UK Landlord Forum / Life

I am a first time accidental landlord. I have a property with a tenant. I was not aware of the deposit scheme, and left everything to the agent. I have nothing in writing to say that the agent would be responsible for putting money in the deposit scheme. I only received the deposit 4 months after tenancy started.

I now realise that the deposit is not protected as it should be.

i thinking of doing the following.

sending the money back to the tenant via bank transfer or cheque, and sending a letter to the tenant explaining  that the deposit was never placed in a deposit scheme and he is entitled to make a court order to claim back up to 3 times the deposit.

I am hoping that this results in the tenant settling this outside of court or, the judge being more lenient with me as i have no obligation to tell the tennant, he is not even aware, not sure if he knows what the deposit scheme is. I do not want this hanging over me as far as i know the tenant can bring a claim years down the line.

Is it this a good course of action? would the judge be more leniant, as it was a genuine mistake and i am furious at myself for being in this situation.

Kick yourself all you want, but only an idiot would intentionally open themselves up to being sued... or even paying compensation (in the form of an out of Court settlement) when there is a chance it might be avoided entirely. You certainly should not be advertising this fact.

Returning the deposit now is all well and good, but it would raise suspicions.

You do not state how long ago "I only received the deposit 4 months after tenancy started." actually is, but we're going to assume it's >30 days?

So, yes, you have fallen foul of the deposit protection.

Yes, you can be sued for between 1x and 3x the value of the deposit. If the Tenant sued then they would win and they would receive no less than 1x but no more than 3x.

If the Tenant does not sue, then you have nothing to do.

You could simply return the deposit in full at the end of the tenancy. If the Tenant is happy with that then they could just move on.

What a pity you just missed the amnesty by 5 days. You could still protect the deposit... you would be in no worse a situation, I suppose. There are some Tenants out there who aren't bothered at all by this and who aren't out to make a quick killing... only you know what type of Tenant you have, I suppose.

What is the value of the deposit?

When did the tenancy start and when did you receive the deposit (and who from?)?

When does the fixed term of the tenancy end?

Do you want to keep the Tenant on?

Thanks for the reply, when i say that i only got the deposit 4 months after tenancy started. the tenant paid it within 30 days to the Agency but agency only gave to me well after the 30 days were up.

the deposit value is £500 - the tenancy started in April 2014. and i got the deposit at the earliest September (this is still in dispute between myself and agency as to who has deposit. but i have an email confirming they have deposit in September 2014.

The fixed tenancy ended in april  this year. I do not want to keep the tenant on (but have not fully decided), and the tenant can be quite a handful. I feel it is likely that at some point IF i try to evict and from what i know i can only serve s.21 notice once i return the deposit which will raise suspicions.

The reason i feel he may be uncooperative is that 5 months ago i asked him if he would surrender the property ( i offered compensation, his reply was he will not move, not even after fixed term ends, his intention is to be difficult.

Any advise would be appreciated.

Consider...

Return deposit (traceable means).

Serve Section 21.

Evict (however long it takes).

Deal with the fallout. At least you know the maximum you can get 'hit' by is £500 (will have already been returned) + £1,500 (top penalty).

What if i write a letter advising that i have nto put the money in a scheme and that that is why i am returning the deposit. i will not mention he can sue me. if for example he does. do you think judge will look favorably upon this. 

Also what traceable means. i don,t think the agency has his bank details. as rent comes from council.

there is also another point. the Agency is unsure if a new fixed term was agreed in april 2015. (the agency discussed it but not sure if was completed). i never authorised this, and i am furious. if i ask the tenant again he will simply say yes. is it worth still returning deposit and serving section 21 notice.

You seem keen on writing a letter. I get that this is to try and mitigate any penalty. Who can predict what a Court will decide? All we know is that a Court must award 1x to 3x in the situation where a Landlord has not protected a deposit. The Court may decide your letter is a cynical attempt to influence them and if could backfire. I can't predict. I'm worried you may now have 2 fixed term tenancies where the deposit was not protected. I say write your letter if it makes you feel better... but please don't bank on it helping you (impossible to predict).

Traceable would, ideally, mean bank transfer, yes.

Fact is they paid the deposit.

Issue a S21, pay them the deposit back, how are they to know?

Thanks for the reply. Do i need to give them the deposit back before i issue the s.21 notice?

Legally, yes.

But your in the shit anyway.

If you give it them back first it looks odd, and may raise suspicion.

What I am saying is cheat, do everything normally, ie give it back when they leave.

It's not right, and if they kick off you wont have a leg to stand on, but as its the Agents fault, they may well not know.

I would, but then if you went to a solictor they would say give it back first, as they could stay the 2 months, and then say they wont leave as the notice is invalid, and then you would have to pay the deposit back and then give another 2 months notice.....

Your choice.

Thank you for the reply. id rather pay 3 times deposit (i have been advised by housing solicitor that it is rare for it to be 3, and most likely 1) than lose the 2 months if i have to re issue.

I am trying to give it back, but dont have bank details, im trying to give cash and get customer to sign. if that does not work what is the next best thing.

Drop a cheque trough the letter box. Keep a photocopy of the cheque.

Thanks boboff and hippogriff.

i have returned the deposit.

i want to send my section 21 notice asap.

Tenancy agreement was fixed from 11.04.2014 to 10.04.2015.

I have written the notice to expire on the 10th September 2015.

Will post, and hand deliver this today first class.

do you think this is ok in regard to the date.

the way i am reading it the expiry date mus tbe last day of the periodic tenancy which is the 10th of every month, and must be min 2 months. this is over 2 months.

Thanks.

I have just noticed that in the original tenancy agreement that was signed there is a notice to say that the expiry date is 10.04.215.

can it be done at the beginning of the tenancy?


can i commence court proceedings.

Calm down dear...

You got it right two months from the next rent day... 5th September is right.

Make sure you set it to them before 5th July.

Good luck

5TH SEPTEMBER. you mean 10th september and 10th july.

The tenant will not accept the deposit, agency assured me he was going to come and get it, but he hasn't.

If i drop cheque today through letter box. how can i prove that.?

also if i drop cheque today, can i then issue section 21 on Monday, or do i have to wait a certain time frame?

What ever.