Deposit that's not a tenancy deposit

[security2]

Can anyone help with this query that's come up today.

Tenants are in mid-tenancy, all is well. Deposit was protected as required etc. All good so far.

One of the tenants has lost their key fob for the communal door. The managing agent requires £10 for a new fob and £90 as a deposit for it. Deposit returnable on return of the fob. But they need the payment from the leaseholder (i.e. me), they can't accept anything from the tenant. Fair enough, to expedite things, I paid the managing agent and tenant has paid me. New fob issued, tenant is happy.

What to do with the money? At end of tenancy, tenant needs to return the fob supplied at start of the tenancy. The one they had is lost, so they will supply this replacement. But they know it cost £10. However it has cost me £100.

So can I validly charge them £100.

Tenant knows £90 is deposit that the managing agent holds. And they have paid this to me. I don't want to get into problems with deposits and protecting it... Can this be seen in any way as a tenancy related deposit?

Am I over complicating this?

[Wannadonnadoodah]

I don't think you're over complicating things with the way deposits have gone and are right to be paranoid. Do you have paperwork from the supplier and something signed from the tenant creating an audit trail?

[KTC]

“tenancy deposit”, in relation to a shorthold tenancy, means any money intended to be held (by the landlord or otherwise) as security for—
(a) the performance of any obligations of the tenant, or
(b) the discharge of any liability of his,
arising under or in connection with the tenancy.

So... possibly? I think it would had been better if you had nothing to do with it, and had let the building management sort it out between themselves and the tenant.

[security2]

KTC - would have preferred that to be the case. However the managing agent, understandably, can only give keys to the building to leaseholders.

Wanna - there is an email audit trail of what went on. It's clear what the money is for.

I'm inclined to issue a receipt to the tenant for the full £100 as payment for a new fob. So thereby not referring to it as a deposit. If they accept, the problem goes away. If they don't, then yes, I'm paranoid!

[leaseholder64]

So... possibly? I think it would had been better if you had nothing to do with it, and had let the building management sort it out between themselves and the tenant.

The building manager has no legal relationship with the tenant, and if this is the sort of arrangement that landlords, with no registration of sub-lets, may not even know who the tenant is.

[mariner]

Get a detailed Invoice from MA for 100 pounds. Fob is returnable to LL at end of T as replacement for lost fob.
I would just charge T 100 pounds for replacement of nec electronic key.
100 GBP is NOT a deposit.IMO.

[jpkeates]

We're operating at the limits of paranoia now.

The £90 is a deposit. If the tenant doesn't return the fob it's going to be kept by the landlord as compensation, so it's money held against a possible future liability.
It's in relation to a shorthold tenancy, so it should be protected.

If you treat it as a purchase of £100, you can't "decide" to give it back later.
You could (possibly) agree to buy the fob back for £90 at the end of the tenancy, I guess - but that doesn't stop if it being a deposit (my view only).

Whether or not any of this matters, or if a court would see it that way is something completely different, of course.
I'd suspect nothing would come of the issue either way.

One issue would be how you account for the cost for tax purposes...

[DPT57]

I think you charge the tenant £10 now and if they lose the fob you claim the £90 from the regular deposit at the end of the tenancy or you sue them for it.

[Kape65]

I don't understand why you have to pay £10 for the fob PLUS a deposit, doesn't make sense. You can hardly return the fob to get your £90 back when you need to give it to your next tenant. If you charge the tenant £100 for the fob then it belongs to them, in fact if you charge them £10 it belongs to them. It's mental!

[Ted.E.Bear]

It's not really a deposit, it's just a way to make the ridiculous charge sound more palatable. (i.e., they typically cost <£2 and take <2 minutes to program).
When would you be able to get the deposit back - when they demolish the building?

[MdeB]

Is this a case of:

1. Original fob issued to you at a cost of £10 + £90 deposit
2. original fob given to tenant and lost
3. new fob issued at a cost of £10 + £90 deposit and given to tenant as replacement?

If so, then it is compensation for the loss of the original and is putting you back in the position you would have been in had the fob not been lost.

It seems to me that the £10 is an admin charge for the work in replacing the fob, and the cost of the fob (to you) is £90.

[Berlingogirl]

I agree with MdeB. The cost to the tenant is £100 because they lost the first fob so the deposit was lost too.

[nukecad]

I believe that you're over-thinking this.

There are 2 seperate transactions here.

You pay the agent £100 for the fob. (£10 + £90 deposit).
You get £90 returned from the agent if/when you give it back. (Which you won't because your next tenant will need it).
The fob is now yours.

Your tenant pays you an amount for the loss of the previous fob.
I'd say £100 because if he loses it again it will cost you that much for another.

The tenant has not paid any deposit, he's paid a £100 charge for a replacement fob.

If he loses it again he pays another £100 for another replacement, which might make him more careful.
(If he takes it with him when he leaves charge another £100).

Of course the agent supplying you with fobs is making a large profit each time, but that's a different issue.

[AndrewDod]

None of this makes any sense.

Freeholder issues keys to lessees. Lessees pass them on to tenants.
Freeholder has nothing directly to do with tenants of lessees. Nor should they require any return of keys/fobs - tenant returns communal keys to landlord.

Unless it says otherwise in the lease.