How do I claim the tenant's deposit?

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    How do I claim the tenant's deposit?

    We have a house which was managed for us by a large agent. We had to ask our last tenant to leave as they owed about £2k in rent. Cleaning and repairs once they had gone came to about £900, so I thought it would be straightforward to get the £450 deposit money, but as the tenant has failed to respond to the agent, it has dragged on. The deposit is held by MyDeposit,and when I asked them, they gave a time frame of 90 days for a response. So it's now over 100 days, and I contacted the agent this morning to see what will happen and this is the reply.



    My|Deposits only protect the funds for 90 days after the expiry date of the tenancy, which means that after this has expired the tenants can no longer raise a dispute through their adjudication services.

    However, the tenant can still pursue this through the courts for 6 years after the expiry of their tenancy. This is why it is stated that if the tenant does not continue with the services provided by My|Deposits, that you go through the court system as this voids the tenants claim on the deposit completely if the funds are awarded to you.

    My colleague has continued to chase the tenants, but so far, we haven’t had a response.

    I'm not really sure what she is saying.I don't think the tenants will ever respond. Do I have to take legal action to claim this money?

    #2
    Who is actually holding the deposit? The cash I mean not the scheme.
    I offer no guarantee that anything I say is correct. wysiwyg

    Comment


      #3
      I replied to the agent this afternoon asking the very same question!
      I'll post as soon as I get the answer (although answers aren't their strong point!)

      Comment


        #4
        Here is the e-mail I sent

        Thank you,but I'm afraid it is still unclear to me as to what I have to do to have this money returned to me. I have always thought that the deposit was to cover any damage or repairs to the property on vacation, and in this case that amount certainly outweighs the amount of the deposit. I feel it is unlikely that the tenant will ever respond. Why would she bother?
        Are you saying that court action is now the only course of action?
        Please confirm who is holding this deposit now.

        and here is the reply received this morning

        In order to have any deposit funds refunded you must have one of the following;

        The tenants authorisation
        An adjudication from My|Deposits
        A court order

        The deposit is held by Countrywide as a stakeholder for the purpose of being able to be used in order to aid in the repair of anything caused by the tenants negligence. However, in order to use any of the deposit funds to contribute towards the work required, you have to prove that the tenant has caused this beyond any reasonable doubt. The new legislation surrounding deposits state that in order to prove this, they will accept one of the 3 items listed above – otherwise you as the landlord have not proven any legal claim on the deposit, and therefore should not receive any of the funds.

        My previous email explained why My|Deposits will inform you that after 90 days the tenant does not have a claim – because the tenant can no longer proceed with an adjudication, which is provided by them. If this service is eliminated and the tenants will not provide their acceptance, then the only way for the deposit to be released is to proceed through the courts. As previously stated, the tenant has up to 6 years after the expiry of their tenancy in order to come back and claim the deposit – so if this isn’t allocated with legal backing, then the tenant can sue for further losses should they choose to do so. This is why a deposit claim should go through the courts in order to ensure that the tenants can no longer counter claim the allocation subsequent to the court hearing within their statutory 6 years.

        I hope this helps.


        It doesn't help me at all, I'm none the wiser.

        Comment


          #5
          I know nothing of 'my deposits', I don't use them, however there must be a single claim process where the tenant does not respond.

          Anyone know?
          I offer no guarantee that anything I say is correct. wysiwyg

          Comment


            #6
            Yes, I have seen the term 'single party claim process', but can't seem to find any info on how to go about it. I think this must be to what my agent is referring when she says 'through the courts'.

            I wonder if there is much cost involved. We are only after £450 deposit but at the moment I would be happy to come out of it with something rather than nothing.

            I also wonder what would happen to the money if the tenant never responded and I took no action.

            I seem to be able to find lots of info for tenants with non-reponsive landlords, but nothing when it's the other way round!

            Comment


              #7
              The cash is held by Countrywide, who are supposed to be working for YOU.

              I can see no logical reason why they are withholding it (in its entirety) from you. 'My Deposits' have an arbitration scheme, the courts are a form of arbitration, I can not see that a mere agent has any arbitration role as they have no such authority.

              This is not something I have encountered in the past, but I think a letter to the agent saying cough up or else would be in order.

              Comment


                #8
                I have just spoken to the lady dealing with this and she says that there is still no response from the ex-tenant and Countrywide are not able to release the deposit to me unless I go through the small claims process (or do nothing and wait the 6 years mentioned in her e-mail). She estimated a cost of £60-70 and is sending me the check-in/check-out details.

                I have tried ringing My Deposit all day Friday and today to see what they say, but no-one's answering the 'phone.

                Comment


                  #9
                  The issue that that the agent is not simply holding the deposit on behalf of the landlord, but is doing so as a stakeholder. As such he cannot safely release the deposit to either party without the parties' agreement, or a court/adjudicator's decision.

                  See:
                  http://blog.painsmith.co.uk/2011/04/...e-stakeholder/

                  Comment


                    #10
                    Easiest thing to do is to issue a claim form against the tenant - go to money claim online to do that.

                    Chances are your tenant will not respond and you'll get a "judgment in default". i.e. a court order in your favour. You may have to wait another couple of months.

                    Comment


                      #11
                      Thank you both for those replies. I think I will be going ahead with a small claim, I was just uneasy that the agent might be pulling a fast one!

                      I rang Money Claim Online, they have said not to do this one on-line,but download the form and send it in to the court. It's only £50 fee, not as much as I thought it would be.

                      Comment


                        #12
                        What is missing from the Painsmith blog is emphasis on the fact that when an agent accepts a deposit as stakeholder he takes on obligations. Those obligations, subject to agreement to the contrary, effectively put the agent in a quasi-judicial or fiduciary capacity. The best way to put it, though it may seem an odd way of putting it, is to say that the stakeholder's obligation is to the deposit - that is his duty is to ensure that the deposit goes where it ought to go. The agent cannot simply sit back and wait either for the tenant's authority to release the deposit or the decision of the court in an action between landlord and tenant. Whilst in practice he may be entitled to await the outcome of discussions between landlord and tenant, once either makes a demand he must either (a) apply to the court for directions or (b) look into the matter and, using his skill and judgement, decide how to apply the deposit. If the case is clear cut, he runs the risk of costs going against him if it gets to court. Agents accepting deposits need to realise that they take on a potentially onerous obligation.

                        Comment


                          #13
                          Originally posted by AmandaB View Post
                          I was just uneasy that the agent might be pulling a fast one!
                          Not a fast one, but still quite a quick one, probably arising from a weak grasp of the law.

                          Comment


                            #14
                            Originally posted by AmandaB View Post
                            I rang Money Claim Online, they have said not to do this one on-line,but download the form and send it in to the court. It's only £50 fee, not as much as I thought it would be.
                            And you should request that, should you win, the fee be awarded to you and added to what tenant owes you.

                            Comment


                              #15
                              Oh yes, I hadn't even thought about asking for the fees to be added to her bill!
                              As I said in the beginning, this lady also owes about £2k in rent, so I think we may try a claim against her guarantor for that. The agent keeps fobbing me off saying they are still trying to contact them, I'm getting so tired of it all.

                              Comment

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