Previous landlord didn't put deposit in Tenancy Deposit Scheme

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    Previous landlord didn't put deposit in Tenancy Deposit Scheme

    Hi forum,

    I recently bought a BTL property from an existing landlord and something rather concerning has come to light. It appears that the previous landlord didn't put the deposit into a government-backed Tenancy Deposit Scheme, as required by law. Furthermore, this fact didn't come up during conveyancing by either the seller's solicitor or my solicitor.

    So I find myself in the situation that the previous landlord has my tenant's deposit! I could happily write expletives about both the seller and solicitors for this, but I'd rather be constructive and try to understand the law in this situation and what can be done to rectify the situation.

    I think my first action will be to try to contact the previous landlord and simply tell him the situation, make it clear that he broke the law and ask him to either put the deposit money in the TDC scheme or give it to me and I will put it in the scheme.

    My concern is that he could of course ignore the request and leave me in a pickle... In that case, does anyone know what the rights and responsibilities of the various parties are here? And should it come to the worst and I have to take legal action, how would I go about it?

    Thanks,
    BTLdoc


    #2
    When did the tenant's tenancy start with the previous landlord?
    Did the previous LL live in the property? edit - at the same time as the tenant

    What does the tenant say about the situation?

    Is this in England?

    Comment


      #3
      Hi Berlingogirl, thanks for your reply. To answer your queries, the tenancy started last August. No, the previous LL never lived in the property. The tenant doesn't yet know about this. And it is in England.

      Comment


        #4
        Just to clarify - did YOURs start in August or the previous landlord's?

        Comment


          #5
          The previous landlord's tenancy started in August 2017, running to end of July this year. Although I've taken it over since last month.

          Comment


            #6
            In either case I think you're going to have to tell your tenant that they have no deposit with you. I'd offer them a payment plan for the deposit if they can't pay it in full all at once. I would leave it to the tenant to sort it out with the previous LL. If the tenancy with the previous LL is an old one (can't remember off hand how old it has to be) the deposit didn't have to be in a scheme.

            Comment


              #7
              OK, it should have been protected. Did they definitely pay one?

              Comment


                #8
                I don't want to upset the tenant, to be honest. They're not bad tenants, so I'm not overly worried about getting yet another deposit, that would feel like punishing them for what the previous landlord has done. I just want to get the original deposit back! They definitely did pay one, I have the original AST and the letting agent confirmed this. Also, it's anything after 2007 that has to be in the scheme, so this is clearly the case.

                Comment


                  #9
                  Erm.... http://www.landlordlawblog.co.uk/201...enant-in-situ/
                  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.

                  Comment


                    #10
                    Hope the purchase took place less than 30 days ago as YOU are responsible for that deposit you never got and YOU need to have protected it within 30 days of taking over or you are liable for the up-to-3xdeposit penalty (**). And any s21 will be invalid. Because in law the new landlord takes on the benefits and liabilities of the old landlord -
                    as noted in that old favourite, s.3 Landlord and Tenant (Covenants) Act 1995.
                    Your solicitor/conveyancer should have known about this, assuming you ensured you hired one who understood change of ownership AND landlord/tenant matters.

                    ... see
                    http://england.shelter.org.uk/legal/...ge_of_landlord

                    Further, hope you have served notice(s) compliant with s48 & s3 or....
                    - s48 - no rent due (!)
                    - s3 possible fines and criminal offence, and you won't be entirely "the landlord" without a complaint notice.
                    Your solicitor/conveyancer should have known about this, assuming you ensured you hired one who understood change of ownership AND landlord/tenant matters.

                    .. see...

                    http://england.shelter.org.uk/legal/...rds_identity#3
                    Requirements when change of landlord


                    If there is a change of landlord, the new landlord must provide the tenant with her/his name and address in writing:[8]
                    • within two months after the transfer of interest in the property, or
                    • no later then the next day that rent is payable, where this is more than two months after the transfer.

                    If this is not complied with, the old landlord will remain liable for any breach of the tenancy agreement until either s/he or the new landlord provides the tenant with the new landlord's name and address.

                    If the new landlord does not comply s/he can also be prosecuted by the local authority and a fine of up to £2,500 can be levied in the magistrates court.[9]
                    Ouch! (I suspect... sorry...)

                    ** Not sure there's been a test case on deposit penalty yet: Wouldn;t want to be that landlord...
                    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
                      Thanks for all the replies. If I have become liable, I'm interested that there are suggestions that my solicitor was at fault. I will still attempt to recover the deposit directly from the seller, but otherwise may have to take action against my conveyancing solicitor, sadly. I'd rather not, but it was clear negligence on their part to ignore the tenant's deposit and legal consequences during the transaction.

                      Comment


                        #12
                        Originally posted by BTLdoc View Post
                        may have to take action against my conveyancing solicitor, sadly. I'd rather not, but it was clear negligence on their part to ignore the tenant's deposit and legal consequences during the transaction.
                        Were they made aware that you were buying with a tenant in place?

                        Comment


                          #13
                          Originally posted by MdeB View Post

                          Were they made aware that you were buying with a tenant in place?
                          Absolutely! They apportioned rent and service charge etc from the existing tenancy.

                          Comment


                            #14
                            It's going to be close to impossible to claim the money from the seller.
                            It isn't your money, it belongs to the tenant.
                            Which makes the claim quite complicated.

                            The liabiility to repay the deposit became yours on completion.
                            If that was less than 30 days ago, protect an amount of money equal to the deposit and serve the tenant the Prescribed Information.

                            If it was more than 30 days ago, if it were me, I'd give it back to the tenant and explain that the previous landlord didn't protect the deposit and that's why you're returning it.
                            That way you might be able to point any claim for the penalty at the previous landlord.

                            There are other things that should have been done at the start of the tenancy and I would check with the tenant that they were, and if they weren't, do them now.
                            Hopefully, the tenant might consider this new landlord an upgrade on the old one.

                            And make sure you serve the correct notices to confirm you are the landlord.
                            If the conveyancer missed the deposit, chances are they missed that as well.
                            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
                              Understand previous tenancy started Aug 2017. But when did tenant 1st move in please?

                              Did YOU ensure all the things were OK, assuming an AST (not certain yet..), for an S21 notice to be valid - apart from deposit protection? e.g. had a valid Gas safety cert been served on tenant prior to you taking over/completing? See
                              https://markprichard.co.uk/content/d...ecker-tool.pdf
                              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

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