a reason to look into the legislation or exercise their right to claim compensation.

  • The most common reason why tenants proceed to take legal action is because they feel screwed over by how the deposit has been handled (i.e. when landlords try to make deductions over trivial and menial damages, which actually, quite often fall under wear and tear). So when it’s time for them to vacate, forget the temptation to deduct £90 for carpet cleaning, or £50 for picture hook repair, just let it go. Otherwise they may start looking into their rights. Generally speaking, biting your lip and absorbing those costs is the safest and cheapest option!
  • The second most common reason is failure to complete repairs promptly, or making repairs at all. Ignoring your duty to maintain and repair is a sure-fire of pissing your tenants off, consequently giving them reason to prosecute given the opportunity. So with that in mind, and ethics aside, it might be sensible to ensure matters of repairs and maintenance are attended to promptly, and generally be a good landlord all round (you should be anyways, mind you!).

    It’s also worth noting that if your tenant does take the matter to court to seek compensation (regardless of whether you’ve been a good or bad landlord), some Judges do take into consideration how the landlord has conducted themselves during the tenancy before determining how much they should be penalised.

Can I get in serious trouble for not protecting my tenant’s deposit? What can happen?

Putting it bluntly, you have broken the law, so yes, there can be consequences.

  • A tenant, who takes legal action, can expect to be awarded compensation because his legal rights have been denied. A Judge has the power to award between 100% and 300% of the deposit in compensation and may also instruct you to return the whole deposit. This can be an expensive loss, not just because of the compensation, but also if you actually need use the deposit to cover damages.
  • Because you have not complied with the law, your rights to use legal process to remove a rogue tenant have been reduced- you can no longer use Section 21 of the 1988 Housing Act (which is often the most efficient method of removing a rogue tenant).

My tenant is threatening me with legal action, what should I do?

Ok, so presumably shit has hit the fan; your tenant has discovered you failed to comply with the deposit legislation, and now they’re after a handsome payout. Unfortunately, this is becoming a terribly familiar scenario, rightly or wrongly so.

What to do at this stage will depend on the individual circumstances, so there isn’t a simple solution for all. However, there’s more information available in the “ways you can legally end a tenancy agreement.

My letting agent did not protect the deposit…

Oh dear.

Your hired help has failed you. Common scenario.

So where do you stand in this case? Are you given the luxury of mercy? Unfortunately, you’re in the exact same position as if you have no association with a letting agent. If it’s of any consolation (which it probably won’t be), the law was specifically changed in the Housing Act 2004 to allow tenants to sue the agent as well as the landlord for the penalty for non compliance of protecting the tenancy deposit.

If you are using a Letting Agent and they do not protect your tenants deposit correctly– you’ll still ultimately be held responsible. Even if you have not touched a penny the law states that the deposit was taken on your behalf and therefore you are responsible. That’s why it’s essential to ensure that your Letting Agent is a member of a Property Redress Scheme (legally required since October 2014) so at least you will have redress if they screw up.

A Letting Agent cannot go to Court for Possession without the property owner, he can go with you as what is known as a “McKenzie Friend”. He can complete the Notices and other documents but you must sign them. Only a legally qualified person can represent you in Court.

Does anyone else have any additional tips to share? Do you have any experiences to share regarding this matter, whether you’re a landlord or a tenant? I’d love to hear your story!

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Showing 762 - 812 comments (out of 812)
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Rob 6th August, 2020 @ 21:56

Hello, no idea if you are still replying to comments but i was wondering if you could help.

We have recently ended a tenancy with our landlord and he is claiming back our deposit. However, we have noticed that only part of our deposit has been protected. The full amount went to him at the beginning of the tenancy. Is this something we should bring up to help reclaim our deposit?

Thanks

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David 7th August, 2020 @ 08:30

@Rob

Each case is individual and there are numerous case law decisions that lead to different outcomes.

As you have a live case and these comments are public, I suggest you contact me via the forum private message system.

Please see post 757 for how to do this.

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Denise 14th August, 2020 @ 07:26

Hi. My agent served section 21 on my tenant beginning of February as I needed my house back for family. We extended the leaving date a couple of times and eventually agreed on the 31st July. This was due to Covid. 6 months I felt was a decent period and my tenant was not affected financially through Covid. My tenant up till this point had been fine and had stated was moving out but 2 days prior to the end date decided not too. She states she is looking for that perfect home! I informed her I am now desperate for the property and would have to go through the courts. Low and behold I am filling out the accelerated possession order and discover that the agents took three years to deposit the deposit and didn’t sent any information back to the tenant. I have sent papers to court hoping that as the deposit got protected eventually it may still go through. My tenant is not in rent arrears. As it is likely the courts will kick it out what are my next steps. I can’t use section 8. Should I look at giving deposit back and going back down the route of section 21. I am hoping the tenant then doesn’t become aware of her right to claim. I am so angry with the agents as they cocked up. I thought I paid them for their expertise! Lessons learned. Any advice would be great. Thanks

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David 14th August, 2020 @ 12:56

@Denise

If you agent was contracted to meet your legal requirements with regard to deposit protection, then they can be held responsible for your consequential loss if it was caused by their negligence.

Putting aside the restrictions of Coronavirus legislation which stopped all eviction hearings and required a special "coronavirus" "S21/S8 notice with three months notice.

Any expiry date on your notice or something agreed in an email is really just a "hoped for leave date", even a tenancy expiring requires S21 notice because a new Statutory Period Tenancy will start on the day of expiry if the tenancy is not replaced/renewed.

It is important to remind you that no tenant may be evicted without a Court Order, proceedings for such an order require a legally valid notice (S8 or S21).

Your S21 notice was not legally valid anyway, so you are throwing away your Court Fee

Applications for Proceedings for evictions may not be made until 23rd August 2020 and I can assure you they will be looking for any defect in order to reduce their workload. In fact they have introduced a whole load of new hurdles and requirements.

6 Months is not a decent period, there is still a Pandemic and your tenant will need to find a suitable new place to live, although her aspirations for an ideal property may not be realistic she is entitled to stay until legaly evicted.

I honestly doubt that there will be new eviction proceedings before December and actual evictions before February. By then we will have the cold weather which makes the nose wetter and gives the virus a more productive reservoir so a second or third wave will be in effect. You can see the impact of the cold in workplaces such as the one in Northampton this week which had 300 infected employees.

If your original tenancy expired or was replaced, you are liable for sanctions of up to 3x the deposit PER TENANCY. The tenant can bring proceedings against you within 6 or even 12 years in some circumstances. Luckily you can possibly hold the Agent liable, however, if they are one of these dodgy agents you will have to work for it. Even the legit agents resist but they pay up in the end because the legal fees they will face will double their loss. This does depend on them being contractually liable, I would download copies of all their terms in case you do not have them to hand.

Giving the deposit back is a dumb move for all but very very old tenancies, it is held for damages, until the tenancy ends you can't know that. Paying it back will not release it from the scheme without her permission.

You need a reality check, you are not going to be able to legally evict this tenant this year, forced eviction would leave you open to all manner of fines and sanctions including a daily rate on rent that would be eye watering.

The best solution would be to negotiate an agreement where you effectively pay this tenant to leave of her own accord, such an agreement would have terms that also settle the deposit protection claim. This can be seen as mitigating the loss to the agent and once I check your paperwork you can inform them that you are holding them responsible.

I recently settled a similar claim with a tenant, the agent tried all sorts of delaying tactics but in the end paid 9x the £1500 deposit. I can write you a series of emails that you can send to your tenant without dropping yourself in it.

You honestly can't just hope the tenant does not become aware of her rights or that the Court will make a mistake. Even if the Court makes a mistake and issues the papers (which I doubt) she will get advice and it will take 2 minutes to show the S21 is not valid. All she has to do is log into the tenant portal of the deposit protection scheme used, check the date it was protected and inform the Court. Then you can kiss goodbye your Court fee.

Worse still she could seek legal advice from Shelter, her local Council, her local barman or her mates on Facebook and be told to check deposit protection was valid.

The best way forward is settlement, but we may be able use it to get her to leave of her own accord if worded right.

As you have a live case and these comments are public, I suggest you contact me via the forum private message system.

Please see post 757 for how to do this.

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Alex 2nd September, 2020 @ 15:51

@David

Just a couple of quick questions. I'm looking into claiming for two separate tenancies that I had with the same landlord - neither time the deposit was protected.

1) I can't seem to find the signed contracts for either AST, is that a problem? I have PDFs of the unsigned contracts, as well as the associated emails, and bank statements showing payment of rent - would this suffice?

2) There were three of us named in each contract (though they were different people on each contract, though I was named in each) i) do I need to make all of the correspondence, including the letter before action, from all three of us - or can I claim on behalf of everyone? ii) do I need to provide proof that all of us were living at the property, if so what would you recommend?

3) I am looking to represent myself - can I claim for any other costs on top of the 3X deposit, and if so what would be a reasonable amount to be?

Thanks in advance.

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David 2nd September, 2020 @ 17:02

@Alex

It would only matter if the Landlord denied the tenancies existed in which case you would be expected to prove they did exist. One would reasonably expect each tenancy to be in your bundle. You should be fine filing the electronic versions and the supporting emails etc. They must be AST's not lodger agreements, if the Landlord lived on the premises with you then you were lodgers.

I would strongly recommend you seek a settlement with your Landlord, rather than putting yourself through all the hassle of getting your co-tenants involved. If the deposit was £1000 the maximum sanction would be £6000 for two tenancies, you have no guarantee that the Court will award that.

If you were a Landlord and you could settle with one tenant for £666 (or even £1000) you might jump at the opportunity to settle.

My point being it is easier to just reach a settlement of what you would likely get than fight a complicated case with 6 parties on two contracts. If a case was won it would order that the Landlord paid sanctions to the parties not all of it to you.

If a Landlord does not make a settlement and that forces you to take legal action it works against them, this works both ways, if a Landlord offers you what you would likely get in Court then you may be deemed the unreasonable one.

Representing yourself is fine, but you may be up against a solid Barrister who ties you in knots.

The rule is that if you do not incur costs you can't claim for them, with no lawyer all you can claim is what are termed as fixed costs. You can look these up but you are mainly talking about real costs, a few hours off work, travel costs etc.

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Alex 3rd September, 2020 @ 07:21

@David - thank you so much for that, very helpful.

I am good friends with all of the former tenants so that is not a problem. If a settlement could not be agreed, I was thinking of filling two separate cases - one for each contract (it was for the same flat) - though would you recommend just submitting one claim for both contracts? They were both ASTs - the contract used was from a landlord's association so the contract itself is not an issue, I was more worried about the lack of signed copies but thanks for clearing that up.

All of the deposit and the rent came out of my account, with the other tenants transferring me the money rather than transferring it directly to the landlord.

Finally - do you have any guidance on what factors make it more likely for a court to award 3x rather than 1x?

Thanks again.

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David 3rd September, 2020 @ 10:07

@Alex

Being great mates is one thing, being party to a case is another thing. I had a case around 6 months ago where a clerical error was made in the claim.

The defence had hired a Barrister, the tenant was represented by their local Solicitor who had very little housing law expertise.

The Barrister raised the error and defended the case on that defect only, the case had to be resubmitted, the Barrister sought costs to date for defending the defective case and got £2k against the tenant, plus Court Costs were lost.

When you become a party to a claim you take on risk, living with you is one thing, allowing you to open them up to legal claim. I would be asking what legal expertise do you have and would you indemnify me against and counter claims. Also are they all prepared to take half a day off work to go to Court, the Landlord is within his rights to confirm they are party to the claim, if he has held back any of the deposit he may seek a witness statement from each of them. They may not be a party to the claim but merely authorise your bringing the claim but that does not totally indemnify them.

If I were the Landlord facing such a claim I would be writing to each tenant asking them to confirm that they were a party to the claim and were willing to take on the risks involved. As long as there was no intimidation that would be fine.

If you can get their support you might be better off going to a specialist claims company even though you lose 35% of any award. They would get each tenant to confirm their position and tell the Landlord that they must not contact the claimants directly.

It would be possible to create one claim with all parties, to save on Court fee, the particulars of claim would need to be well defined. Assuming you have a solid case that can't be disputed the Landlord will be paying the Court fee anyway so it is up to you.

As I said I would recommend a settlement and I would not involve the housemates, that would give the Landlord an incentive to settle. If they did not engage then go to a claims company and let them sort it out.

It does not matter that you were the one who paid the deposit money, it was paid pro-rate for the parties to the lease and they will be paid individually. The Order will specify that because this is not their first rodeo.

The 1x to 3x can be a crap shoot, there is culpability, for example if they had an agent and the agent contract clearly specified that the agent took responsibility for the protection of the deposit and all the legal obligations (e.g.PI) . Being a novice landlord is often used, I have seen that backfire with a Judge saying they had responsibility to make sure they complied with all Landlord legal responsibilities, but in the case law below it was accepted, although in my opinion mostly because of the agent was responsible.

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

This was an appeal by a tenant against a 1x award and they sought a 2x award, they lost and I imagine the costs were huge.

This case law does not mean that these excuses must always be accepted, it says that the District Judge has the right to decide on the scale based on the evidence before them.

They also considered the fact the the mistake was corrected

"In my judgement, however, the judge was entitled to regard the question of culpability as the most relevant factor in determining what order to make and was entitled to find that the culpability in this case fell at the lowest end of the scale for the reasons which she gave. It is not as if the breach was uncorrected and therefore, although the appellants were lacking the protection for a period of some months, in the end matters were put right."

This case law can work for both Landlord and Tenant depending on their circumstances. For a deposit that was not protected for two to three tenancies it confirms that such cases are a serious breach.

Although there is only 1 set of sanctions per tenancy, there are different breaches, so a Landlord who protects late but does not serve the PI has just a serious breach. Otherwise the Prescribed Information order requirement would not have been reinforced the way it was.

Another factor that works against landlords in judgements is when they do not give the deposit back, if they make spurious claims of damage for what can be fair wear and tear.

Do not take it for granted that you will get 3x the deposit, some Judges are Landlords too, some do not like people seeking pay days.

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Alex 5th September, 2020 @ 09:35

@David - thank you again so much for your detailed response - incredibly helpful.

The landlord is a professional landlord who lets out multiple properties. There was no agency involved. We received the full deposit amount back each time, which I assume will work in our favour re: condition of the property when we moved out. The rent was also paid on time without fail.

We were told in writing beforehand, and in the contract(s), that the deposit(s) would be protected with a specific DPS, though we received no further information about this after the deposits were paid. I have contacted all of the agencies to 100% confirm that they were not protected, but all of the searches through their websites have come back blank. We will be trying to seek a settlement before proceedings are issued. A few further questions:

1. Is it possible to claim interest relating to the compensation, and if so is that calculated at 0.00022% / day - starting from 31 days after the deposit was paid, until the day that the claim was submitted to court?

2. On one of the contracts, there was a discrepancy between the amount of deposit required and the amount of deposit paid of less than 50p - is this problematic?

3. The total claim for everyone for both contracts is quite large, £15k+, which takes it over the threshold for a small track claim. On this basis, would it be better to submit the claims for each contract separately?

4. I understand your concerns re: submitting collectively, though this is what we want to do, and I am happy to do this on behalf of the group. Does any extra information need to be provided to the landlord / court relating to this, other than stating that I am bringing the claim on behalf of all of the previous tenants?

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David 5th September, 2020 @ 12:39

@Alex

I think I have given you all the advice I can, which is to settle for yourself not bring claim for the group, but you are not taking my advice so there seems little point in adding more, this will be my last reply to you on this matter.

You were never going to get this on small claims track anyway, but if I was the Landlord on the receiving end of this I know how I would wrongfoot you and subject you to costs.

I am happy to help most tenants but your approach seems money grabbing rather than wronged.

Getting your deposit back does not mean you looked after the property but more like the Landlord was half decent and not the sort to use your deposit as his or her redecorating fund.

No you will NOT be getting any interest, WTF do you think the sanctions are? You were not entitled to interest, your deposit was held for the performance of the contract. The contract almost certainly said you would not get any interest and that the money would be held in a scheme. Your deposit was returned in accordance with the contract.

With respect, you do not have a clue what you are doing, you seem hell bent on punishing this landlord for what may have been an simple oversight and you want to hit him up for £15k.

Don't get me wrong, some landlords deserve it, but based on your posts so far it seems to me you are just trying to squeeze every penny out of this Landlord.

Currently Landlords can't evict tenants, have to give six months notice on an eviction notice and then wait probably another six months for a hearing. By then they will be allowed to only evict tenants on serious arrears or Antisocial behaviour.

Some would argue that Landlords have been holding up this country since the Pandemic started and will need to do so at least to the end of next year.

Many Landlords are struggling, having to service BTL mortgages that make very little money, barely enough to cover annual maintenance. Your £15k claim could force them to abandon property, ruin their credit record, the Mortgage company will repossess and some new tenants will be kicked out by High Court Enforcement officers.

I gave you a suggested remedy which was to negotiate your bit, but you are being greedy and it appears vindictive.

You cannot just "say" you are bringing the claim on behalf of the other tenants.

I seriously doubt you will get this claim to work and so if you are determined to proceed I suggest you use one of the claim companies, they will determine all the permissions required and evidence or they may tell you to take a run and jump.

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Martin 18th September, 2020 @ 01:02

I've had awful tenants for a 6 month winter let. They have left. But left a lot of damage. I took a deposit but didn't protect it. They left all there tenancy documents in thw property along with other rubbish inluding mattresses as extra people where living there. They caused upset to neighbours, Who will vouch for this.I know they have NO copy of the tenacy agreement ECT as asking me to send copys. Obviously they want to make some easy money.They have not paid any bills as bills included and they didn't register for council tax or any other utility bills. They only paid for Wi-Fi at the property. Can they even prove they lived there if they throw the deposit protection hic up at me.They were receiving post though.?
Thank you

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David 26th September, 2020 @ 16:21

@Martin

I think that you should assume that they can prove they lived there, a bank statement, letter from hospital confirming an appointment or anything, but most importantly because they did live there.

Faced with a claim letter from a claims company or law firm would you seriously deny that they lived there?

If they are as bad as you suggest then there may not be much hope in trying to reason with them and anything you write needs to be without prejudice.

What this comes down to is evidence of damages, if you did not return deposit and did not use a scheme then that will be why you may soon be facing a claim.

The whole idea of DPS/TDS et al is that you pay them the deposit and let them know of any deductions you wish to make. If the amount exceeds the deposit then you can take them to Court otherwise best to leave it to the deposit company.

How much you face in sanctions will depend on how many tenancy agreements there were and the gravity of your failure.

If you get a claim letter please see post 757 for how to contact me.

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Sam 8th October, 2020 @ 11:19

I rented out my own property as I was moving city. found 2 girls on gumtree, they rented my property and paid me £1000.00 deposit. I registered with DPS in figuring out how to do everything. Girls moved into my property and I submitted my deposit as a reminder came from DPS 4 days after tenants moved in that no money has been submitted yet. The money did not get deposited. I have no ides why. I then went abroad due to family bereavement. When I came back, I saw no deposit was submitted. I called DPS, informed them that money transfer failed in past. Informed the girls too. Submitted deposit again. So I was 2 months late. It was my own property and I gave them with everything in it as I was living in. It was bought brand new and was like a showhome. These girls started to sublet the property and caused some damages. When I visited the property I was informed by my neighbors that they are experiencing anti-social behavior. A lot of things happened that were not pleasant from my tenants. They got LivingRent involved, that made us sign a contract that both parties will not take matters to tribunal and sort it out. I will not seek them pay bills and allow them to stay for sometime in property so they can find another decent property to live etc. I complied as I did not want tenants to manipulate the situation and take me to tribunal. Anyway tenancy ended, I deducted £150 for fair damages through DPS. These girls lodged a case against me in tribunal. Tribunal has asked me to pay £700 as lower end of penalty due to unintentional late deposit submission. Should I ask the tribunal to review penalty amount?

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Trace 29th October, 2020 @ 19:25

Hi,

Great blog thank you!

I rent my flat to 2 separate tenants, they each rent a room and share a communal area.

At the time of letting it out to both tenants (Nov 2019) I had just had a baby and my father died just after so my head was all over the place.

The tenancy is coming up to a year now and both tenants wants to stay on a rolling contract. I was just looking the the DPS account the other day as I wasn't sure if I had to issue a new contract as it was fixed term and if I had to renew the deposit. To my horror there was only the first tenants deposit there. Im sure I had protected both but i'd only done it for one. NO excuse at all and i'm really kicking myself now. I used to protect deposits for my lodgers when I didn't need to so I wasn't trying to fool anyone it was a genuine mistake. I've found this particular tenants quite hard to deal with and I really want to be honest with them but I feel they will react badly.

I've been reading all your responses and i'm gathering that I would be better off keeping this existing contract on a rolling basis after the fixed term expires 6th Nov and put the deposit in a protection scheme asap. But I would have to tell her i'm doing this and she would wonder why. Honestly cannot believe I made this mistake.

Thanks in advance.

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jash 6th November, 2020 @ 16:00

I had tenancy agreement with the agent who was than subletting my property where the agreement came to an end in August 2020. I was also informed that the agent will secure my deposit but unfortunately I did not receive any evidence of this. Contract came to an end end of August 2020 and the agent is not giving the property back to me and I am also not getting rent ie since March to date I have only received 50% of the rent. the reason is that the occupant the agent has put in my property is refuse to vacate and due to Covid the court will do nothing at present.
1. so I have no contract at present
2. How do I secure the deposit myself
3. What are the my legal rights as I do not have a signed contract.
4. The agent is not picking up my calls and the office where they use to operate from is no longer there. I have only telephone number

I am loosing so much sleep over this and cannot see a way out.

Any advise is greatly appreciated

Regards

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Anna 16th November, 2020 @ 15:40

I am a landlord and my tenant has left and I was not given the deposit but now the tenant has sent me a letter before action to pay them the money and more compensation. I need to claim for damages to my property. I need your help with this.

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David 22nd December, 2020 @ 02:02

@Sam

Sorry for the late reply, not been getting notifications from the site.

Living Rent is part of Scottish system, so not qualified to go into too much detail, however, most of the law mirrors the rest of the UK.

From what you said I guess it is a question of what exactly was agreed about not taking action with Tribunal. Also, did the £150 claim break the agreement not to take things further.

You did not say how much the deposit was, but if it was also £700 then no point.

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David 22nd December, 2020 @ 02:11

@Trace

Sorry for the late reply, not been getting notifications from the site.

You refer to them as tenants and as lodgers, to be the latter you have to live with them in the property. Deposit Protection only applies to tenants on an Assured Shorthold Tenancy or deemed AST if none provided or an SPT.

Had I read your comment when you sent it I would have advised extending the existing contract BEFORE allowing it to go to SPT.

You should always protect the deposit as soon as you realise, if you protect it within the term of the first tenancy and fully comply with all the provisions such as serving the PI within the first tenancy, then the SPT would have been deemed as protected.

One thing for sure, no matter how "difficult" tenants are they are worse once you have no relationship. I hope you have protected that deposit now.

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David 22nd December, 2020 @ 02:26

@Jash

I am not clear what you mean when you say "I had tenancy agreement with the agent who was than subletting my property where the agreement came to an end in August 2020."

Usually you would engage an Estate or Lettings Agent to rent your property, you would have a commercial agreement for them to act as letting agents and that agreement would determine their obligations.

If you let the property to a person and they sublet the property under their own agreements stating they were the landlord, they liable to those tenants. There are some obligations that can go through to superior landlords, there has been some recent cases where the intermediate landlord was a sham created to avoid this obligation, needless to say the Court saw right through it.

You say that you were "informed" they would secure your deposit, it is not your deposit it is the tenant's deposit, but this can help you if you have that in writing.

I am not clear what you mean by agent not giving it back, is this "agent" really a tenant?

Did they live in the property with these sublet tenants, if so, unless you gave a tenancy with him as lead tenant and authorised him to find co-tenants, then they were probaly lodgers and no obligation to protect deposit if on a licence rather than AST.

As the situation is ambiguous I will need to see what documents you DO have to answer your questions.

I am happy to take a look at the paperwork, but I suggest you contact me via the forum as these are public comments.

I am sure I can work out a way to cover you and get this sorted out.

See post 757 for how to contact me.

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David 22nd December, 2020 @ 02:30

@Anna

I am not clear what you mean by "I was not given the deposit"?

If a tenant does not give you a deposit there is no need to protect a deposit that does not exist.

If you mean you did not give it back then you would make a claim with the deposit protection company you gave it to.

If you did not protect the deposit you may be liable for sanctions but you can counter claim for the damages or file them first.

See post 757 for how to contact me.

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Janey smith 4th January, 2021 @ 22:33

I am 2 weeks late registering my tenants deposit, due my hubby being ill with covid.. I have not registered and sent prescribed info to tenant...would it be possible to end the tenancy at the end of the 6mth contract and refund deposit to tenant... Then start a new 6mth ast without deposit?? I'm now constantly worrying and don't want this to bite me in years to come.. I'm stressed enough with my hubby being ill, do need any more grief, would rather just give deposit back and if there's damage then that's my own fault

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David 5th January, 2021 @ 07:17

@Janeysmith

no No NO!

Get it protected immediately, the law allows mitigation and I can help you reduce any claim but for now get it protected and get the PI served properly.

The law does NOT allow for Covid or the 1000 other excuses, do not admit anything in writing, just get it protected TODAY and serve the PI, have them sign one copy. Send it via recorded delivery at the least. Enclose an SAE and in a few days send it via email with a BCC to another email address and a receipt request in the email.

JUST DO IT!!

Returning deposit does not help you, if you took a deposit and did not protect it and serve PI with the 30 days you could face a sanction.

If you wait until the end of the 6 months you may pay more.

There is no point worrying about things that have not happened yet and may not happen at all. Most claim firms will search online and see it protected (if you protect it NOW), it is only the tenant who will know the exact date but as long as you do not make a grab on their deposit they are likely to be fine.

Do not give any favours on damage or arrears, these are things that can be leveraged in a claim.

Make sure your deposit is NOT more than 5 weeks rent as it would be a breach of Tenant Fees Act, also make sure you are licensed if it is a requirement of the property.

As you forgot the deposit I will remind you to also give the tenant the Energy Performance Certificate, Gas Inspection Certificate, Electrical Installation Condition Report (see right) and how to rent.

Why are you still reading this?

The DPS custodial scheme is FREE.

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Emma 15th January, 2021 @ 00:45

Dear David, I hope you are well. Thank you for running your website, it's really interesting.
As background, I've been renting for two years and living in a property in a terrible state of disrepair - the day we moved in the boiler was condemned and there was a gas leak.
Since then, there's been a catalogue of disrepair.
The final straw last week was the boiler breaking (same boiler which was broken the day we moved in), and being without electricity for 6 days with no heaters provided in the interim.
I am looking into the deposit as part of my deposit isn't protected - I initially paid £2,600 deposit, 6 weeks before moving in, plus one month's rent.
A month later I was told that I had been rejected as a tenant so I paid another 2 weeks rent, equating to £900 which was never protected in a tenancy deposit scheme - although the initial £2,600 was.

I've read some of your advice to other people, and I'm interested in the case which you mention, where the judge decided to award two times the whole amount of the deposit - as opposed to the amount of deposit which wasn't specifically protected.
Is this case in the public domain and if so are you able to share details please.

I was also interested what you say about being able to make a claim against the landlord and the agent - I would be interested to do this as both parties have behaved abysmally. Are you able to let me know please, what is the process for this - do I file simultaneous claims against both?

Also are you able to let me know if making a claim now will affect whether the landlord could later serve a S21 on me please. I would also have potential protection against that because there was no Gas Safety Certificate on possession of the property, and the gas safety certificate now doesn't include the gas hob.

Thank you so much

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James 17th January, 2021 @ 10:13

What a brilliant thread.

I have an assured shorthold tenancy signed in 2018 which was initially for 6 month and was not renewed but just ran on. The deposit was bonded within 7 days, but the pi was not given until after 30 days, so from what I have read there was a breach - stupid me.

The tenant is in arrears of around £800, so I can not use a s8.

I have read that one approach would be to refund the deposit to the tenant and then serve a s21.

As an alternative, am I able to agree in writing with the tenant that their deposit may be refunded directly to their rent account. Ie. Could I transfer the deposit directly to to my account to offset some arrears ? My thinking here is that it would offset arrears and also enable me to serve a s21 in future if arrears grow again. I understand that this would not stop a potential claim for the none protection, but it would at least get the arrears down and reinstate the s21 option?

Or - does the deposit have to be physically refunded to their account to be classified as refunded?

As a second question, as the pi has now been given correctly, can a s21 now be used?

Many thanks James.

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David 18th January, 2021 @ 20:42

@James

I do not know how many times I have said this but NEVER RETURN THE DEPOSIT until the contract is ended, it is held for the performance of the contract and tough to get out of schemes anyway.

Most importantly you are giving up leverage with no guarantee that they don't claim and still damage your property

As the live I recommend we take this to private message via forum to avoid you prejudicing yourself

I don't know if you noticed but there is a pandemic on, current S21 require 6 months notice plus 6 months to get to Court (assuming no mistakes). So yes if you have rectified the error you may serve a S21 but that would put their back up and from what you say you may be facing two breaches of at least 1x the deposit, but we can negotiate a settlement.

A section 8 takes as long unless there is a year of arrears or serious antisocial behaviour with authorities involved showing a long history.

I am sure I can help you negotiate a mutually beneficial outcome for you and your tenant.

It will start with a really friendly letter crafted by me which will help them get their head out of the sand and help get the additional financial support to cover the rent or most of it if you charge over the going rate.

The key thing is we will reach a settlement and turn off the tap that is leaking your money.

The fact is that there is a psychological state of mind of a tenant in trouble, they tend to avoid comms if they do not have a solid offer but we need to get them before they are at the stage where they have just given up.

See post 757 for how to contact me, be quick because the dreaded lurgi has me.

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philip 7th February, 2021 @ 09:07

HI David

I have two rental properties side by side.
one has a tenant in of only three months and the neighbour has complained he is making excessive noise .
I have looked into my options and if i eventually served a section 21
i have realised that although i paid his deposit into a scheme the next day after recieving it i did not provide him with prescribed information which i always thought the scheme got intouch with them.
so whats my best option provide it now, and if i do can i then be able to serve a section 21. would a judge still throw the court order out. i want to remedy it now than have the problem down the line please.

thanks philip

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David 7th February, 2021 @ 14:01

@Philip

My general advice to Landlords faced with issues of noise and disputes between neighbours is DON'T GET INVOLVED and refer them to the Council.

You will know that pandemic or not you can't end a tenancy until 6 months, but you can issue a S21 two months before it is due to end or if there is a break clause at 6m, however, currently the notice is 6 months and likely to be a further 6m to 1y to get a hearing.

There are faster track evictions for 12 months rent arrears and for antisocial behaviour, however the latter requires strong evidence. Excessive noise by itself would probably not cut it but if there was aggression from the tenant and/or visitors, plus evidence from several sources, it might happen.

Start by formally informing the tenant in writing that there have been complaint(s) about excessive noise, asking them politely to try to keep it down.

Get the neighbour to contact the Council for the diary form, get them to record examples of the antisocial behaviour.

If there is real antisocial behaviour rather than someone just playing loud music occasionally, you can pick up cheap individual battery operated wireless CCTV cameras for around £70, putting one in communal area may help capture some evidence, they are activated by movement and can save data to the Cloud via internet if there is wifi, others have an a memory card.

Once the diary has enough evidence the Council will provide recording equipment and get involved. This all provides evidence.

Also if they are having parties and the neighbour suspects that there is drug dealing then have them call 101 and get the reference number for the call. If Police bother to attend have them film any confrontations and audio record too to aide memory to provide notes.

However, if it is just noise I would stay out of it, maybe send a letter if you get complaints but no more.

Your deposit will show as protected on the appropriate scheme the issue of the PI may never come up. See post 757 for how to contact me privately if you need to discuss PI further.

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Matthew 8th February, 2021 @ 12:54

Hi David,

Thanks for writing this.

I have read through everything above and am wondering if you could shed some light on our situation, please.

We moved in to our rented property in June 2019. We have received an email today to say that our deposit has now been put into a protection scheme as of today. We have had no correspondence about a dps other than this.

The property is through an established letting agent who has so far ignored our complaints about our back gate being broken, despite twice reminding them.

Can I ask what our position is legally with the letting agent not complying with the 30 day dps period?

Many thanks in advance.

Matt

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David 8th February, 2021 @ 14:52

@Mathew

First of all, your primary case would be against the Landlord named in the Assured Shorthold Tenancy Agreement (since 2015 the agent can be added, or the Landlord can take action against them), if the tenancy does not contain the address of the Landlord you are entitled to temporarily withhold rent if the Agent does not provide you with the address of the Landlord when asked. Alternatively you can spend £3 at the Land Registry website and get a copy of the title deed.

Now it could just be that they moved it from one scheme to another or It could also be that the Agent updated their computer system and it triggered the notifications, however the law requires that you are provided with the prescribed Information within 30 days of them receiving the deposit.

Assuming that they forgot to protect it there is no rush to make a claim, you have up to six years and claiming now will not only sour the relationship but likely to trigger claims on the deposit when you leave. This is why it is critical to jointly take an inventory when you move in and again when you move out.

I also recommend that once you have left you contact me to help with your claim, I do not charge anything and more often than not both sides are keen to avoid Court. Claim firms will take one third of your settlement but also many rack up their charges and are unreasonable.

You say you moved in in June 2019, so I am guessing that you had an initial tenancy that expired, it being an agent it is likely that they were fleecing the landlord and yourself with new tenancies every 6 months or one year so they could charge a fee, rather than letting the tenancy become Statutory Periodic. Either way, you may be entitled to a sanction of between 1x and 3x per tenancy, the amount of this depends on case law and the interpretation including an assessment of the circumstances of your tenancies.

Bringing a claim requires that you follow Pre-Action Conduct and Practice Direction under Civil Procedure Rules, again I can help with that, but I strongly recommend you do not bring claim until you have left, Especially as each new tenancy adds more. Usually in cases like this we seek a settlement with the agent, some are right cowboys and throw up all sorts of nonsense but the last one I dealt with paid the full sanctions, if he had not bothered with all the BS we might have settled at 1x.

As this is a public blog and you have a potential live case I suggest you do not discuss the specifics of your case here but contact me via the forum. See post 757 for how to contact me privately via the forum. I may take a day or two responding as I am still recovering from bad bout of Covid with lung damage.

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Liz 11th February, 2021 @ 11:36

Dear David,
On vacating my rented home the landlady accused me of damage to her property which was minimal wear and tear and attempted to claim over £800 when contacting DPS about the return of my £550 deposit.I contacted lawyers on a no win no fee basis when I realised that she had been late in placing my DPS deposit and she had failed to provide me with any info of prescribed documentation anytime during my 5 year tenancy.
I was a great tenant, houseproud, no pets, live alone , very few visitors, paid rent in full on time and Im a very quiet 68 year old lady. She got £33, 000 in rent and only paid £42000 to buy the house and spent little doing it herself up with her brother, new kitchen doors on old carcasses etc but missold as " new high gloss kitchen" and other exaggerations!
The lawyers were great at first collecting my bank statements and photographic evidence ,contacting her lawyers who admitted nothing, denied everything and assassinated my character questioning the voracity of my evidence before it was being presented. Eventually months later they offered 2x deposit still not admitting other than saying they agreed that the prescribed info was 5 days late.! A huge lie as I didnt get it at all!
Then ....DISASTER! I couldnt get hold of my lawyers by phone I believe they were taken over and I got mixed messages stating that my case had cost them greatly! Then I fell seriously ill for ages having to appoint my ex- husband as Power of Attorney. The greedy landlady requested DPS return the deposit to her as she hadnt heard anything for a long time from my lawyers but DPS had put a hold on it as they believed I was going to court.
Now Ive found out that DPS have returned the deposit to the landlady as I failed to get a court date within their 6 month deadline!They knew I was ill!
Im outraged! What can I do as its been over 6 years now since I paid the deposit but its dragged on because of lawyers still seemingly unwilling to provide service and my ongoing illness? The new management just arent helping or communicating despite our contract.

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David 11th February, 2021 @ 12:58

@Liz

I think the first thing will be to track down the original Solicitors which I can do for you.

As you have a live case I suggest we do NOT discuss it here on the blog.

The DPS have done nothing wrong, they have terms of the scheme and with lack of response they will have given the Landlord your deposit, they would have given it to you if it was the Landlord not responding.

It does not really matter whether what people deny, it is what they can prove, which is why I tell Landlord after Landlord to include the PI in their pre-tenancy stages and get a signatures on the PI provided to the tenant(s), with two copies.

In the past I have seen claims successful within 12 years on the basis that the tenant was not aware within six years specifically because the Landlord did not protect the deposit.

Your case should be easier because the claim firm started the pre-claim practice direction and told the Landlord's Solicitors they had a claim.

They will bleat, but it will be for the Judge to decide, their lawyer may ask for a directions hearing to see if they can get it kicked out, that is no bad thing.

If you contact me via the forum I will help you take this forward, if she got £33k in rent then I suspect that there may have been more than one tenancy and so any sanction awarded will be per tenancy.

Our goal will be to reach a settlement but if they want to try their luck in Court then so be it, in fact I have a way you can bring the claim very cheaply to avoid the directions hearing, before I get a million tenant enquiries, this is because of the circumstances of your case as you have described above.

See post 757 above for how to contact me via forum.

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Liz 15th February, 2021 @ 10:42

Hi David
Ive sent you a response re problem 792 DPS returned deposit to landlady, dont know if you got it?
[ Computer problem!] Did you get it?
Thanks so much
Liz

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mr.spacemaker 17th February, 2021 @ 10:25

Asking for a friend!

Tenant is due to move out and currently owes approximately the same as the (protected deposit). He doesn't have enough wiggle room in his overdraft to send the rent payment and receive the deposit straight back, so he's asked if the deposit can be used to settle the arrears. Good relationship, no deductions for damages, landlord is keen to oblige if possible.

What would be the process for using the protected deposit to cover the current rent arrears?

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David 17th February, 2021 @ 10:56

@mr.spacemaker

If the tenancy is at it's end then the the Landlord simply asks the scheme to give him the deposit in lieu of rent arrears, that kicks off an email to the tenant who must agree to it. If tenant does not reply to scheme notification they usually release it quite quickly, two weeks if memory serves, but you need to look at the three sites to check.

If tenant does not agree then then there is a choice of Scheme ADR or Court.

If Deposit is not protected then my advice would be to protect it as soon as one becomes aware because no matter how late it is, it looks worse if it was never protected.

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James 19th February, 2021 @ 10:48

Hello, I've just found out that my deposit was protected on the exact day when I got a notice to end tennancy. How does this work. It was paid by my wife and tenancy was in her name pre 07 renewed pre 07 and every 6 months until we got divorced in 2010. I stayed as named tenant 2010, no monies changed hands, just a verbal agreement the deposit is in place and actually says on tenancy a deposit is protected in a scheme. some time in 2014 ish, the tenancy moved to periodic. Is the notice valid? I have rang all 3 schemes and they have no record of a deposit ever being protected prior to 2021.

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David 19th February, 2021 @ 17:18

@James

First thing to check is the notice period included in the S21, Government extended restrictions on evictions until the end of March 2020, so it should be 6 months notice but if it isn't do not worry, you can tell them the notice is invalid when the notice he has given expires (e.g. in 2 months if it has 2 months notice on it.) Of course he may hold off to see what happens at the end of March, I doubt it will return to 2 months overnight.

Your deposit claim is very old, normally it would run out after 6 years but I have seen cases where the Court approved 12 years because the claimant pointed out that the only reason that they were not aware of the legislation and deposit not being protected was because of the failure of the Landlord to protect the deposit in the first place. So that would be the first hurdle, but worth a shot, but probably only for the 2014 SPT.

I would be happy to review your evidence and draft you a letter to reach a settlement with the Landlord.

See post 757 above for how to contact me via forum, I am running a bit behind as I had pretty bad Covid infection, but there are some things you could be doing meantime so message me via the forum.

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James 19th February, 2021 @ 17:52

Hello David. Thank you for your response. I have been in touch with citizens advice. They informed me that the notice is valid, but, if the tenancy changed hands in 2010, then the deposit would have needed to be protected. As it was not, then any claims to deduct monies can be counterclaimed or can be individually sued against the landlord for breaching of s213-214 housing act.
I'd also like to know if any wear and tear claims are fair as been such a long time since the tenancy began?

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David 19th February, 2021 @ 21:42

@James

See post 757 above for how to contact me via forum.

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Simon 24th February, 2021 @ 14:14

Quick question: I previously had a joint AST with two friends. A single deposit amount for all of us was paid to the landlord, as stated in the AST, which then wasn't protected. One of the friends isn't bothered about making a claim - can the other two of us still claim for compensation based on the deposit amount as a whole, rather than just for 2/3 of it?

Thank you,
Simon

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David 24th February, 2021 @ 18:58

@Simon

There is case law and CPR that may hinder your claim, so it really depends on how the claim is brought and whether you and defendant have the funds to escalate it, I would seek a settlement.

No you can't bring a claim for the whole amount, well you can bring the claim but the Judge will very likely kick it out, if it even gets that far.

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Janie 24th February, 2021 @ 23:47

Hello David,

Can you please help with my mess.

A tenant and his partner moved into my property in March 2019 I asked for a months rent and a I think upfront but there was no bind stipulated in the tenancy agreement. The tenant who signed the contract left after a couple of months without our knowledge. The other tenant continued to live in the property and then informed us in the October that his girlfriend no longer lived there. He subsequently signed a new 12 month tenancy agreement in his name with again no deposit stipulated.

Skip forward 6 months and he was in arrears of over £2000. We put together a payment plan and allowed him to stay. He did not pay the arrears and unfortunately occurred more. His girlfriend then moved back in (although she is saying she doesn’t live there) and the rent but non of the arrears started to be paid.

In December he failed to pay his rent again and as was now on a periodic tenancy we decided letting want not for us anymore and decided to sell up. He originally said he didn’t blame us he would do the same and allowed the house to be valued.

However as soon as the property was advertised for sale and viewings arranged he has become resistant to leave and said he will want his deposit back and taking legal advice because it wasn’t put in a protection scheme.

Does he have a deposit with us? I haven’t put anything in a scheme because I didn’t think we had a deposit or is the fact that I asked for 2 months rent upfront classed as a deposit even if is not on a signed tenancy agreement? Also the first tenancy was signed by his girlfriend not him who says she doesn’t want anything to do with the it?

Many thanks in advance

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David 25th February, 2021 @ 11:34

@Janie

What a mess, I am sure you are pulling your hair out over this but let me break it down for you.

There are some facts that I would need to clarify, but it is best not to do this on an open blog platform, but for the sake of other Landlords let me provide a general answer.

In legal judgements you will find terms like "if it looks like a duck and quacks like a duck it is a duck" or "we have to call a spade a spade we can't call it a fork because we want to".

These mean that you can't pretend something is not a deposit just because you call it a different name, or say it is the last month's rent and all the other tricks that some unscrupulous landlords tried when deposit legislation first came out.

So if money is taken for the performance of a contract in the way a deposit is, then it is a deposit under the law.

However, there are a couple of financial structures that might give you the same (or better) security but definitely not be classed as a deposit.

However, in the situation you describe you might have not have to worry, I think it wise to take that aspect offline via the forum PM for me to confirm a few things.

At this point I would be suggesting Landlords have a "sanity check", when there has been a problem with the tenancy, don't go giving a tenant who just happens to live there a new tenancy because it is easy and quick. Say to them, "I need to put you through tenant referencing" and it if is not the most glowing report, give them a S21 and find new tenants.

However, you are where you are, so see post 757 above for how to contact me via forum and I will see if I can help you.

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roby 28th February, 2021 @ 16:47

Dear David,
thanks for your help.
I would like to understand more about the timing for the compensation claim.
I know the letting agent deposited the amount after nearly 60 days instead of 30 so I would like to claim compensation.
I am wondering when should I inform them about the proposed claim: once the tenancy is over but before the deposit will be refunded (within 10 days) or once the deposit will be back I claim the 3x compensation?
If will be a problem about not agreed deductions from deposit, should I first resolve this matter with the deposit scheme provider or can I do 2 parallel claims, one for 3x compensation and one for refund of partial deposit?
Thanks

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David 1st March, 2021 @ 10:46

@Roby

I strongly advise AGAINST raising any sort of claim BEFORE you leave the property, you have up to 6 years to bring claim (some possibly have 12 years although probably not yours). In my experience when a Landlord sees such a claim they find all sorts of new damages, the cooker suddenly does not work, the washing machine too and you have damaged the carpets etc. etc.

There is a prescribed procedure for claiming, it is not that difficult once you know it but get it wrong and the defendant can have your case thrown out, you lose your fee and have to start again.

You have not yet determined that the agent is culpable under the law or case law, nor the Landlord.

The Deposit Protection legislation and the laws that amended it (plus subsequent case laws) are not a get out of jail free card for damages or arrears, the deposit is taken for the performance of the contract.

You suggest that there will be deductions, the Landlord will be able to put in a claim at the DPS/TDS/Mydeposits, that is entirely separate from your claim, they may be over the top in their claims and that is what might have set you down the road for a claim. Deductions cannot be applied to "fair wear and tear", your deposit is not a redecoration fund. There should have been an inventory at the beginning and at the end. I always advise all parties to take video and photo evidence at both.

Deposit Protection failures are NOT handled by the schemes, they must go to Court or be settled directly with the culpable party.

Your claim is not compensation, it is a sanction and statutory penalty, based on the minor infringement of it being just a month, the level of culpability might be just a month, but there may be other failures which take it nearer 2x or even 3x.

I am happy to evaluate your evidence, help you prepare your case, but at the same time seek a settlement, which would be the best outcome for all parties. The wording needs to be done in such a way that it does not damage your claim potential and at the same time be seen to be serious. If upon seeing your evidence I determine that they are being unreasonable about the deductions I may advise factoring them into any claim, but again it is about timing.

I am wary of discussing detail on a public forum, so see post 757 above for how to contact me via forum and I can help you seek a mutually agreeable settlement.

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Gary 1st March, 2021 @ 20:36

Hi i have had the same tenant in for 12 years but i need my property back as i need to sell it, i started with a basic tenancy agreement and let this roll into a rolling agreement. But i have come up short in other areas(deposit) and wish to talk to a experts regarding my situation and get professional advice on how to resolve my issues

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David 1st March, 2021 @ 23:34

@Gary

To your tenant, your property will be their home of long standing. They may have a family who are in local schools or other connections to the community.

Right now in this Pandemic unless there is a year of arrears and/or anti social behaviour you are looking at 6 months notice and potentially 6 to 8 months after that to get a Court date.

Keep it friendly, do not do things via email but ask to see them, maybe buy them a coffee, you could tell them you are going to sell and offer them first dibs on the property, if they can raise a mortgage.

If they are not interested in buying, then ask them if they would prefer to move or wait to see what the new landlord is like.

You could reach a settlement that includes the potential deposit sanctions, you would need to speak to a local agent to determine what the price difference would be of selling it with a sitting tenant vs with vacant possession. I suspect after 12 years it will require some decorating and staging so any price difference may be eaten up.

I have it on good authority that the Stamp Duty deal is going to stay until June (but who knows if that will be pulled) and I can't see the limits on evictions changing much before then, maybe a few concessions, but the time to get a hearing will not change for ages.

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Gary 2nd March, 2021 @ 04:55

Hi David

Firstly and for most thank you for your time in replying.

Yes i understand that it is there home in there eyes and sympathy with that.

I see the biggest issue being the cheap rent they have enjoyed as it is only 700 mouth compared to the market rate off 1100. I've never been greedy as my total bill for property is only 250 after all bills n taxes.

My tenancy agreement was with him all them years ago and he has since got married and has two little boys and i understand that kids cost so i left everything as it was.

If im setting to move them out would it be wise to do a new update contract with her on it as well or keep it between myself and him only and update the contract again with a opt out claus(ps ive also just purchased your recommended contract anyway)

Kind regards

Gary

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Gary 2nd March, 2021 @ 06:31

Hi David

Firstly and for most thank you for your time in replying.

Yes i understand that it is there home in there eyes and sympathy with that.

I see the biggest issue being the cheap rent they have enjoyed as it is only 700 mouth compared to the market rate off 1100. I've never been greedy as my total bill for property is only 250 after all bills n taxes.

My tenancy agreement was with him only all them years ago and he has since got married and has two little boys and i understand that kids cost so i left everything as it was.

If im setting to move them out would it be wise to do a new update contract with her on it as well or keep it between myself and him only and update the contract again with a opt out claus(ps ive also just purchased your recommended contract anyway)

Kind regards

Gary

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David 2nd March, 2021 @ 10:32

@Gary

You need to protect the deposit as soon as you become aware of the failure, failure to do this may affect mitigation in a Court. You cannot issue a S21 until this fault is rectified, along with Gas Safety, EPC and you will need to give them the latest version of the Government How to Rent document.

You have dug yourself into a common hole, whilst it has been very kind of you to keep rent low it will make it very difficult for them to move from your low rent to market rent.

The only way they might manage financially in the same area is if they get into social housing which is as rare as rocking horse dung or for them to move to a cheaper area which generally means moving to out of commuting distance.

If they leave of their own accord the Council will deem that they made themselves homeless and some Councils still insist that tenants wait until they are evicted by Court order rather than when the S21 notice expires.

So I would have a chat with them, let them know that they have rights to be housed if homeless as they have kids but the Council will try to put them off, tell them to seek property in the private sector etc.

They may have to move into a temporary accommodation facility provided by the Council, they will then bid on properties on the housing list and be housed according to their priority vs other families in the area. They will have a few days each week to evaluate properties. At the best of times they may not get more than an outside picture (this is no Rightmove or Zoopla). Due to the Pandemic some Councils are not even doing the front of the property. So tenants have to use the postcode and various online sites to figure out the area, schools, crime, antisocial behaviour etc.

It is not a great journey but the destination of social rents gives them a tenancy that is far more secure the the usual 2 months.

S8 can be used if you were seeking to move back into the property and had the appropriate clause in your previous tenancy agreement that indicated this was an option that may happen. This is not a mandatory ground so the Judge will consider all parties, more information on S8 ground are on the page below

https://www.propertyinvestmentproject.co.uk/blog/section-8-evicting-tenants/#grounds

I should make you aware that the Government has said it will be scrapping S21 and improving S8, so use it before you lose it.

I would have the chat, issue S21 explaining that it is a 6 month notice due to the pandemic and it may take longer a year by the time they go to Court due to pandemic.

The details of Covid aspects are below, the page has a link to the 6A S21 form, make sure you comply with all the prerequisites listed therein or the notice will be invalid.

https://www.gov.uk/government/publications/covid-19-and-renting-guidance-for-landlords-tenants-and-local-authorities/technical-guidance-on-eviction-notices

Inform the Tenant that you may issue another notice to replace this notice if the Government reduces the 6 month limit back to 2 months in the next three to Four months.

The most important thing if you want to reach a settlement on the deposit is to be open and communicate with the tenant. Remember that people need a nights sleep to digest bad news.

When you issue the S21 have two copies and get the tenant to sign a copy.

Signing them up to a new tenancy will be substantially different and may complicate deposit issues, plus give them more rights. If you do sign them both onto a new tenancy make sure that it is a contractual periodic so that although it has a fixed term it never expires until it is terminated after the initial fixed term has passed.

Do not think that a new tenancy will be a get out of jail free card for the failure to protect the deposit on the current tenancy. The tenant will be asked about their tenancy history by the local Council and encouraged to take action. So get it protected TODAY if not done already and then seek a settlement with the tenant, the minimum you would be liable for in Court is 1x the deposit for each tenancy.

Another thing to watch out for because of the age of your tenancy is the ratio of your deposit to the rent, it must not exceed 5 weeks rent (£807) under Tenant Fees Act (2019), again this affects the validity of the S21. So refund any difference and protect the rest.

One other thing to consider is a rent increase, so you have the chat, you explain that your circumstances have changed substantially due to pandemic so you must increase rent in line with market value and must sell the property to deal with your financial issues.

You explain to them that they are a valued tenant and you want to do right by them so you want to work out an agreement where you lessen the impact of this. Explain that in 2019 the Tenant Fees Act came into force and in 2020 it was applied retrospectively to existing tenancies. So you will be refunding the difference and also putting the deposit in the deposit protection scheme and because you protected it late you want to agree a settlement of 2x the deposit as a credit to their rent account with you.

So your proposal is to increase the rent to £975 (which is still low compared to the £1100 market value) but to give them a settlement of 2x the deposit as a credit against the increase over the next X months. To calculate X you divide the two times the deposit settlement by the difference in Rent (£275), e.g. if deposit was £1000 the settlement would be £2000, then 2000/275=7.27 months, so rent will not cost them any more for 7 months plus you will refund the different of deposit £1000 and 5 weeks rent so a further £200.

It is important to refund them the difference in deposit as a payment and pay it via a method such as bank transfer. One could say the same for the deposit settlement but this can be documented in a settlement agreement.

The increase to £975 will increase the sale value of the property for investment purposes and this is likely to be the kind of buyer you want.

This page explains the rent increase form

https://www.propertyinvestmentproject.co.uk/blog/notice-of-rent-increase-form/

You may decide that the rent increase delays your need to sell, issuing the S21 (having first complied with or rectified failures) will keep your options open.

You could increase to your stated £1100 market rent but that would likely see the tenant advised to refer to the tribunal.

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roby 2nd March, 2021 @ 12:30

@ David,

many thanks for your answer.

Once I will give the notice I will be in contact with you privately for your kind help.

Many thanks and kind regards

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Gary 2nd March, 2021 @ 19:17

Hi David

Once again im blown away with the quality of advice you are providing and am so grateful.

Lucky for me the deposit is the only issue ive left myself facing.

Im not looking for the new tenancy agreement to get me out of jail as i understand im bang to rights at the moment.
As my deposit was only 700 im inclined to just settle for the full amount.
But what im after with the new agreement is to have a up to date agreement that covers all aspects of our job but lets me proceed to reclaiming my property with the least stress for me. If you have any recommendations regarding a professional that can advise on this id be greatfull.

After a chat with a estate agent today im am favouring selling the property with them so as to provide them with a home still and to save on the issue that would arise and time wasted off such. Would you have any recommendations or advice on doing this estate agents that specialise in this please

Id just like to finish on how amazed i am with your time you put into this.

Thank you

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