UK Landlord Forum / Life

Hello there,
I have just come across this super blog/chat forum and hope you can help or offer some form of support to my case.
I took on two tenants in my one bed property in February 2020. I was no aware, like so many, about the TDS. I am sure the tenants were and by August 2021 I got played! 
I had somehow become friends with the tenant however, and it was not nasty, but I realise now she must have known exactly what she was doing.
She made a note of all the issues the property had suffered and in August 2021 she informed me that she would deduct £50 from every month they had paid rent to cover their August month, and then told me to use their deposit for the September rent and they would vacate on 1st October 2021.
They are still there!
I have not been paid any other deposit or renegotiated the contract with them, apart from complying with their reduced rent (£100 less than what it was).
We actually continued to be friends, believe it or not, and her life has become increasingly challenging, thereby meaning I have had to wait and wait and wait for them to vacate.  I think in fact it has all been a play to stay living in a lovely furnished property, without any deposit to me, at a reduced amount to what was signed for in the original contract.
So, just after Christmas 2023 I served them a Section 21 notice with 4 months notice.
My question is - is this now allowed, since I no longer have their deposit? I believe it is. However, more importantly, given what has taken place, not to mention that they have now not paid their January rent, could they still take me to court based on these facts?
I would have thought their case was weak, having now missed their January rent.
I am in a little turmoil over it as she is now mentioning this on email, while I have tried to chase their January payment.
Thank you so much in advance and look forward to feedback on my case.

If the deposit has been returned (by being used in lieu of rent), your section 21 notice is not invalidated by the issues with the deposit.

The tenant can make a legal claim for a penalty for your non-compliance with the deposit regulations for up to six years from the original deadline to protect the deposit. The claim process is quite expensive and complex, so it's more likely the tenant will try and use a no win no fee claims company to threaten you into settling rather than actually going to court.

Not being aware of the need to protect the deposit is a concern, because that's been a requirement for nearly twenty years, and there are lots of other things that need to be done before and during a tenancy that can invalidate a section 21 notice (there's a sticky thread with a checklist on this forum).

Thank you for coming back to me on this so swiftly.  This was my concern as I had no idea of the implications.
Yes I am a new private landlord not having rented long term before, so although I supplied them with a contract and inventory list, I had no clue about the TDS.
Turns out however that she did, but has only now mentioned this to us because I have served Section 21.
She has not paid rent for January, so I guess if another rent is missed I too should have some legal standing as well.
Thank you for your help.

I just need to add also that I did have their deposit in a bank vault, Starling, which is insured up to £85K. I read somewhere that you can deposit the money in an insured account, which surely this would be considered, but I failed to offer them the relevant paperwork to show this.   

Now, the deposit has to be protected with one of three government approved schemes (and it can be insured or actually deposited). And specific documentation has to be given to the tenant to confirm this.

The deposit is being protected to keep the tenant safe from you deciding to keep it, amongst other things.

I feel for your situation but still can't get my head around people in 2020 spending less time researching what's needed to rent a house out than they would reading Trip Adviser reviews of a hotel they were looking at.

From my perspective and in my defence, if you haven't heard of something like this before, which nearly everyone I have spoken to has not given they do not rent property, I did not think to look into this. I simply put my property up for long term rent for the first time, not through a letting agent, and assumed I would need to keep their deposit safe in my own bank account - ie safe vault, which I did. Never heard of a TDS in my life so no clue to research it. Trip Advisor I have heard of so it would be logical to look into that if I was researching hotels etc. At that time I expect I was watching the news like millions of other people around the world, desperate to get my property rented without even thinking. Thanks though.

Thank you JP Keates for your help and feedback, it's really appreciated. 

I think the situation I am in is tricky because I am dealing with a tenant that has done this countless times.  She knows about the TDS but says nothing, waiting patiently for the 30 days to pass in order to gain the upper hand.  She did not ask for the paperwork, and surely it is also in a tenants best interest to ask for this as well, this is the legal loophole that gets me slightly.  She knew yet said nothing, and she became friendly with me immediately after signing the contract, so I suppose had it been roles reversed I would have requested this to protect us both.  She on the other hand played the game and is now able to be underhand in her approach. It is a sad state of affair really.

But thank you so much - I do see the legal implications of it all.

Quote from: Katmcd09 on January 09, 2024, 01:12:07 PMFrom my perspective and in my defence, if you haven't heard of something like this before, which nearly everyone I have spoken to has not given they do not rent property, I did not think to look into this.

Sorry, but this is frankly hard to believe.

You talk specifically about not having heard about TDS and therefore you didn't think to investigate it. But if you Google "How do I rent out my property" (or any number of similar searches), then the very first results you get are are the GOV.UK 'Renting out your property: Landlord responsibilities' pages and hundreds of other results about what you need to do when letting a property.

There is so much more that is your legal responsibility than just protecting the deposit, so what else have you failed to do?

How can you possibly have started out knowing nothing about letting and not have done any investigation at all?

Please stop trying to pin any blame for this aspect of your situation on the tenant.

Unfortunately this is the truth. I naively rented the place out in desperation for an income at that time and advertise on Gum Tree out of all places!  I assumed I simply ask for a months rent plus first months rent, as it was when I rented years ago. Now I learn this has been around for 20 years, but as a tenant I never knew about it back then either, and it was within the 20 year time frame. It was also a brand new property, but I had been operating it as a holiday let, so this was my first time as a long let. It did not even occur to me in my ignorance to look on the Government website for information.  The property being brand new was completely up to date in all respects, the boiler check, the EPC, gas certificate etc, so I naively assumed I would just maintain their deposit in a secure bank vault, which I did and never touched.  The reason I push a little blame her way now is because I have since found out that she has done this many times with previous Landlords that have either knowingly not used a TDS or have been in my similar ignorant position.  The local letting agency won't touch her. This is just a recent fact I have discovered, and THIS is why I am now concerned. But thanks for the unhelpful comments, and just coming at me on the attack. I came here for support and advice, not judgement.

I also supplied a full inventory of the property, and of course a contract. To me this was exactly what I had done when I rented and therefore being a privately rented accommodation assumed, ignorantly, that this was the same standard practice for renting.

You also need to have supplied the correct version of the How to Rent guide, a copy of the property EPC and (if there's a gas supply) a copy of the Gas Safety Certificate otherwise your section 21 notice is invalid.

You need to have passed an EICR (an electrical safety test), checked the smoke alarms were working on the 1st day of the tenancy and the EPC needs to be at least E otherwise you can be fined by the council (although that's very unlikely).

Some of these have been new regulations in the last few years, so relying on your previous experiences as a tenant isn't likely to be enough.