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

For a general overview and background on tenancy deposits, please refer to the tenancy deposit guide. For those of you 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.

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

To be in compliance 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, quite frankly, is most).

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!

Mr Forgetful
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 your attend to repairs and maintenance issues 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 its 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, weather you’re a landlord or a tenant? I’d love to hear your story!

642 Comments- Join The Conversation...

Showing 592 - 642 comments (out of 642)
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vanessa 16th July, 2018 @ 09:01

ps: nothing in the AST about rent increases.

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Simon Pambin 16th July, 2018 @ 09:05

Boaty, if you read the original post again, you'll note that the tenancy has become a statutory periodic tenancy.

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BoatyMcFaceBoat 16th July, 2018 @ 10:32

A statutory periodic tenancy arising does not prevent any annual (or whatever period) increase if it was written into the tenancy agreement.

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David 16th July, 2018 @ 12:37

@BoatyMcFaceBoat

Again you are WRONG!

It is all explained in the High Court Appeal below

http://www.bailii.org/ew/cases/EWHC/Admin/2009/1367.html

In this case, a property was let in 1998 for £7148 annually in advance with a provision in AST for a 5% increase, which the Landlord did not always use but rather made modest increases.

The contract went to SPT and there was no agreement to change terms within a year.

Then in 2008 the Landlord wanted to increase the rent to £16,800, interestingly the 5% clause would have taken till beyond 2015 to get to that level, but that is another argument.

The Landlord did not use an email or text, but used section 13(2) of the 1988 Act proposing a new rent. It was referred for rent review, but the London Rent Assessment Panel decided that it had no jurisdiction to determine the application, because they thought the AST was paramount.

What this case established firmly was that in this scenario the Statutory Provisions prevail, this time in favour of the Landlord who wanted the Panel to determine the rent:

"10 The solution is found in section 5(3) of the 1988 Act. Section 5(3) preserves the pre-existing terms subject to, inter alia, section 13. It follows, in my judgment, that a rent review clause in the original assured tenancy purporting to govern the position once it has been superseded by a statutory periodic tenancy is of no effect. The 'subject to' proviso excludes any rent review clause from the statutory periodic tenancy. In its place, the statutory scheme kicks in. Therefore, absent agreement regarding an increase in rent of a statutory periodic tenancy (see section 13(5)) the landlord must use the notice provisions on section 13(2) which then enable the tenant to seek an assessment if he wishes. As Megarry puts it:

"In short, for other periodic tenancies the rent increase clause prevails, while for statutory periodic tenancies the statutory system prevails."

"11. With respect to the panel, having found that the tenancy was a statutory periodic tenancy, it fell into error in considering that section 13(1)(b) was in play rather than section 13(1)(a). For these reasons, this appeal is allowed and the case will be remitted to the Panel to determine the rent. "

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BoatyMcFaceBoat 16th July, 2018 @ 14:11

Well done!
You've got one right at last.
(Well strictly speaking it was Simon Pambin but you need all the help you can get)

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Simon Pambin 16th July, 2018 @ 14:46

Boaty, David was right from the outset.

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Saz 19th July, 2018 @ 09:18

Hi,

I moved into a property on 23/6. paid my deposit on the 18/6 and have not had any details on where it is. I have checked all 3 gov websites and its not registered.

My landlord has also refused to let us park our truck in the space she agreed we could have (house was advertised with parking and she gave us a spot when we moved in) because her 'gardners van' cant get past (she is our neighbor)

Can you help? any advice would be great

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David 19th July, 2018 @ 09:49

@Saz

Regarding the parking the contract and property advert would determine what was offered and what rights she has, for example there may be a clause that says vehicles that are so large that they obstruct other residents or neighbours are not allowed to be parked. Many tenancies have clauses that forbit commercial or work vehicles.

Regarding the deposit the deposit needed to be protected within 30 days of 18/6, some Judges would not be too concerned if it was a matter of days, the longer it takes the more likely a 3x award will be made, but the Landlord may have some mitigation so it could be 1x, if the deposit is not protected within 30 days for the initial tenancy then the second deposit is deemed also as not protected.

Assuming you are talking about 18/6/2018 you could negotiate breaking the tenancy if she advertised it with parking and there are no clauses. If they decline you can negotiate further or else bring proceedings for breach of contract, with a cost of renting a suitable parking place close by. Even without a negative clause if the ad and or tenancy clause says car parking space a Judge may well side with them that the space is for cars. It really depends, near where I live there is a chap with a long MPV that annoys but it tolerated, there is also a Council worker with a really long and wide van, a lot of complaints made about the latter.

Then when you leave you will have 6 years to bring a claim from finding out your deposit was not protected.

Best not to mention it now, if you have a six month tenancy, then if they do not issue you with a S21 to end the tenancy you could remain until they do, an S21 notice is void if there is no deposit protected or no EPC prior to occupancy or no Gas certificate within first 28 days.

When the first tenancy expires a new Statutory Periodic Tenancy is created by law and that too becomes subject to up to 3x the sanctions.

The lesson here for landlords is make sure that initial deposit is protected no matter what!

If you want me to look over a scan of your tenancy then use the instructions in post 583 above to PM me via the forum.

I would not put any more detail about your tenancy as it may identify you.

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saz 19th July, 2018 @ 10:23

Thank @david for the reply.

If we ignore the parking for now, can I just clarify on the deposit please?

Yes it was 2018. Now that she is over 30 days and has not protected it, when would you recommend raising this? Would you wait until the lease is up (12 month lease) or now?

Thanks again.

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David 20th July, 2018 @ 11:10

@Saz

Yes wait for the 12 months to be up, if the tenancy is not renewed and you stay in the property then that counts as two tenancies and if the first was not protected in 30 days the second is deemed as same.

I would wait until the end of the tenancy and until you have your deposit back as it is very common for damages to suddenly "appear" which is why it is important to have an inventory and photo evidence of what damage is there at beginning and what is there now. Use video and photo on your phone, both have meta data embedded that can prove the date and time.

If you bring this up now you will likely put the LL's back up and a reference is highly unlikely. Right now you have this dispute but in a year you might have sorted it all out and be best friends, or at least respect each other.

You never know what is down the road, you might fall on hard times and not be able to afford to move, your landlord may want a new tenant because they want to increase rent, so they issue a no fault S21, except that if your deposit has not been protected THEY CAN'T until is has been protected. If you told them on the 59th day that their S21 was rejected as it was not legally compliant then that buys you another 2 months, from when they finally protect it and serve the Prescribed Information.

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Lisa 21st July, 2018 @ 12:23

I have a tenancy agreement and the landlord has not protected the deposit. The LL has even confirmed what he is using the deposit for in a email to me a few weeks ago when I asked for the details of the scheme used. It has been over 30 days since the start of the tenancy and I am due to leave the property next month, however, I do not trust the LL to return the deposit funds (due to previous issues).

The property is also being sold and I am concerned that he will run off with the funds once the property sale completes and I have moved out.

Any advice is really appreciated at this point. The tenancy meets the rules for an AST.

Thanks in advance

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David 21st July, 2018 @ 12:50

@Lisa

Starting with how you ended can you please confirm what you meant by

"The tenancy meets the rules for an AST"

This type of language is often used when a Landlord has not issued an AST, has issued a licence of some sort (illegally), used a lodger agreement but was not resident or has not issued an agreement at all in which case an SPT is created which is legally a type of AST.

When you say run off, do you expect them to leave the Country?

Are they a foreign national?

The leverage you have at this stage is to not leave the property, to keep paying your rent and force the Landlord to use a Section 21 eviction procedure which would normally take 2 months.

However, whilst he can issue the notice he will not be able to enforce it as the deposit needs to be protected for an S21 to be valid. I would not recommend you withhold rent as this would enable him to issue a S8 eviction procedure which does not have the same protection.

If your concern is only your deposit, the answer to this is email him and the agent involved in the sale saying that you will not be leaving the property as originally suggested unless you are immediately paid your deposit back in full as it has not been protected in an approved scheme.

Do not sign any settlement agreement at this stage, just get your deposit back, it is illegal to evict you without a S21 or S8 and the going rate for a forced eviction is around £40k.

You are entitled to change the locks and you are not obliged to allow visitors, such as potential buyers around.

In addition to this the Landlord is facing a sanction of 3x the deposit which will be payable to you. The fact that the tenancy is almost up and they have still not protected the deposit means that they are leaning towards the full 3x sanction. The moment you informed them of their failure they should have protected the deposit in an approved scheme with DPS, TDS or MyDeposits, this might have given them some mitigation.

If your tenancy was actually more than one tenancy, for example say you had 3 tenancies then remained in the property so it went SPT, then there would be 4 tenancies each with up to 3x the deposit as a sanction.

So at this stage the best approach is to contact the Landlord, keep it light, say that you are concerned about your deposit and would like it returned immediately and an inventory inspection done at the same time.

Do not take any BS, if there is any delay then you step it up, tell him you will not be leaving and that you are considering starting legal proceedings for his failure to protect the deposit. If the Landlord is not a UK citizen and you have a concern about him running off then simply tell him that you will be placing a caution at the Land Registry and seeking a charge on the property which will need to be satisfied before the property can be sold.

I may be able to get a mediator to act for you to avoid legal action, it really depends on the circumstances of the case.

I would not put any more detail about your tenancy as it may identify you.

If you want me to look over your case then use the instructions in post 583 above to PM me via the forum. There is no reason why you cannot file this yourself with my support and this save yourself losing a third of your sanction via a claim company, it is also better for the landlord as the claim companies tent to rack up the fees.

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Lisa 22nd July, 2018 @ 13:40

Thanks David

I have followed the instructions and sent a PM through the forum.

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julia 27th July, 2018 @ 18:51

A question for the forum: I protected my tenant's deposit within 30 days. However that protection expired at the end of the lease. When the tenancy rolled into a month-by-month statutory tenancy I could not find a link to re-protect it on the deposit website - I live abroad so was doing everything online. On return to England I called the deposit company and they reprotected the deposit. I served a section 21 and the tenant moved out and I repaid the deposit less minor charges. The tenant is now claiming three times the deposit amount on the grounds that there was a period when the deposit was not protected. Please advise.

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David 27th July, 2018 @ 20:42

@Julia

If your tenancy started after Oct 1st 2015 and
If you protected the deposit as well as served the Prescribed information
If the tenancy was continuous to SPT as you describe and
if you put the deposit into a custodial scheme

then there is no need to re-protect the deposit as was done before the Deregulation Act 2015. Dereg act says if you did it all properly for the first tenancy you are deemed to have done it properly for subsequent tenancies if the deposit is still in or covered by a scheme.

If your deposit was in an Insurance backed scheme (I HATE THESE) then it depends on the scheme.

They Insurance backed scheme usually have an overlap of a few months, so it will depend on when you came back.

Your tenant may be bluffing because you issued new paperwork but if you check with the scheme you might find you were covered by the first scheme for several extra months.

It is a VERY minor breach, I doubt they would get more than 1x the deposit, in fact I know some Judges who say "I find the deposit was protected in an approved scheme" one even denied appeal so if the tenant wanted to take it further they had to pay for leave to appeal and then pay for the appeal itself.

If it has gone to a claims company you could seek a settlement of £300 at this early stage, they will try to go for 1x plus some fees but you can say they are being "unreasonable" as defined by CPR and you will challenge their costs if they proceed on this vexatious claim.

Whilst the minimum a Judge can award is 1x the deposit, there is NOTHING in law that says two parties cannot agree something more reasonable. In fact the first rule of CPR is the overriding objective which is to avoid Court. Then there is the unreasonable behaviour for costs.

Claims companies only get £35% of what they win, so the way to structure the offer with a claims company is that the deposit was protected in accordance with the legislation and at worst there was a month or so when it was not covered, as such you are prepared to offer the claimant £100 and pay the Claim company £200 for their costs, that way they get the majority of the money and urge the client to take it. This only works on partial claims like yours, they can be real buggers if it is a 9x or 12x deposit claim.

if it is the tenant then you could negotiate as shown here

https://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

You have huge mitigation, you can also remind the tenant that they will not get a reference from you EVER if they proceed or if they settle they will get one.

It really is going to depend on how Guilty you are (do not admit it here as they may be reading it). You can use the letter on the link above to reduce their expectations and then see how it goes.

You can contact me via the forum if you wish to discuss anything confidential, check posts above for details of how to reach me.

The lesson here is those "minor charges" if they are that minor let it go if you are not 100% compliant yourself.

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las 13th August, 2018 @ 20:49

Hi
I am new to renting, I moved in with my partner, so I thought I give someone a home and make few bobs to help my partner pay the mortgage, it started well with an agency finding us a decent tenant, they took their share and stepped back, they did however mention the DPS, but I naively thought they took care of everything since their fees were a healthy lump sum, I had a good relationship with my tenant and I think that's where I went wrong I should have kept it professional, the tenant informed me they were to move out at the end of their tenancy even though it wasn't enough notice, they asked for their deposit back which I never had a problem with, but all I asked them was to wait until I comeback from my holidays, they insisted on me paying it straight away, then I reminded them of the clause in the TA we both signed that I have up to 14 days to return the deposit and this where they started to intimidate me, although they vacated the property they failed to return the keys to my representative as I was still away, and even now that I am back they still haven't made any attempt to reply to my emails, I suspect they found out I failed to protect their deposit and they're trying to make a case for compensation, my question now is on what grounds can they keep my property keys, and would I be within my right if I go ahead and change the locks and deduct it from the deposit, also they haven't been totally honest with me when I asked about their utility suppliers, if they decide to sue me what would be the consequences, it was an oversight from me not to register their deposit as I am new to this but I never denied them their deposit.

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David 14th August, 2018 @ 08:22

@las

You are right, it is a mistake for both Landlord and Tenant to think that they are friends, it is a professional relationship that often has demands from both parties.

As they say familiarity breeds contempt!

However, that does not mean you "Lord" it over them.

Not protecting the deposit leaves you liable to up to 3x the deposit, but you have serious mitigation and decent case law to back you up.

Right now I would look at the website of the agent, look also at their website at the time you engaged them (at archive.com), what you are looking for is any suggestion that they took responsibility for protecting the deposit.

However, if they told you in writing to protect it then it really is your own fault.

Still you might want to get in front of this and make an offer to resolve it, see article below

https://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

With regard to the keys, most well constructed tenancy agreements say that they have not surrendered the tenancy and are liable for rent until they return the keys, they also often have clauses for where they cause a requirement to change the locks. However, it is good practice to change the cylinder between tenants.

Really, the only value of their failure is to use in negotiation

I would suggest constructing a letter that seeks a settlement, I am happy to help you with this if you wish to contact me via the forum (instructions below), I can also have a look at your tenancy agreement.

I warn you that petty deductions are the biggest reason for people to take action regarding deposit protection. You need to engage with the tenant, do not worry about the utility suppliers, it is not your problem. You goal is to seek agreeable settlement.

You are liable for a minimum of 1x the deposit and it is quite easy to construct a defence for that, so the negotiation is about what you can do for them and what you can pay them for your oversight, all agreed in a settlement agreement.

Check the flat has no other damages, then reach out to the tenant about returning the deposit, just to get them engaged.

To register for the forum follow the directions below.

Click the Landlord forum link above or this link

https://www.landlordforumproject.co.uk

Join that forum (do not use a hotmail as it loses them, yahoo or gmail are OK)

Click on the link you get via email

Login in to the forum

Then click on the link below to private message me

http://bit.ly/davidpip

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Las 15th August, 2018 @ 14:03

Hi David

Thanks for your wise reply, I have started the negotiation process I offered to refund the full deposit in return for my keys and they have agreed, my worry now is, can they still take legal action even after accepting the full deposit, or is that enough to draw the line for this case and Lesson learned, also they sending someone else to hand the keys, it doesn't really bother me that much as the deposit will be transferred via internet banking to the original tenant.

I sent you a private message not sure if it went through.

Regards
Las

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David 15th August, 2018 @ 14:50

@Las

Just got your message this morning, been away on a case.

You will be liable for up to six years if they decide to bring a case, so sensible thing will be to get in front of this.

I will send you draft letter presently.

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OFM 20th August, 2018 @ 14:48

Hello @David - I may be a little late to the party here but I've just found this (wonderfully written) post. I've got a question about rent-in-advance and partially-protected deposits which I hope you can shed some light on....

In April 2018, I entered into an Assured Shorthold Tenancy agreement with a term of 6 months. As I was unable to provide a valid guarantor, I was asked to pay 3 months' 'rent in advance' in addition to a 1 month 'deposit'. Though I was unable to provide a guarantor, my credit checks, etc., were fine. I did pay all of the requested money, for a total of 4 months' rent, before being accepted for the tenancy.

Upon signing the agreement, I was informed - verbally - that the 3 month's rent in advance will be returned to me at the end of the tenancy and that I am to make rent payments each month until then.

The tenancy agreement states that rent is to be paid monthly, commencing May 2018 - a calendar month after the day that I signed the tenancy agreement. I have been paying the monthly rent in accordance with this since entering the tenancy agreement.

As the landlord is expecting to hold the additional 3 month's rent until end of the tenancy, and is expecting to receive rent payments each month, it seems as though this money (the 3 month's rent) is being held as a deposit and should be protected. Only the 1 month's rent 'deposit' has been entered into a deposit protection scheme however. The tenancy agreement does note that "The tenant has paid 3 months rent in advance", and provides the amount, but does not indicate that this would alleviate me of 3 of the monthly rent payments.

My question is: am I right in feeling that the 3 months' rent should also be protected? If it is not protected, am I within my rights to request that the 3 month's rent which I paid in advance be used in lieu of 3 monthly rent payments, or is this against the terms of the agreement which requires monthly payments commencing from May?

If the landlord does not accept the rent in advance as payments of rent, and does not protect the money paid, what course of action is available to me to ensure the protection and safe return of the 3 months' rent?

Regards
OFM

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David 20th August, 2018 @ 18:10

@OFM

This is a simple one; when the deposit requirements first came in certain Landlords, let's call them rogue to make them sound bad or exciting, resisted this law with their very soul.

The law was initially very poorly drafted and it was costing the Landlords (even the majority who are decent) a fortune (it was always 3x at the time). So Landlords went through a phase of calling deposits other things, such as advance rent or last 2 months rent in advance.

The deposit protection law has evolved, with 4 modifications and numerous case law Judgements.

We now has case law that calls a spade a spade or says if it looks like a duck and quacks like a duck then by golly it is a duck. This applies to lots of different aspects of law, for example granting a licence agreement for a lodger without the Landlord living in where the Tenant has exclusive use, then that duck is an AST not a licence.

The same applies to deposits, so the question is "in month 4 did you pay the rent as usual, if the Landlord did not say "hey buddy you already paid" and you said nothing and carried on paying the rent in month 5 and 6 as usual, then it will be decision time at the end of month 6.

At that point you will need to decide if you want to continue to rent the property, the Landlord can either allow the tenancy to roll over to a Statutory Period Tenancy and you continue to pay rent, they might want you to go in which case they will probably have issued you a S21 notice at then end of 4 months.

I presume you have a receipt for the monies paid or a bank statement showing a bank transfer? If not write an email to the Landlord confirming what was said verbally and ask where the deposit is, do this mid September.

If the monies taken have been used as an unprotected security deposit for the performance of the contract and not for rent then it becomes liable for sanction. The sanction will be between 1x and 3x the unprotected amount.

The deposit has to be protected and the PI served within 30 days.

Landlords reading this should take notice, especially if they have an insurance backed deposit protection (preferred by agents) rather than a custodial protection where the money is paid to the DPS, TDS or MyDeposits.

One of the most common causes of claims is where an crappy agent forgets to renew the deposit protection, or the Landlord fires the Agent in year 2 and the Agent quite rightly does not renew. It creates the same thing; a partial protection.

So if your rent was £1500 and you paid upfront and further rent as follows:

2018-04-01 £4500 Monies labelled as advance rent
2018-04-01 £1500 Deposit correctly protected
2018-05-01 Rent for May Month 2
2018-06-01 Rent for Jun Month 3
2018-07-01 Rent for Jul Month 4
2018-08-01 Rent for Aug Month 5
2018-09-01 Rent for Sep Month 6

Then there is always a balance of £3000 held as an additional security against the performance of the contract.

So as that was not protected there is a liability of between £3000 and £9000, you have up to six year to make a claim.

If you were not served an S21 and you do not leave but remain in the property then as long as the agreement is not already a contractual periodic tenancy then a new tenancy is created by statute and the liability applies to both tenancies so it becomes 2x to 6x or £6000 to £18,000.

Either way I can help you negotiate this with the Landlord or even bring a claim, it usually is unnecessary to bring a claim as most Landlords who screw up just want a fair way out.

I find their conduct towards Tenants determines this, if they have generally been good landlords and not tried to make unfair deductions then often a Tenant can decide "I can but I won't" take action. Remember you have 6 years and even hinting at claim before you go may encourage retaliation, fake claims on the deposit and of course no reference.

BTW a contractual periodic tenancy is one that has an initial term but at the end of that term carries on until one party give notice to quit.

Also note that if the Landlord issues an S21 while the full deposit is not protected, the notice is void, so if at the end of the 2 months they went to Court you could get the S21 thrown out and a new S21 would need to be issued once the unprotected amount was protected.

Ironically I am working on a case at the moment that is very similar, Landlord is facing over £15k of sanctions. A mediator will be involved and both parties will find it better than Court. As I have said many many times, it is always better to settle early and with the Tenant before it gets to Lawyers and claim companies, both of whom cost the Tenant and the Landlord.

The Course of Action would be to contact me via the forum as explained in post 608 above, I can either draft you a letter to send at the appropriate time or help you bring a claim.

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SAM 22nd August, 2018 @ 17:50

@David

I have a problem with my landlord as he has cheated me, by detecting an amount of money from my deposit after we agreed he is not going to charge me. From checking here, I have found that my landlord didn't protect my deposit and I can go to the court to gain some compensation.

May I ask you, David, please to be in touch with help me with this issue

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David 22nd August, 2018 @ 18:06

@SAM

I am happy to help you come to a mutually agreeable settlement with your Landlord.

I can help you achieve this without going to Court or giving away any of your sanctions, a settlement also avoids risk of of costly legal fees.

Look at post 608 above and follow the instructions to register with the forum and PM me.

As this is public blog and you might prejudice your case by going into detail here, we can discuss the history of the tenancy there and work out what is fair and reasonable.

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SAM 23rd August, 2018 @ 10:05

@David

Thank you so much for guiding me, I have sent a PM to your account via forum after I registered with the forum.

Looking forward to hearing from you,

SAM

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Jit 31st August, 2018 @ 21:36

Hello David,

First of all I would like to thank your for all the information that you provide here!

I have a question for which I couldn't find much information online. So I thought will check with you:

I have a friend (tenant) who was on fixed term tenancy starting 01/06/2014 till 30/09/2015. The deposit was protected From: 01/06/2014 to: 30/09/2015 under insurance scheme with MyDespoit. The contract was not renewed at the end of tenancy and the deposit got un-protected from end of September 2015. My friend continued to stay in the same property till end of June 2018.

After vacating the property, the landlord has made unreasonable deduction from the deposit. Tenant is unable to go to MyDeposit for Alternative Dispute Resolution as the deposit was un-protected long time ago. The tenant as sent a Letter before action stating that the deduction was unreasonable and he was the deposit back.

The landlord says:

Under the Deregulation ACT 2015, there is no requirement to reregister the deposit or protect it again, if there is no changes and the contract rolls over to a periodic tenancy.

Tenant didn't remember receiving an email from MyDeposit in 2015 about deposit being un-protected. But upon searching now, he was able to find that in his spam folder.

We aren't sure how to proceed in this case. Any guidance in this matter would be really helpful.

Thanks once again!
Jit

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David 1st September, 2018 @ 03:28

@Jit

There are several twists in this case.

If he protected the deposit AND served the PI within 30 days (full compliance with the Legislation) it would normally mean he did not require to protect it again.

The Landlord would be right if the tenancy had started after 1st October when the Dereg Act started.

However, the Dereg Act will apply to all other tenancies after 3 years from Oct 1st 2015, so that is Oct 1st 2018.

Your friend has a very short window to file a claim, they need to proceed immediately, under pre-action conduct they need to give 14 days before filing unless they already did that.

Interestingly there are some issues with the Dereg act which will need correcting by case law or new legislation. I will not go into it in detail here but there has been a snafu in the wording and so it will first need someone to depend on that and for a Court to decide on interpretation. Then an appeal to High Court or above.

If you want to get them to contact me I am happy to help but I cannot do it via an intermediary.

Have them look at post 608 above and follow the instructions to register with the forum and PM me.

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Taz 3rd September, 2018 @ 20:39

Hi I am a landlord who forgot to protect a deposit. My tenants signed a joint tenancy agreement. When one of the tenants moved out I realised that the deposit wasn’t protected and I did it straight away. One of the tenants is now threatening action. The other tenant agreed to sign a new tenancy agreement but he eventually moved out. He does not want to make a claim.

I have advised the tenant that wants to make a claim he cannot do anything unless the other tenant is party to it. He has come back and said that he paid the deposit on his own, I was not aware of that. He is also saying that as he was the lead tenant that is proof he paid the deposit!

Can this tenant bring a claim without cooperation from the other tenant.

Also after the initial 6 month tenancy they signed a further 6 month tenancy. He is arguing he is allowed compensation for both tenancies so 6 times the deposit amount, is this correct. Please help!

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David 4th September, 2018 @ 12:17

@Jit

Just re-reading your post and it seems I misread your post and thought you were saying LL had not re-protected SPT, so let me clarify my advice above.

The "unprotection" of an insurance policy is a failure if the tenancy continues.

Regardless of whether mydeposits wrote to your friend, there is no obligation on the tenant, it is the LL who has the obligation to protect the deposit and keep it protected.

The problem with an insurance scheme (which is why I ALWAYS advise against using them) is that they expire. They can expire because an agent gets terminated.

So the time limit does not matter, that LL has a fail,

the part of the Dereg act that applies is as follows

(f) when the new tenancy comes into being, the deposit CONTINUES to be held in connection with the new tenancy, in accordance with the same authorised scheme as when the requirements of section 213(5) and (6)(a) were last complied with by the landlord in relation to the deposit.

NOTE: this is just one of the conditions of the 215B (1) available here

http://www.legislation.gov.uk/ukpga/2015/20/crossheading/housing-and-development/enacted

Sorry for the mistake of thinking you were referring to SPT where deposit remained protected.

As I said above, there is a snafu in Dereg Act anyway that affects the rollback to old tenancies, so LL's may still face a claim on an SPT for pre Oct 2015 tenancies à la superstrike v rodrigues which is the case law the Dereg act corrected.

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David 4th September, 2018 @ 15:10

@Taz

The first bar is the contract, it really depends on how it is constructed, if they have separate AST's or whether they are all party to a single agreement.

Strictly speaking it is the agreement that is the starting point, if they were joint tenants then they both need to be a party to the claim or else give permission/authority to the other parties of the agreement to represent them in the claim.

Then there is the deposit protection legislation itself, which has terms but also includes the rules of the specific scheme.

The deposit has to be protected for all parties that paid it, if Tenant2 paid it to Tenant1 then you would have an obligation to inform the DPS, TPS or MyDeposits, of the names of all the tenants to whom the deposit relates. So log into the portal and check.

My advice would be to immediately contact Tenant2 and ask them whether they paid a deposit or part of it to Tenant1, wait for their email reply.

The reach out to them and enter into a written settlement agreement for them where they agree that they will not bring or authorise a claim under S213 of Housing Act. Pay them a few hundred in settlement and give them a positive reference.

Upon signing of that agreement Tenant1 will not succeed in bringing a claim.

Being lead tenant does not prove anything at all other than he was lead tenant and that terms in your agreement may confer certain rights to him.

The obligation to pay sanctions for each breach depends on the date, if after Oct 2015, if you protected the first then you are covered for SPT as long as the deposit remains protected by an authorised scheme.

If Tenancy1 was NOT protected and you take out another agreement but protect the deposit for Tenancy2 then there is only one failure.

If Tenancy1 was NOT protected and you take out another agreement but FAIL to protect the deposit for Tenancy2 then there are two failures.

Basically, if you do it all properly and keep it protected continually for the duration then you are deemed to have protected SPT's, renewals and replacements, note the word continually.

After Oct 2018 the Dereg Act is supposed to apply to all older tenancies too, this may be challenged at some point.

We have had Landlords here who have entered into a settlement with tenant who did not want to make a claim upon receiving the same advice and it stymied the claim of the tenant.

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Taz 4th September, 2018 @ 16:50

Hi David

Thanks for your response. The two tenants signed a joint agreement. I have a statement from the second tenant confirming that he will not make a s213 claim and does not authorise the first tenant to make a claim on his behalf.

The first tenant is not prepared to back down on his position. He says that he can prove that he paid the full deposit and on that basis the court would allow him to make this claim solely.

The tenant has made me a offer of 1x deposit for each tenancy. I am conscious of the costs should it go to Court. Should I accept the offer or will I be successful if I go to Court on the basis that the claim should be struck out.

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David 4th September, 2018 @ 17:00

@Taz

A statement is not a settlement agreement, he can change his mind.

A settlement agreement is binding in Court, I can draft one for you.

Contact me via the forum as shown in post 608 and I will draft you a letter for the tenant who wants to go to Court.

However, lock that 2nd tenant down, for there to be a settlement you really want there to be an exchange of something, even if just a positive reference or £100.

I would NOT pay this at this stage, delay the tenant by saying you are seeking legal advice.

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Little Miss Perfect 5th September, 2018 @ 13:47

I have just checked all three deposit schemes and found none of them hold my deposit, though i have Prescribed Information from my letting agent stating it is held by the agent as stakeholder. Does this mean it is protected or has the letting agent stuffed it in his bank for his own benefit..? I have been in the property for 6 months and have just signed a contract for another year for Assured Shorthold Tenancy

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David 5th September, 2018 @ 14:54

@Little Miss Perfect

You said that you have been in the property and had just signed for another year for an AST, I presume you had another AST in the first place and that Landlord did not live with you being a lodger?

Often the problem is the agent forgets to renew or gets fired and the LL is not aware.

This is SO common and a wake up call for Landlords, because they are liable and have to take proceedings against the Agent.

I would advise double checking the schemes, if after 30 days of your new tenancy there is still no protection, then the penalty doubles because of the obligation to protect the second tenancy.

You have up to six years to claim and if there is a 3rd tenancy that is unprotected after the year or if you stay in the property after expiry that creates a new Statutory Periodic tenancy (SPT) which would be the 3rd failure if not protected within 30 days of that tenancy.

Each tenancy failure exacerbates the position for mitigation by the Court and makes it more likely that they will charge the full 3x the deposit, for EACH tenancy.

So for now you are best to bide your time, take screen shots of your checking for the deposit.

The agent can keep the money in their bank accounts IF they take out an insurance backed protection with one of the three authorised deposit protection companies. It would have come up in the search if they had such protection.

Note that the requirement for the protection starts from the date they take the money not the date of the tenancy. So if you looked at a property in January, paid a holding deposit, they did their referencing checks in February and you started the tenancy in March, then you would need to search the three sites for 3 months before you took the tenancy. This applies when any deposit taken in connection with an AST, it might start out as a Holding Deposit but then become the security deposit or part thereof.

I do not see how you could be served legally valid Prescribed Information as it has to provide details of which authorised scheme the deposit is protected at. It has to be DPS, TDS or MyDeposits (except Scotland which has it's own), it has to contain all the details of the tenancy and the details of how to access the scheme.

If the deposit WAS protected, depending on which scheme, you would have received an email or text, some do both, some only send SMS if the text bounces.

So the lack of those is also an indicator that there is a failure here.

For now just sit back and check every quarter.

It is important to gather the evidence now that it was not protected, albeit that if they do subsequently protect it you will be able to get into the portal of the deposit scheme and see exactly when it was protected.

You can also call each of the deposit protection companies, tell them that you want to just make sure that there has not been a clerical error, give them the address and ask if they hold ANY protection for anyone, they will not be able to give you details but they will confirm if for example they spelt your name Little Miss Prefect instead of Little Miss Perfect.

Once you are absolutely sure there has been no protection just gather your evidence and wait, the longer they fail the more that will be awarded.

When the time comes I am happy to help you and your Landlord reach a settlement and help them get the money from the agent assuming they have not gone bust by them (common).

Here is the law on the PI, you can see they have to provide all of this:

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.

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angela 11th September, 2018 @ 08:35

Morning David.
I just wanted give you the update on my court case.
After a year of stress over this dodgy landlord and her boyfriend we attended court yesterday. It was took around 3 hours, but i got the result i wanted. I won my deposit back and because they lied through their teeth, and i had all the evidence to back this up, they were given the full penalty of paying me 3x my deposit. They even started arguing with the judge wanting an appeal.. the Judge told them where to go..Liar's always get caught out..

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David 11th September, 2018 @ 09:03

@Angela

Congratulations, I remember the case, Landlord suggested you had not paid rent when you had bank statement evidence, how daft is that!

Courts really do not like their time being wasted and will throw the book at either party if they are caught in a lie.

In fact once you tell a single lie none of your evidence is credible.

She can of course appeal if she wants to but she would have a hard time and would be subject to a much higher threshold of costs.

I always suggest people should TRY to settle because if you haven't protected the deposit there is a minimum 1x sanction, so best to justify the mitigation you have and then agree it.

Had she returned your deposit and offered you 1x the deposit or even a few hundred pounds in the first place you probably would not have bothered to go to Court.

It is a learning experience, she chose to learn the hard way.

She also learnt never argue with the Judge, they are the ones that rule!

BTW you can always pay for a transcript of the hearing, worth every penny sometimes!

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ANA22 14th September, 2018 @ 17:21

Some advice please,
I recently won a case against my dodgy landlord because they didn't secure my deposit and lied about it resulting in the maximum fine.. now i am being continually emailed by them claiming that i am a liar, and they are hard done to and they are the victims, etc etc..

Is there anything i can do ?

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David 14th September, 2018 @ 18:20

@ANA22

Have you been paid the Judgement yet?

Did you have a Solicitor?

Are you still in his property?

The best thing to do is to report it to the Police, under Protection From Harassment Act. There needs to be at least two actions of Harassment before you contact them, then probably another before they will act (on things like text or emails), but you can ask they keep a record of it.

If the messages are menacing or escalating then they may take it more seriously.

Also you must not have responded in a similar manner to the Landlord, it is best to not reply at all.

It really depends on how bad it is; there are several options open to you.

If the claim has not been paid you can pay £80 to escalate to HCEO's and have them enforce it, but that is a bit harsh if it is just one email.

If it has escalated to Stalking, then read this guidance

https://www.cps.gov.uk/legal-guidance/stalking-and-harassment

You could pay the Court to ask the same Judge to make a simple addition to the Order that the Landlord cease and desist from contacting you and pay the sum via the Court or your Solicitor.

If it continues then an injunction is an option, but it will probably die down if you just ignore it. If you get an injunction then it is a Criminal Offence to breach it.

If you respond to the message you give it oxygen, so no matter how bad it is do not reply.

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Tim 18th September, 2018 @ 08:57

This is a fascinating read, though I have to say, I was hoping we would never be here.

The scenario:

Tenants have been in the house on an AST for 5 months. However, the tenants have recently split up. The money maker is happy to step out and go elsewhere, the non money maker wishes to stay in the house with the kids. Clearly they won't be able to afford it in the long term. It should be noted that no payments have been missed as of yet.

The stinking log on the carpet however is, the deposit although taken and secured ( we are nice ), it wasn't registered officially so its worth nothing on the paper it isn't printed on! There are vaguely mitigating circumstances in this regard but one has failed miserably and its clear cut.

Any suggestions on how to move forward for a clean break?

Thanks kindly

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David 18th September, 2018 @ 10:47

@Tim

You raise several issues here:

1. Both parties are liable for the original contract until it is legally terminated and for the subsequence SPT created if they do not leave the property if it expires.

2. If one party leaves and it is the money maker as you refer to it, then presumably they will be making some sort of contribution to the mother for the children.

3. To remain in the property by herself the mother really needs a tenancy of her own, she will need to go through tenant referencing which includes affordability. It may be that the departing ex will agree to be a guarantor for that new tenancy. She will need this tenancy by herself in order to qualify for certain benefits or rather to avoid his salary being taken into account and for Council Tax discount and credits.

4. The rent has been paid in full which is great, but you really need to reach out to her to ask what her plans are long term, would she prefer to use this to get into social housing for example?

5. You are very vague on the issue of Deposit Protection, yet it is a very clear binary choice, you either protected the deposit properly in accordance with legislation in one of the three approved Government schemes within 30 days and issued the Prescribed Information also within 30 days OR YOU FAILED.

You say it was taken and secured but that could mean you paid it into your own deposit account or that the Agent has it, that is not securing the deposit at all.

On the other hand you may have protected it in an approved scheme but failed on the PI.

For the sake of other landlords, with respect, "it wasn't registered officially" means that when you said it was secured you were talking BS.

Secured means secured in accordance with the Housing Act in a government approved scheme in accordance with the rules of the relevant scheme.

There are many ways it can go wrong, you (or an agent) can use an insurance backed scheme but fail to renew it. This is especially common when the agent is fired.

So it should be a custodial scheme every time, which is free.

Without further detail of what you mean we can just assume you screwed up.

There IS mitigation and you can settle matters without going to Court or even paying the minimum they are likely to get if they go to Court which is 1x the deposit per tenancy where there was not continual protection.

Have a look at the post below but first you might want to have a chat with the remaining tenant and ask them what their plans are, she may actually want you to issue an S21 (after first protecting the deposit of course).

https://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

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WiggyClaws 18th September, 2018 @ 11:09

We moved into a property let by an agent 6 years ago. We were asked to pay 3 months rent as a security deposit, which we did along with the first months rent. Now the agent says that the deposit is only partially protected as the rest was an advance rent payment. We have a contract that clearly states that £4450 was a security deposit, but only £1350 was ever put into a deposit scheme. The landlords are lovely and we are on good terms with them but we're very angry that the agent has done this. What recourse do we have? Is there any option other than to take them to court?

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Tim 18th September, 2018 @ 13:08

First of all @david, thanks for the response.

1. Both parties are liable for the original contract until it is legally terminated and for the subsequence SPT created if they do not leave the property if it expires.

SPT?

2. If one party leaves and it is the money maker as you refer to it, then presumably they will be making some sort of contribution to the mother for the children.

That is the suggestion but one can't account for human nature later down the line.

3. To remain in the property by herself the mother really needs a tenancy of her own, she will need to go through tenant referencing which includes affordability. It may be that the departing ex will agree to be a guarantor for that new tenancy. She will need this tenancy by herself in order to qualify for certain benefits or rather to avoid his salary being taken into account and for Council Tax discount and credits.

Quite and they would fail here

4. The rent has been paid in full which is great, but you really need to reach out to her to ask what her plans are long term, would she prefer to use this to get into social housing for example?

I believe that maybe her wish. I would need to clarify. What avenues does this open up though?

5. You are very vague on the issue of Deposit Protection, yet it is a very clear binary choice, you either protected the deposit properly in accordance with legislation in one of the three approved Government schemes within 30 days and issued the Prescribed Information also within 30 days OR YOU FAILED.

It was a fail and I did screw up. Personal issues got in the way and I simply forgot. However, its no excuse. Sorry for not being clearer. I wasn't aware of the custodial scheme and will look into it.

There IS mitigation and you can settle matters without going to Court or even paying the minimum they are likely to get if they go to Court which is 1x the deposit per tenancy where there was not continual protection.

Have a look at the post below but first you might want to have a chat with the remaining tenant and ask them what their plans are, she may actually want you to issue an S21 (after first protecting the deposit of course).

https://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

That is interesting too and I will read the post. What if the other party was to surrender the tenancy? What chain of events would that trigger?

Thanks again.

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David 18th September, 2018 @ 13:32

@WiggyClaws

If it looks like a duck and it quacks like a duck then it is a duck.

When money is taken as a security for the performance of a contract and that contract is a tenancy agreement, then it is called a deposit.

Unfortunately, the Landlord is the victim here too BUT they will have a right to counter sue the Agent.

I have had similar cases settled by the agent involved, the Landlord was very serious and the agent recognised that as the professional involved they were negligent.

Did the Landlord/Agent give you a three month holiday on the rent or do they still have it?

I working on a case at the moment where this very issue came up, the Landlord took separate deposits for different aspects of performance. The Act and the Courts see this for what it is and they count the unprotected amount as liable for sanctions.

So you can bring a claim for a multiple of £2700 being the unprotected amount. You said that it has been six years, so I imagine that there was more than one tenancy.

So the claim would be for between 1x to 3x the deposit for EACH tenancy agreement and the SPT counts as one tenancy agreement too, PLUS THE RETURN OF THE DEPOSIT.

There is no reason for you to lose out further just because the Landlords are lovely people but to advise them that you suggest they speak to their Solicitor regarding suing the Agent.

I would not advise putting too much information here on the blog as it may prejudice your case. Instead contact me via the forum and I will assess your claim and can help you with letters and paperwork. Check Post 608 above for directions on how to join the forum and PM me.

The goal would be a settlement where the agent pays for their negligence.

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David 18th September, 2018 @ 13:48

@Tim

If the Tenant leaves of her own accord she is deemed as intentionally making herself homeless and this will scupper her claim for social housing.

When the Tenant contacts the Council the very FIRST thing they ask is whether the Deposit was protected because they know that this can delay the claim for housing and they are desperate.

So what you need to do is get in front of this head on.

Ask the Tenant to meet you on neutral territory in a coffee shop, explain that you are sorry to hear about their personal circumstances having changed and you just want to know what their long term plans are. Do they want to use this negative event as a way to get into Social housing or do they want to have a new tenancy with guarantors and remain in the property.

Be aware that some couples split on paper in order to get into social housing, but that should not affect your decision.

This is a business matter, you would not let a property to someone who could not afford it, it would be reckless as it would force them into debt eventually.

As you say with splitting couples there is a lot of emotion and people use money and children to wield power, so having a guarantor is essential if they wish to remain in the property.

If the Tenant says she wants to stay then tell her you need notice from her and Ex to terminate tenancy giving the notice required in the agreement, say 30 days.

You then have her sign a new agreement immediately that commences the day after the old one expires and you have the Ex or someone capable, sign as a guarantor.

If she wants to go down the Social Housing route then you can come to an agreement with her alone to settle the claim (probably for £300 and a good reference) and agree not to authorise a claim by her ex. As joint tenants it requires both parties to bring or authorise the claim to be brought.

Then it is a matter of ending the original tenancy.

You also need to do an inventory with both parties so that you draw a line in the sand for any claim for damages on the property. If you left that till later the Ex will say she damaged it after he left.

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Tim 18th September, 2018 @ 14:10

If the Tenant leaves of her own accord she is deemed as intentionally making herself homeless and this will scupper her claim for social housing.

Indeed.

When the Tenant contacts the Council the very FIRST thing they ask is whether the Deposit was protected because they know that this can delay the claim for housing and they are desperate.

Again, yes indeed.

So what you need to do is get in front of this head on.

Ask the Tenant to meet you on neutral territory in a coffee shop, explain that you are sorry to hear about their personal circumstances having changed and you just want to know what their long term plans are. Do they want to use this negative event as a way to get into Social housing or do they want to have a new tenancy with guarantors and remain in the property.

We are almost at that point now the the individual in question cannot get the guarantors and as you have mentioned below. As you also point out it would be grossly remiss to take anyone that cannot support themselves. The other party has got guarantors but is happy to stay somewhere else until the dust settles.

If the Tenant says she wants to stay then tell her you need notice from her and Ex to terminate tenancy giving the notice required in the agreement, say 30 days.

You then have her sign a new agreement immediately that commences the day after the old one expires and you have the Ex or someone capable, sign as a guarantor.

As discussed, not appropriate but they may change their mind!

If she wants to go down the Social Housing route then you can come to an agreement with her alone to settle the claim (probably for £300 and a good reference) and agree not to authorise a claim by her ex. As joint tenants it requires both parties to bring or authorise the claim to be brought.

And I would assume that would have to be written officially somewhere? Otherwise they could simply go back on their word?

Then it is a matter of ending the original tenancy.

Via an S21? It has a month to go before it goes onto a rolling agreement but I have heard that it can be dissolved earlier if ALL parties agree? Should one let it roll over or nip it in the bud now?

My sincerest thanks again.

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WiggyClaws 18th September, 2018 @ 15:31

Thank you David, I'll contact you on the forum!

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Benji 18th September, 2018 @ 17:17

"If the Tenant leaves of her own accord she is deemed as intentionally making herself homeless and this will scupper her claim for social housing."

It might but it is a fallacy that it always applies.
Read the guidance notes.

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David 18th September, 2018 @ 17:28

@Tim

So you are too late to serve her a S21 because it must give at least 2 clear months notice.

On the day after their tenancy expires it will create an SPT so you need to act QUICKLY or else the sanctions DOUBLE.

First thing to do and I mean NOW is to protect the deposit, use the DPS and do it online in Custodial scheme.

Doing at soonest possible moment is deemed as mitigation.

Yes you definitely need a settlement agreement with one of the parties and there has to be a consideration, which I suggest should be around £300. I can help you draw up an agreement if you contact me via the forum.

Then meet her and ask her what she wants, one of conditions of the agreement will be her giving you her notice. Even if you sign a new 6 month agreement with her that is better than letting it roll over and doubling the sanctions.

Also the fact that the Ex will not sign as a guarantor suggests that you cannot rely on him for rent.

You may have to just accept that you are going to have to take a hit of at least 1x the deposit, issue the S21 and accept the consequences.

It is entirely possible to come to an agreement with the ex instead.

Go Protect that deposit, then call her, keep it friendly and ask if you can meet for a coffee to discuss the way forward.

DO NOT DO IT OVER THE PHONE, people are far more reasonable in person.

Do not assume that they do not know about deposit protection, if they do not know now they will imminently.

If they go to a claims company you will end up paying a lot more even though they actually get less. They are all about the fees.

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David 18th September, 2018 @ 17:38

@Benji

You are right in that different Councils have different Housing Policies and they do have a duty to the children.

However, I know of three Councils that because of age of kids have sought to house them via social services rather than the mothers.

It is a moot point because they will tell her not to give notice or else risk making herself homeless and to argue with that she needs to get legal.

Sadly Guidance is just that, Guidance, not law, albeit that many Judges revere it in absence of case law. Many Councils ignored the 400 page guidance on the homeless so a new law had to be brought in to force them.

The thing for the mother is she will want to keep the Council sweet, if you battle with a Council all the time they will meet their obligation by tinkering with the computer system and offering the worst three properties they have, then when you decline them they kick you off the list.

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Tim 18th September, 2018 @ 21:09

@David

"contact me via the forum."

I must be doing something utterly stupid, I can't work out how to....

thanks

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David 19th September, 2018 @ 07:23

@Tim

I do not know what you are doing wrong, try the following steps:

1. Click on "Landlord Forum" link at top of page or visit

https://www.landlordforumproject.co.uk

2. Join that forum (do not use a hotmail email as we have reports of it losing them, yahoo or gmail are OK)

3. Click on the link you get via email

4. Login in to the forum

5. Then click on the link below to private message me

http://bit.ly/davidpip

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Tim 19th September, 2018 @ 17:33

@david many thanks, message sent this morning.

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