UK Landlord Forum / Life

Hello,

I'm new to the forum and have a question on DPS law.

I never secured the deposit made by my tenants back in 2013. I will need to serve them notice soon and am afraid that it will be an issue. Not because we have any problems, we've both got on well during the time, but because I am in a vulnerable position.

My question(s) are, should I quickly make a deposit into a scheme now, or will that risk flagging the issue causing them to look into it? Or if I make the deposit now can I withdraw it in a couple of months time or will it be forcibly held longer i.e. for minimum tenancy duration etc.?

I'm tempted to sit tight, hope it won't come up, then just pay them the deposit back. But if I can deposit the money now and act natural then that will help me sleep a bit better at night, though I'd still not be out of the woods.

Any advice? Thanks so much in advance

You may well find that the tenants you've got on so well with are less warmly inclined when you give them two months' notice to get out. You can't serve a valid Section 21 notice without protecting the deposit and issuing the Prescribed Information.

Even if your tenants don't know that at the moment, the first thing they'll do when your Section 21 drops onto the doormat is Google "What is a Section 21?", whereupon they'll find out that it's not valid if the deposit's not protected.

At that point, they'll Google "Is my deposit protected?", whereupon they'll find that a) it isn't, b) you're liable pay them a penalty of 1-3 x the deposit for each tenancy where it was unprotected or you didn't issue the Prescribed Information and c) there are lots and lots of no-win, no-fee companies who are very keen to help them.

This, from you point of view is sub-optimal, to say the least.

I reckon your best bet is to be pro-active. Work out what your maximum and minimum exposure would be if it goes to court. Protect the deposit, serve the Prescribed Information, come clean to your tenants about your mistake and make them a generous offer in full and final settlement - a nice lump sum, a glowing reference, flexibility over the move date etc. Get it in writing and get it put to bed.

Thanks for your swift reply Simon. Yes, the more I read on this subject here in the forums the more I see my options are like you say all sub-optimal. Discovering that his infraction can be charged against me for up to 7 years after our contract ends I will have to go with the proactive approach.  Appreciate your help and sorry for asking a question I can see gets asked ad nauseam.

Good advice.