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?) and I’d probably hit a landlord on the head that’s either been through it, going through it, or will eventually go through it: threatened with legal action for failing to comply with the tenancy deposit legislation!

So, what to do if you’re being threatened? Let’s talk about it…

Rightly or wrongly so, landlords are 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 innocent 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!

Celebrating tenancy deposits

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

323 Comments- Join The Conversation...

Showing 273 - 323 comments (out of 323)
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David 24th October, 2018 @ 10:04

@Benji

You may be correct, you need to get a lot of things right.

I get particular enjoyment from beating claims companies, their sole goal is to add costs but I pretty much have them before they get started these days.

They are the jackals, they take 35% of the claim and try to hit Landlords for thousands in costs for what is mostly cookie cutter law.

A lot of small firms are doing this badly and your typical housing lawyer will just suggest to cave in and settle. So Landlords need to know how to frame their case too.

The other thing that tenants need to bear in mind is that many a Judge has been a Landlord, so you have to be able to show the gravity, having said that 4 years of non protection for a Landlord with numerous properties is going to be hard to defend.

As always it all depends on the Judge you get on the day.

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ray trueman 27th October, 2018 @ 14:29

i Have just received a letter from a no win no fee solicitor making a claim for my old tenant as i didn't protect the deposit they are claiming 6 times the deposit 3 for the first tenancy then 3 for the periodic thats £3300.
The deposit was £550 and when the tenant moved out i needed to clean the house and get the gardens done we agreed i kept £100 the tenant sent me a text saying

"moneys gone in ill except it without prejudice, however the money isn't mine its my mama and she requires documentation from the bond protection scheme proving the release of the money and how the final figure was reached for her own tax purposes"

i have wrote the negotiating response 1 letter above and have delivered it to the tenant and his solicitor i have offered him his £100 back as a good will gesture is his statement in the text accepting the outcome of our previous negotiations and admitting it was his mum that was wanting information enough for the court to see that the matter was resolved or will i be going to court any help will be greatly appreciated

Ray

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David 27th October, 2018 @ 17:18

@ray trueman

The letter above will probably only work with a tenant that writes you a letter of claim before they contact the no win no fee Solicitor

It depends on the firm, but most lock the tenant in so that if they back out the tenant pays their fees, also I am certain they probably told you not to contact the tenant direct.

Once it gets to a claim company or a Solicitor we have a different response.

As you have a live case and have used your name I suggest you contact me via the forum. Once you register, you can click on this link to private message me: http://bit.ly/davidpip

Do not reply further here as your tenant may well come across this page, use the private messaging of the forum.

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Innocent landlord 28th October, 2018 @ 14:06

Hi David, you've gave me AWESOME advice so far regarding an uninsured deposit due to my husband's heart condition. We've heard today our problem tenant has finally left our property, and through lots of work, said she wants to.....

To avoid any further unpleasantness, I would like to take this opportunity to say that I do not wish to continue with any legal proceedings against you both and I hope you are in agreement with this and as such would appreciate a response to this email by 12:00 on 30th October 2018.

What do I need from her to have it 100% that she will never make a claim for the uninsured deposit. The deposit has been returned to her and we just need to inspect the room.

If you can let us know how we can finally end this stressful time then thank you very much.

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David 28th October, 2018 @ 18:32

@Innocent landlord

This is great news, I have replied to you directly to give you the options.

I am so pleased to have been of help.

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Levi 5th November, 2018 @ 18:06

I am a Landlord who just has to pay 2 x my Tenants deposit for being 4 months late... My own fault, burns like hell, wouldn't be making that mistake again. I think I should of settled it earlier tbf.

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David 5th November, 2018 @ 19:34

@Levi

That is a mature and realistic attitude.

It is a shame you did not find this site earlier as I might have got you 1x or less in a settlement.

I tell clients to consider it a learning experience and average it out over the life of the investment as you might a new Boiler, get that wrong and you might pay twice.

What is eye watering is when Landlords have taken huge deposits, but that will be coming to an end when the 6 week maximum deposit comes in as part of the Tenant Fees Bill.

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Zoe 12th November, 2018 @ 17:29

Hi David, I am wondering if you can advise me. A tenant rented our one bedroom flat for about 9 months. They always paid the rent on time. We sorted any problems as quickly as possible. They left the flat in good condition. We gave the full deposit back within 2 weeks. I even have messages from them thanking us for being good landlords and saying that they had been very happy in the property! We are not rouge landlords. Our relations were all good. However, we did not protect the deposit or send the prescribed information.

We have now been contacted by a no win no fee comapany acting on their behalf. It is clear that this tenant is just looking for a nice easy payout, but of course we understand that we are at fault and must pay a penalty. They are asking for an out of court settlement of about 4 x the deposit. We have 4 young children and live in a rented property. My husband has post traumatic stress disorder and has now been signed off as unfit for work by the doctor. Our credit cards have been frozen as we could not make the monthly payments in our financial situation. We have no means by which to pay this amount of money.

Can you advise me how to negotiate a smaller sum and more importantly, an installment plan to repay it as we are unemployed and struggling with mental health problems and serious financial difficulties.Your advice would be very much appreciated.

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David 12th November, 2018 @ 18:50

Hi Zoe

I would be happy to help you with this.

Should be able to get this down to 1x the deposit or less.

Any Tenants reading this page, never start with a claims company, you will always get less! They are the last resort

Zoe as your case is live please contact me via the forum, see post 275 for details how to PM me.

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DannyBoy 24th November, 2018 @ 22:53

Can anyone HELP me please,

I rented out my apartment on AST, which turned into SPT, I received a telephone call from my tenant saying hes gone back to EU with GF, not coming back, I told him to email me a notice to quit he never has.

In order to secure the property and take off the market he paid security deposit, I gave him a receipt etc.

I DID NOT KNOW TO REGISTER IT !!!!

I did not hear from for several months and thought the matter closed.

Yesterday, no win no fee solicitor sent me a letter chasing details of deposit scheme.

I did not register the deposit until several months after the tenant left i know ignorance is no excuse, i just didn't know until tenant started emailing me last week.

would I have to pay in full there and then in court, or few weeks or would they allow arrangement to pay ?, does anyone know please.

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mr.spacemaker 28th November, 2018 @ 13:01

@david

Hi David, hope you're well! I sent you a personal message but got a spam dating message back! Have you been hacked?

Kind regards,

Brian.

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David 28th November, 2018 @ 13:59

Hi Brian

No idea what happened there

I sent you a PM directly

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Jonathan 15th December, 2018 @ 17:41

David

I would appreciate a quick response as I need to submit my response to Court ASAP
I am a landlord. more than a year ago I have accepted a tenant that does not have money to rent the flat and he offered me to add a guarantor to the contract. I agreed and accepted him.
I forgot to protect his deposit because of extreme personal circumstances at my end.
I gave him back the deposit in full 9 days after he left and purely believed that we had a great relationship- I wrote him a great reference.
A day after he received the refernce he send me a letter before claim. I called him and he ignored me told me he wants 3 time the deposit as a penalty.
i sent him a letter and offerred to settle, but he sent me a response full with lies about my conduuct as a Landlord and thus he is going to sue me for 3 time the deposit - I was shocked!!!! .a day after he served the claim to court.
he served me the claim only a few days ago.
How can I defend the claim? I beleive I treated him fairly and because he does not work I see it purely as a way to gain money.
He also invented in his claim that I have not protected the previous tenant - should I attach document showing it is nonesense or is it completely irrelevant.

Thank you

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David 16th December, 2018 @ 00:33

@Jonathan

It is not just about filing a defence or a copy of specific documents, you need to structure your Statement of Truth and bundle properly.

The good news is that if you catch him in a lie the Judge will likely not believe anything but the facts proved by evidence and it will sway them towards you.

I am happy to help but we need to act quickly.

As you have a live and urgent case I think it is best for you to contact me via the forum private message system. Once you register, you can click on this link to private message me: http://bit.ly/davidpip

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Constantin 4th February, 2019 @ 18:46

Similar situation for us, been letting our previous family house to the same couple for 3 years, we have not protected the deposit and now got letter from solicitors threatening foe 3x1300 and then x 3 again 11700£
Tenants had the deposit back in full 2 days after moving out.
Currently they are looking to settle at 1300 x 3
Is it better this way? Still going to cost us 4500£ with the legal fees

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David 4th February, 2019 @ 18:51

@Constantin

£11700 is 9x the deposit which would suggest three tenancies.

Best not to discuss live case on public blog.

Please contact me via Forum (see post above) and we will get that down.

The legal fees will depend on how far it has gone, we can discuss that too.

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Constantin 4th February, 2019 @ 20:17

Done all that, how do I send you messages?

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David 4th February, 2019 @ 20:24

@Constantine

If you have followed the procedure in post 286

Then when you can see my profile the last menu option on the left is

Actions
Send personal message

If you can't see that you probably did not follow all the procedure in post 286.

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Constantin 4th February, 2019 @ 20:40

Sorted, check if you got message

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Sophie 21st February, 2019 @ 13:07

Hi! I couldn’t find a relevant blog post so please could you reccommend which tenancy deposit scheme you would choose? Ideally I would go with the free one (DPS?) but it has some awful reviews online.
Hope you can help!
Sophie

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David 21st February, 2019 @ 19:59

@Sophie

I deal with a lot of Landlord and Tenant clients on legal aspects of deposit protection.

I think that the most important thing for Landlords is that they put it in a Custodial scheme in their name and not allow an agent to to protect it in agent name and with their scheme as many bad agents overlook expiry leaving the Landlord liable to sanctions of up to 3x the deposit per tenancy. Such agents have a habit of creating new tenancies every 6 months to gain a fee, luckily such fees will soon become illegal.

One thing to be aware of is that once you protect the deposit you can only get it back after tenant has not made a claim on it and in come cases where wrongly protected for 6 months.

As you say DPS is free, their biggest problem in my experience is that they are terrible at responding to messages and contact attempts, the front line are not suitably trained and the 2nd or 3rd level never call you back. That is only my experience, but when I bitch about them others say they had the same experience. I have no reason to believe the other companies are any better or worse.

Do not assume the the paperwork these companies provide meets the requirements of the prescribed information legislation, do it yourself and get a signature.

People tend to leave negative reviews because they are pissed off but less often because they had a really great experience. Few of the review sites verify every customer who leaves a review, positive or negative.

The worst I have seen is the deposit protection company holding on to the deposit because of lack of activity by the tenant.

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Chloe 9th March, 2019 @ 20:55

I have rented a property of mine to a lettings company as a 'rent-to-rent' (they take a management agreement from me and pay the rent to me, and then let the rooms to tenants themselves) - I've just come across this forum and am concerned that I've never heard anything from them re: registering deposits for their tenants in the house - who would be liable in this case please? Will it be me as the landlord? Or will it be them as effectively the tenant under the management agreement? Any input massively appreciated to put my mind at rest! Thank you.

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David 9th March, 2019 @ 21:25

@Chloe

Ultimately if your name is on the deed at the Land Registry you are liable to anyone you issue an Assured Shorthold Tenancy to or an agent of yours issues one to. If they issue a licence it will be deemed as an AST under case law.

Unless the company is a person who you issued an AST to and who lives in with the occupants and they gave them lodger agreements, YOU are liable.

If your agreement with this company says that they will carry out all of your legal responsibilities then you have a potential action against them for sanctions and legal costs, but you are still liable first to anyone deemed a tenant under the Law. I have got money out of such companies in settlement with Landlords in the past who have been pursued.

I would really need to see a copy of the terms of the agreement and maybe their website, I would strongly suggest you do NOT put them here but contact me via the private message of the forum. Once you register, you can click on this link to private message me: http://bit.ly/davidpip

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Chloe 9th March, 2019 @ 21:38

Thanks for such a quick response David! I didn't expect one so fast. I asked them to send me the AST's of the people in the house so I know who they are, which they do when somebody new moves in. They're issuing the AST's as the party's being themselves and the tenant - not my name on the tenancy at all. Would responsibility ultimately still fall on me? They've not said anything about taking on legal obligations in their agreement I have with them.

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David 9th March, 2019 @ 21:41

@Chloe

It is likely you are liable, but I would need to see the agreement, no point saying it must say this or that or the other when there could be 100 clauses.

Contact me via the forum please.

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Chloe 9th March, 2019 @ 21:55

Thanks again David. I've PM'd you and copy/pasted the agreement there for you to see. Thanks again.

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Delpo 12th March, 2019 @ 11:24

Hi David,

My partner and I are hoping to break a tenancy agreement early (with no break clause, I know, we have no right to, but the flat is awful with no soundproofing and it's genuinely affecting our mental and physical health). In order to do so, the landlord is insisting on using our deposit to fix some accidental flooding damage my partner did a while back. This is completely fair and we were totally expecting it. However, when we went to check our emails, we realised when we first moved in he never sent us our Tenancy Deposit Certificate, and we can't find it on any of the schemes. We've currently been in the flat for five months and have a 12 month contract.

He also wants us to use an expensive letting agent to find new tenants (it would be around £1450), whereas we were prepared to do the work ourselves.

Could you please advise? Do we have a case re the deposit? Are we also obliged to use the letting agents of his choice? We know he doesn't have to let us leave at all, but is it worth asking if we could find new tenants ourselves (and of course pay for a background check)?

Thanks.

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David 12th March, 2019 @ 16:15

Delpo

Have a read if this article

https://www.propertyinvestmentproject.co.uk/blog/your-tenant-wants-leave-early/

You obligation will partly depend on what your agreement says, if you contact me via the Forum I can give you means to send me a copy.

The price seems excessive as a cost to replace a tenant using OpenRent and then a decent Tenant Referencing Service.

Also it would be a good idea to call three local agents and ask them their price to simply find vetted tenants.

I can also help you construct a letter to get a more reasonable proposal.

From what you have said so far you definitely have a claim.

Contact me via the forum using instructions in post 295 above.

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Angelika 5th April, 2019 @ 04:13

We used to rent the house for almost 8 years.
We have paid deposit. I find out that landlord hasn't protected it. I can't find my landlord in landlord's register as well.
Last year we had many problems regarding our renting house. All those years he hasn't done any decoration - improving the house condition.
We informed our landlord about the problems, instead of doing repairs he gave us S21.
What should I have to do? I have 2 children under 16 and we really do not want to move out.
Your advice would be very much appreciated.
Thank you.

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David 5th April, 2019 @ 09:01

@Angelika

There is a big difference between redecoration vs repairs, we also have new legislation regarding mould etc.

The Section 21 is invalid but there is no need to inform the Landlord of that just now, let it run and I will help you negotiate a solution, hopefully allowing you to stay.

I have some clients who have delayed moving by 18 months and a few that have remained in their property but it is always going to depend on the type of Landlord you have.

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Landlord 27th April, 2019 @ 18:11

Hi,

David I wondered if you could help.

I am a landlord. My tenants have just moved out after 2 years and i have received a no win no fee solicitor letter. I protected the deposit in time with DPS and sent most of the prescribed information, however I forgot to send the custodial terms and conditions.

Does this company have a case? terms and conditions are not mentioned in the text of the law

thanks

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David 27th April, 2019 @ 18:59

@Landlord

If things are as you say then I have an answer for you but best I do not publish it as it would prevent others being able to use it.

The terns and conditions most certainly ARE mentioned in the Law, there are actually 4 bits of legislation plus numerous case laws that have effect.

In S213

5)A landlord who has received such a tenancy deposit must give the tenant and any relevant person such information relating to—

(a) the authorised scheme applying to the deposit,

(b) compliance by the landlord with the initial requirements of the scheme in relation to the deposit, and

(c) the operation of provisions of this Chapter in relation to the deposit,

as may be prescribed.

(6)The information required by subsection (5) must be given to the tenant and any relevant person—

(a)in the prescribed form or in a form substantially to the same effect, and

(b)within the period of 30 days beginning with the date on which the deposit is received by the landlord

THE PRESCRIBED INFORMATION IS FURTHER DEFINED BELOW,

Prescribed information relating to tenancy deposits

2.—(1) The following is prescribed information for the purposes of section 213(5) of the Housing Act 2004 (“the Act”)—

(a)the name, address, telephone number, e-mail address and any fax number of the scheme administrator(1) of the authorised tenancy deposit scheme(2) applying to the deposit;

(b) any information contained in a leaflet supplied by the scheme administrator to the landlord which explains the operation of the provisions contained in sections 212 to 215 of, and Schedule 10 to, the Act(3);

(c) the procedures that apply under the scheme by which an amount in respect of a deposit may be paid or repaid to the tenant at the end of the shorthold tenancy(4) (“the tenancy”);

(d) the procedures that apply under the scheme where either the landlord or the tenant is not contactable at the end of the tenancy;

(e)the procedures that apply under the scheme where the landlord and the tenant dispute the amount to be paid or repaid to the tenant in respect of the deposit;

(f)the facilities available under the scheme for enabling a dispute relating to the deposit to be resolved without recourse to litigation; and

(g)the following information in connection with the tenancy in respect of which the deposit has been paid—

(i)the amount of the deposit paid;
(ii)the address of the property to which the tenancy relates;
(iii)the name, address, telephone number, and any e-mail address or fax number of the landlord;
(iv)the name, address, telephone number, and any e-mail address or fax number of the tenant, including such details that should be used by the landlord or scheme administrator for the purpose of contacting the tenant at the end of the tenancy;
(v)the name, address, telephone number and any e-mail address or fax number of any relevant person;
(vi)the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy; and
(vii)confirmation (in the form of a certificate signed by the landlord) that—
(aa)the information he provides under this sub-paragraph is accurate to the best of his knowledge and belief; and
(bb)he has given the tenant the opportunity to sign any document containing the information provided by the landlord under this article by way of confirmation that the information is accurate to the best of his knowledge and belief.
(2) For the purposes of paragraph (1)(d), the reference to a landlord or a tenant who is not contactable includes a landlord or tenant whose whereabouts are known, but who is failing to respond to communications in respect of the deposit.

(1)For the meaning of “the scheme administrator” see section 212(3) of the Act.
(2)For the meaning of “tenancy deposit scheme” see section 212(2) of the Act.
(3)For amendments to Schedule 10 to the Act, see the Housing (Tenancy Deposit Schemes) Order 2007 (S.I. No. 2007/796).
(4)By section 212(8) of the Act “shorthold tenancy” means an assured shorthold tenancy within the meaning of Chapter 2 of Part 1 of the Housing Act 1988 (c. 50).

As you have a live and urgent case I think it is best for you to contact me via the forum private message system.

Click where is says Landlord forum at top of page or visit

https://www.landlordforumproject.co.uk

Once you register on that forum and have confirmed your email

you can click on this link to private message me:

http://bit.ly/davidpip

It will be at the bottom of left menu.

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Tenant 30th April, 2019 @ 15:37

Hi,

Moved out of a hmo around 6 weeks ago and issued correspondence to the landlord regarding them failing their obligations to protect deposit. I have see out clearly all obligations and how they have not been met (using a shelter template as an aid) and landlord has played it on dumb and has now stopped responding. Landlord returned deposit but has refused to acknowledge compensation.

Landlord is operating an unlicensed HMO and has been in trouble with the council as she attempted to serve notice without reason and in an improper way (to a previous tenant). Landlord has no regard for communicating that they will enter the property and often just turns up and has sent workmen around with no prior notice. Promised new carpets and Improvements when moving in which where unfulfilled when I left. All in all landlord is not fulfilling her duties and milking the property for rent which is why I have moved out.

After my attempts to explain the matter clearly the correspondence has dried up and I'm now about to issue a letter before action.

I am wondering if there is a minimum period in which a letter before action has to be issued.

I've always paid rent on time, left the place spotless and are pursuing the proper process of making a claim.

I am wondering if there are any loopholes or caveats that she could use to get out of the situation (ie letter before action sent after 6 weeks) or improve her position if it goes to court.

Thanks

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David 30th April, 2019 @ 19:21

@Tenant

There are all sorts of ways Landlords can avoid or mitigate the sanction.

The letter before action needs to be compliant with Pre-Action Conduct under CPR.

I would include that you would like to seek a settlement to avoid them having to pay both your and their legal fees.

Also mention that you are prepared to enter mediation if they wish, but if they will not reply then they leave you no choice but to issue proceedings without further notice.

Give them at least 2 weeks to respond, have the letter of claim served by recorded delivery and email a day later.

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Lucy 7th May, 2019 @ 17:45

Looking for advise please, lots of very helpful comments from all members and advise from @ David

Brief history
Family friend in financial difficulties, let to to help get back on feet... bad move
.
Tenant have instructed no win no fee solicitor to act in deposit claim as deposit was not insured within 30 days. Was actually not paid in full but oversight that it had to be done from day 1 even if paid in small instalments.

Fast forward a few moths lots of issues at the property, drugs, police etc rent arrears, unauthorised pets, redecorates without concent in battleship grey and daily maintenance complaints. Property was in good order and council have visited and confirmed so. Suspect it was an attempt to avoid eviction.

Anyway,
I understand wrong has been done in non insurance of deposit from day one but what is the best way to tackle this?

Refund deposit and make a counter offer?

I want to get this sorted as soon as possible and serve notice.

Lesson learned ... don’t rent to friends or relatives

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David 7th May, 2019 @ 18:18

@Lucy

It goes without saying that NEVER let to friends, work colleagues or anyone other than Tenants you have referenced.

Lesson 2 is never take a deposit in instalments, not only is it messy but if they can't afford a deposit and the appropriate advanced rent then they are not likely to be good tenants

The way forward is going to depend on the relationship you have with the tenant, some shut down comms making it very hard to deal with. We can't deal with the tenant directly about the deposit claim as the claim firm would have advised you but we can deal with them about all the other matters that are usual with a tenancy.

I would be pleased to look over the letter and other evidence, it is premature to instruct a claims firm before they leave because under the terms of your agreement it will almost certainly say that the deposit will be repaid after you leave and with deductions for damages, arrears etc.

Many people mistake the clauses that say the Landlord will return the deposit to mean that they have lost the rights agreed to in the contract, this is not the case.

I would urge you NOT to return the deposit until you have determined whether there will be a counter claim for damages etc

The fact is that most claims companies operate on a conditional fee basis (aka no win no fee), they are owned by insurance companies who instruct a panel of solicitors, these solicitors do a very specific amount of work. It is very rare that they take on defence for damages or arrears, without more money. So unless they are instructed by the tenant directly and the tenant has the funds to bankroll a damages/arrears claim (usual upfront payment of £2k to £3k), then they may withdraw. It all depends on how it is handled.

I would not suggest you go into too much detail here because they may well come across it and that might prejudice your case.

Instead I suggest you follow the instructions in post 304 and contact me via the forum.

I will then look over your case and help you resolve this, I have dealt with most claims companies and their panels of solicitors.

Needless to say any claim for damages or arrears needs to be supported by evidence.

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Lucy 8th May, 2019 @ 08:06

Dear David

Thankyou so much for your quick and helpful response, I shall head straight over to the forum and direct message you.

Thanks again

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Grumpy 18th May, 2019 @ 17:41

Hi David,

Having read your advice on here regularly I have a question I was hoping you could shed some light on

We have some new tenants wanting to sign for a place stating 2nd July.
They are mainly overseas students.

Two of them WANT to pay 6 months rent in advance. In addition they will agree to pay a 1 month deposit.

The question is it seems a bit of a grey area whether this would count as a deposit (hence the need for DPS) or not.

Personally I’d avoid the risk but would appreciate a more informed opinion?

Kind regards

Grumpy

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David 18th May, 2019 @ 18:01

@Grumpy

There is no grey Area as long as it is defined; you are taking a 6 months rent and 1 month deposit, what matters is your tenancy agreement properly states that the rent is MONTHLY, that the tenants agree to PrePay 6 months rent and that in addition to this they will pay a deposit of X which will be protected in accordance with S213 of the Housing Act.

I would strongly advise you to take six weeks deposit, these kinds of tenancy can be troublesome and as foreign students it costs more to go after them if there are problems.

I would also seek evidence of enrolment into the places where each of them will be studying and what courses they are on. This is to stop you getting a bunch of drug dealers, Pimps or sub-letters who have cash to pay upfront but will be using it for nefarious purposes.

Call the places of study and confirm whatever the paperwork says, i.e. they are on roll studying this year, you need a signed letter from the tenants giving their consent to you making such enquiries. If not mainstream universities I would also make sure the places of study properly exist, google the address and look at streetview.

I suggest you take the deposit first and protect it so that by the time they sign the agreement you can include the certificate of the deposit protection, along with the PI and the terms of the scheme. Get them to sign a copy of those documents so your evidence of protection is Rock Solid.

As long as your tenancy agreement is constructed properly with rent period being monthly (albeit pre-paid) you will be fine, if not you will make it look as if your payment period is six monthly and if the tenancy goes SPT you will have to give a longer notice period.

In times gone by people used to try and avoid the deposit protection by taking the last month's rent upfront and so on, they got hammered because anything that looks like a duck and quacks like a duck is a duck!

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Grumpy 18th May, 2019 @ 18:29

Thanks david,
I appreciate your input. What you say makes sense but on the other hand the RLA think there is still too much uncertainty and seem think there is still considerable risk. Personally I don’t know, and want to avoid the risk.

https://www.rla.org.uk/landlord/guides/do-you-need-to-protect-advance-payments-of-rent-as-tenancy-deposits.shtml
I think will just take the deposit as normal via Openrent.

We have referenced them for guarantors but as is normal, students always “fail” and then being overseas parents the referencing always “ fails”. We use Openrent for all this who have been excellent for a few years and many tenancies. It works great for both landlords and tenants. Their website has some great explanations and videos that the tenants find very useful.

As for paperwork, thanks for the advice. We are currently Checking out the places of study.

We currently have about 30 pages of check in documents with signatures for every fire alarm tested, EPC received, right to rent document read and understood etc etc. Many hours for every property.

Thanks for your input on this blog, a most excellent addition to an excellent blog 👍
Many thanks
Grumpy

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David 19th May, 2019 @ 10:05

@Grumpy

Thanks for kind words!

The RLA are essentially confirming my advice, take and protect the deposit separately so there can be no doubt, but I would add that to define things explicitly in the tenancy is as important.

Johnson v Old is an old case from the days when you had to serve your notices on a given day with the wind blowing SSW and part of the appeal was about the tenant’s eviction.

The problem with Case Law is that once set a County Court has to follow it IF Counsel can put a case to the Judge that the case they are hearing is the same issue. Then it is all down to interpretation, even then most Judges do not like to be overturned on appeal so many will play it safe and let someone pay to take it to a Higher Court if they object. Most tenants would probably get batted down at the Circuit Court, but if the case was significant and tenant represented by the right firm or supported by the right Charity, then the case could be brought for judicial review. There would have to be a credible argument that it was significantly different.

The ambiguity here is how the lease was constructed and how the Appeal was interpreted.

In the cases I have fought It is exactly as I have said

1. It is very important that your tenancy agreement clearly defines what is what (Rent and Deposit)

2. Anything that looks like a duck and quacks like a duck is a duck!

I have never had that case used against me in handful of cases that I remember well of a Tenant prepaying 6 months’ rent but I feel they were different.

If you take a look at that case you quote you will see that the issue was with how the tenancy was constructed as a whole, they had to say that because the tenancy was a dog’s dinner with clauses that were contrary to each other.

For example in the original hearing the Judge noted:

"I have come to the clear view that this was in fact, this payment of rent in advance when the agreement only provided for rent to be paid monthly in advance, was, in effect, the taking of a tenancy deposit."

Then in first appeal

The key words . . . in section 212(8) are 'as security for'". He referred to the decision of this Court in Woods v Wise [1955] 2 QB 29 and observed that "the Court must look at the surrounding facts and construe this agreement objectively as to what the parties actually intended, and that it should also be alert to the possibility that landlords might try and disguise a payment so as to avoid the provisions of the Housing Acts". He went on to say this:

"30. Whilst accepting that this clause [clause 1.7] is not as felicitously drafted as it ought to be, and that the first part of clause 1.7 is predicated on monthly rent in advance, the Court cannot ignore paragraphs 1.7.8 and 1.7.9 and should do its best, if it is possible, to construe the clause so as to make sense, and in my judgment it is not difficult to make sense of this clause.

31. What this whole clause means is that six months' rent is payable generally in advance, but if there are suitable credit checks then 1.7.8 would be waived and monthly payments would then satisfy the rent covenant, and then at the end of six months further reference would be taken up and, if satisfactory, the provisions of 1.7.1, 1.7.3 and 1.7.4 would apply.

32. I am not going to redraft this provision but you have to construe the whole of the clause and see if you can reconcile 1.7.8, 1.7.9 with the earlier sub clauses, and in my judgment it is plain that you can and that this is an agreement which expressly requires the tenant to pay six months' rent in advance. The reason for that payment is clearly about the Respondent's or tenant's credit, but the payment is, nevertheless a performance by the tenant of a principal obligation."

At paragraph 26 of his judgment, the judge had referred to the submission advanced before him on behalf of the landlords:

" . . . the payment made by [the tenant] was not a payment to secure an obligation, but was a payment to comply with a primary obligation, namely that of paying rent. There is nothing unusual about advance rent being required and that payment being objectively categorised as rent rather than security for rent, . . ."

When an Appeal Court makes a decision they have to consider the impact on Landlords and Tenants in other contracts. If they had not decided as they did (in favour of Landlords) then Tenants would probably suffer.

So if you read the case on the link below you will see that they have decided to see Rent, Advance Rent and Deposit differently. Note it was critical in this case that a deposit was taken separately and protected, so that made it easier for them. They then considered the Rent as a liability and the advance rent as security for that liability.

Whilst I agree with the judgement because of the potential negative effect to the market, I think they might have interpreted things differently on the advance rent and helped clarify a lot of other cases.

To me, when a Landlord takes a deposit “for security of the performance of the contract” that performance is BOTH rent and damages.

There is no point saying something is advance rent in the tenancy agreement if you then take rent during the period you have been pre-paid for, otherwise it serves as a deposit (acts like a duck).

The reason for my thinking on this is S213(8) of Housing Act AND S212(8) says:

(8) In subsection (7) “deposit” means a transfer of property intended to be held (by the landlord or otherwise) as security for—
(a) the performance of any obligations of the tenant, or
(b) the discharge of any liability of his,
arising under or in connection with the tenancy.

So the Acts says a “deposit” is both

So they took six months’ rent upfront - which the agent held onto which complicates things as the Landlord was paid it monthly, BUT they then took further rent for a period they already had security for:

2010-10-01 6 months’ rent upfront so rent paid to 2011-03-31
2010-12-01 2 months’ rent paid so topping it back up to 6 months
2011-02-01 2 months’ rent paid so topping it back up to 6 months
2011-04-01 2 months’ rent paid so topping it back up to 6 months

So the tenant effectively paid the rent twice for the same period, thus the 6 month payment was in effect acting as a security deposit. However, the Court saw that as a security on a liability, that is not how I would view it, but they are obviously the Authority.

HOWEVER, the Judges had to make sense of what was intended as well as how both parties might be impacted (as well as Landlords & Tenants generally).

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

“Paragraph 1.7.8 contains two distinct limbs: "[1] The first six months rent are to be paid in advance and [2] on the First of October 2010 and thereafter on alternate months (1st December 2010, 1st February 2011, 1st April 2011 etc) two month's rent is payable . . .". The effect (ignoring, for the moment, paragraph 1.7.4) is to require payment in advance on or before 1 May 2010 of the rent for each of the months of May, June, July, August, September and October 2010; to require payment on 1 October 2010 of the rent for each of the months of November and December 2010; to require payment on 1 December 2010 of the rent for each of the months of January and February 2011; to require payment on 1 February 2011 of the rent for each of the months of March and April 2011; and so on for the duration of the statutory periodic tenancy (if any) that might arise on 1 November 2010. In that context, it is pertinent to have in mind that (as the parties must be taken to have appreciated when they entered into the May 2010 tenancy agreement) the landlords would not be entitled to possession of the flat on 31 October 2010 (at the end of the fixed term) unless they had given notice under section 21(1)(b) of the Housing Act 1988 on or before 31 August 2010; and that, if the tenant remained in possession after 31 October 2010, a statutory periodic tenancy would, necessarily, arise under section 5 of that Act.

It follows (ignoring for the moment, paragraph 1.7.4) that paragraph 1.7.8 requires (by way of examples) that payment of the rent for the month of September 2010 be made on or before 1 May 2010; that payment of the rent for the month of November 2010 (if no notice has been given under section 21(1)(b) of the 1988 Act on or before 31 August 2010 and the tenant remains in possession after 31 October 2010) be made on or before 1 October 2010; and that payment of the rent for the month of February 2011 be made on or before 1 December 2010. On a first reading, the dates for payment of rent under paragraph 1.7.8 may appear inconsistent with paragraph 1.7.4; which provides that the "Rent Due Date" will be the first day of each month. Under paragraph 1.7.4 (if it stood alone) the dates for payment of the rent for the months of September 2010, November 2010 and February 2011 would be, respectively, 1 September 2010, 1 November 2010 and 1 February 2011.

The key to resolving that apparent inconsistency is found in paragraph 1.7.9:

1.7.9 The tenant can be re-referenced at the end of the six month term. If the tenant can be satisfactorily referenced, then clause 1.7.8 will not apply and the rent can be paid on a calendar monthly basis."
That paragraph makes it clear (i) that paragraph 1.7.8 is intended to apply unless and until (after the end of the fixed six month term) the tenant receives a more satisfactory credit reference and (ii) that, for so long as paragraph 1.7.8 does apply, it has the effect of suspending the provisions of paragraph 1.7.4. To put the point another way, paragraph 1.7.4 – and, so far as necessary, paragraphs 1.7.1 and 1.7.3 – are to have effect subject to paragraph 1.7.8 for so long as paragraph

"1.7.8 does apply: that is to say, until paragraph 1.7.8 is dis-applied following a further credit reference. Given that paragraph 1.7.9 appears to contemplate that the tenant will not be re-referenced until after the end of the fixed six month term, it follows that – if clause 1.7 is read as a whole - the parties must be taken to have intended that paragraph 1.7.4 would not have effect during the fixed six month term. That conclusion is consistent, first, with the factual position that would exist if the first six months' rent were paid on or before 1 May 2010 (as the first limb of paragraph 1.7.8 requires) – because there would then be no more rent to pay until the end of the fixed six month term – and, second, with the fact that paragraph 1.7.4 itself is, in form, an interpretation provision which defines a term (the "Rent Due Date") which is only of relevance when the statutory periodic tenancy has arisen (see paragraph 2.5.2).

For those reasons I would reject the first of the appellant's grounds of appeal. It seems to me that His Honour Judge Simpkiss was correct to hold that, read as a whole, the May 2010 tenancy agreement did require that the first six months' rent be paid, in advance, on or before 1 May 2010.”

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SO here is how I see it, the Appeal Court was thinking of WHY the Landlord took the security, was it because a tenant might not be able to afford a month’s rent or was it that there was a liability in the contract to pay more rent and what risk was there to the Landlord at the end of that six month contracted period.

MY take would be that the six month tenancy would be over and so it was acting as a deposit because if the tenant left at the end of the agreement the Landlord would need to repay them the advance rent. However, the Judges considered what would happen if she did NOT leave and her right to have an SPT if a notice was not served.

Again I would have said that they could have the top up to keep two or maybe three months’ rent security to the liability, but the Judges considered the fact that after 31 October 2010 there was no further tenancy agreement, the tenant remained in possession of the flat, under the statutory periodic tenancy.

The other reason I would have looked at it differently was because of the potential of re-referencing in 1.79, but the key problem with the referencing for this tenant was that she had no bad credit but also no income.

If you have not lost the will to live reading the above let us return to your position.

As long as your contract is well constructed to adapt to the circumstances AND the deposit is separately taken and protected, then the Landlord is safe. The reason for the RLA advice is that they can’t give blanket advice because the quoted Judgement considered so many clauses that led to the decision and their members may not have such clauses.

This is one of the things I see so many times; a Landlord gets a contract drawn up by a Solicitor but then decides to amend it themselves, not being aware that it may open doors to litigation. Then Judges have to dissect the terms of the agreement and look at what was intended.

So as I said in my previous post, if you construct your tenancy properly, possible with the core clauses referred to in this judgement, but perhaps expanded to explicitly define the prepayment as a security on the liability of rent, while it separately defines the deposit as a security for the performance of the contract, then in the event of any dispute you could easily bat down any claim with a copy of this Judgement. You would need to remove any terms that contradict so MAKE SURE YOU GET THIS DONE BY YOUR SOLICITOR as they will need to make sure that there are no terms that conflict.

Read the full judgement here:

bailii.org/ew/cases/EWCA/Civ/2013/415.html

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Teabin 5th June, 2019 @ 20:06

Good evening
What happens if one tenant screws the other tenant over, they part on bad terms, the bad tenant is now trying to screw the landlord for upwards of £5k because the deposit was not protected in time (landlord has proof she tried valiantly to protect deposit but had letting agent working against her. LL protected deposit as soon as she received it 3 days after 30 day period) and the human tenant wants no part of it? Can the bad tenant still pursue the landlord without the agreement of the nice one?
Both tenants shared cost of upfront deposit and were both refunded in full at end of tenancy
Thank you
This website is amazing.

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David 5th June, 2019 @ 20:57

@Teabin

I am assuming you are the Landlord who valiantly tried to protect deposit?

The bad tenant can TRY to pursue you but I can help you get that case dismissed, under common law all parties to the tenancy have to be parties to the claim OR to authorise the bad tenant, to bring claim on their behalf.

The reason for this is that once they start a claim all the parties are liable for any counter claim or other costs awarded by the Court.

I also have deposit protection case law on this that I have used several times, so far only one law firm was dumb enough to continue the claim, they employed Counsel for Court to intimidate and when he saw it he withdrew.

However you do not want to tell the bad tenant about this until you have snookered them, that means getting a proper legally binding settlement agreement with the nice tenant. I can help you with that if you contact me via the forum.

Follow the instructions in post 304 above to send me a PM via the forum.

BTW it does not matter who paid the deposit, or in what percentage

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Karen hichisson 12th June, 2019 @ 22:59

I failed to protect my tenant’s deposit so the section 21 I served is invalid . If I we can
agree a settlement ( say 1x deposit ) and put it in writing , would that mean that it’s the
end of the matter and they can’t pursue me for anymore?

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David 13th June, 2019 @ 00:48

@Karen

The settlement agreement needs to be explicit and aspects of it can depend on your situation.

I am happy to draft you a custom agreement if you contact me via the forum.

Follow the instructions in post 304 above to send me a PM via the forum.

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Lee 1st July, 2019 @ 12:47

Hi David. I am a novice landlord and have a story similar to what you have probably heard many times before. I failed to protect my tenants deposit due to genuinely not knowing as this was the first deposit I had ever received. Although they were particularly bad tenants and left the property in a poor state we always had a fantastic tentant/landlord relationship (so I thought) and I always bend over backwards to accommodate them. I returned almost all of there deposit the day after there tenancy ended and made a small deduction for damage at the figure that they suggested. All was good and thought I had only had my fingers slightly burnt for my shortfalls!
It now appears the temptation for free cash was just too great and all there morals have gone out the window as I have received a letter from a no win no fee solicitors demanding a large sum of money. I would really appreciate any advice you could offer on the best way for me to proceed.

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David 2nd July, 2019 @ 00:46

@Lee

Sadly the history does not come into it, although I imagine it makes you question your judgement of people.

I would be happy to help you minimise your payout or avoid it completely in some circumstances.

This always depends on the circumstances of the case and because it is a live case you risk prejudicing yourself by giving details here on the blog.

Follow the instructions in post 304 above to send me a PM via the forum.

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Katie 29th July, 2019 @ 23:17

Hello,

I'm looking for some help. I've had a tenant move out with 4 months rent arrears and a small burn on the carpet. They tried to get the deposit back 2 weeks before the end of tenancy so at this point the DPS informed them I was in breach of the deposit because I had protected the deposit within 60 days not 30.

I understand they can take me to court which as a 1st time landlord is hard to take but I understand I didn't know and therefore abide by the law. The bit which I'm unsure about is whether I can hold on to the deposit to cover some of my rent arrears and apply to the court for the rest? I need some help understanding all of the fees to know what my next step should be.

Any help is appreciated!

Many thanks,
Katie

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David 30th July, 2019 @ 00:09

@Katie

You absolutely will have the DPS hold onto the deposit and give it to you in lieu of their rent arrears AND the damages, if the tenant do not agree to release it we move to threaten them with legal action. The DPS will offer to use their mediation service but give choice to use them or they back off if the matter goes Court.

Regardless of what they may have been told, you have mitigation and we can probably get your sanctions down to 1x the deposit.

However, the idea is to negotiate a settlement, they have a lot to lose, if you bring action and they want to bring a counterclaim they have to pay the Court fee or you can get their claim not heard. Even if they pay the Court fee they can still be held liable for your legal fees. There would not be a set off as such but Judges do not like this sort of thing so they tend to be more lenient with tenants who they can see have arrears. You will be able to claim interest on the arrears from the day of each lack of payment to the day you get the Judgement. The tenant will then have a CCJ which if they do not settle within 28 days will follow them around like a bad smell for years. I will help you lay this out in a way that makes them inclined to settle.

Note, if they try to use a claim firm I have a way respond during pre-action conduct or to file a counterclaim that will make most claim firms either drop the case or ask the tenant for £2k on account. Most simply will not do it because they operate cookie cutter law on undefended claims.

As your claim is live it is best we discuss privately via the forum, please follow the instructions in post 304 above to send me a PM via the forum.

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snowy 9th September, 2019 @ 19:27

Good Evening

I have a question if a landlord failed to protect the deposit on time due to various issues from tenants being behind with their rent and not affording the deposit in full when they moved in and accepting the deposit payment over a six month period .once they move out and counterclaim for the late deposit protection do they have to send a letter before action.and if its after the six years and 30 day issue what is the chances of receiving a payout

many thanks

snowy

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David 9th September, 2019 @ 22:48

@snowy

The deposit legislation applies to the deposit as received, the Landlord should have protected the first instalment with one of the three companies within 30 days.

I would advise such a Landlord to issue an Prescribed Information within 30 days and put the full amount on the PI, the payment arrangement can be treated as what it is and there is case law to cover that.

It being 6 years later the instalments are not relevant, what matters is the protection and PI.

Civil Procedure Rules dictate that a letter before action is required, it would actually be more prudent to seek a settlement before then.

With regard to the 6 years and 1 month issue, this would depend on the case in question and there being reasonable grounds to use the extension to 12 years in special circumstances.

However, I have also had the Judge allow a case that was brought within 6 years from when the tenant became aware of the Landlord's obligation with regard to deposit protection.

Not sure if you are Tenant or Landlord but if you need my help with your case please use the instructions on post 304 to contact me via the forum.

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