Deposit Oversight

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    Deposit Oversight

    Hello
    My tenant wants 3 months payment because i registered her deposit outside the 30 days limit
    She's one of these people that likes to take advantage i think - she just turned rude all of a sudden and stopped paying her rent, out of the blue
    1. Should i pay her the 3 months?
    2. If i pay her back her deposit, can i serve a valid s21?
    3. She's over 2 months in arrears, can i serve an s8 eviction on her? Or can't i due to the deposit issue?
    Thanks



    #2
    1. Your choice, that's the maximum possible award if it went to court. I wouldn't start at the maximum.
    2. Yes
    3. Yes but a section 8 isn't an eviction, it allows you to seek posession in court.
    "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

    What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

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      #3
      As above but;

      2. Yes, less agreed deductions.

      (sorry to be pedantic Wanna, just thought it worth mentioning)

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        #4
        Neither is s21 an eviction Order.

        Comment


          #5
          Repaying the deposit offsets any missing rent, so it's likely no actual money will pass through hands but be aware if this then takes her back to less then 2 months rent you cant use s8.8. You can use use s8.10 & probably .11 & .12 still.

          The deposit 'fine' is a separate issue, she just fills in her forms & take that to court its a simple enough process but it takes time again she's not going to see real hard cash as it'll just offset her arrears. She will receive at least 1x deposit so it maybe worth trying to agree a full&final payoff for her to go

          Comment


            #6
            2) If you in addition to failing to protect the deposit, failed to provide the "How to Rent" booklet, EPC and Gas Cert (if relevant) before the start of the tenancy it is unlikely that you can go the S21 route.

            Comment


              #7
              Hello
              Rather than risk a 3 month deposit fine, i agreed to pay the tenant a 1.5 month deposit fine
              How do i account for this in my book keeping?
              Would it be termed a fine? Could i right it off as a company expense?
              Thanks

              Comment


                #8
                You can't expense a statutory fine (or settlement in lieu of one) for non-compliance with the law.
                I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                I do not answer questions through private messages which should be posted publicly on the forum.

                Comment


                  #9
                  Make sure you get it in writing that you have settled the issue with a financial penalty otherwise she could still take you to court for the deposit not being protected.

                  Comment


                    #10
                    I doubt HMRC would see a penalty for flouting the law as a legitimate expense. You'd surely not claim for a speeding fine incurred travelling to visit your esteemed tenants?
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim42515

                      Civil proceedings


                      A revenue payment, in settlement of a civil action arising out of a trade, may be allowed as a trading deduction where the allegations were neither admitted nor proved (see Golder v Great Boulder Proprietary Goldmines Ltd [1952] 33TC75). Where liability was admitted or proved, a deduction may be allowed where the payment was restitutionary, but not if it was punitive.

                      Comment


                        #12
                        Voluntary payment (not imposed by a Court, is not a fine/penalty, but a business decision.

                        Comment


                          #13
                          A payment, in settlement for an action for a statutory penalty arising from an alleged landlord infraction of the law, is not an expenditure incurred wholly and exclusively for the purposes of the trade.
                          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                          I do not answer questions through private messages which should be posted publicly on the forum.

                          Comment


                            #14
                            I don't agree with that view.
                            It is entirely a business expense, albeit caused by bad management, but would not have arisen without the business activity.
                            The level of the expense is negotiated as a business matter and it is neither a fine or a penalty. It is an agreed payment in exchange for something.

                            If a boiler fails because the business manager decides not to maintain it regularly, its replacement would be an allowable expense, even if avoidable and due to bad management.

                            If a court imposes a penalty on an individual, that expense is not allowable, as a matter of HMRC policy.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              Originally posted by theartfullodger View Post
                              You'd surely not claim for a speeding fine incurred travelling to visit your esteemed tenants?
                              The OP has not incurred a fine.


                              Comment

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