Landlord Getting Sued For Deposit

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    Landlord Getting Sued For Deposit

    I hope someone on this forum can help.

    I am a UK amateur landlord living abroad. I recently had a tenant moved out without a problem and I refunded 100% of her deposit shortly after she vacated the flat. Stupidly, I forgot to register the deposit of over GBP 1,500.

    I just received a letter from her solicitor. My former tenant is now suing me for nearly GBP 15,000 saying this is 3 times the deposit and for failing to register the deposit for three times she renewed the tenancy.

    I thought the law capped the maximum value of the penalty at 3xDeposit and NOT 3xDepositxRenewals of tenancy.

    If I am on the hook for something I would rather be on the hook for GBP 4,500 than GBP 15,000. Is her solicitor correct? Or is her solicitor trying it on?

    Any help much appreciated. Helpful answers only pls.


    Many thanks,.

    #2
    If you are saying that you never protected the deposit at all then the solicitor is correct.

    It's up to 3x deposit for each tenancy that you neglected to protect it.

    https://www.checkmydeposit.co.uk/
    If you have more than one tenancy with the same landlord and they have failed to protect the deposit each time, you may be entitled to multiple compensation sums.

    But has the solicitor missed something there? - You said 3 renewals so that would be 4 times you didn't protect the deposit at all. (£18K maximum penalty)

    If it gets to court then she may not be awarded the maximum amount, but do you want to risk it?

    You could always try to negotiate a lower amount in full and final settlement before it gets to court.

    Comment


      #3
      As Nukecad says, I’m afraid you have no defence and will be at the mercy of the judge as to whether it’s the lower or higher end of the penalty scale.

      Better to try and settle if you can.

      Have you been paying your tax correctly? Is everything in order with any current tenancy you have ongoing?

      Comment


        #4
        Not much help with your present situation, but don't take a deposit in future. There are too many pooh-traps for the unwary.

        Comment


          #5
          Thanks guys. As I recall I am on the hook for just over 14k Sterling in the claim. Any suggestion on how much I should settle for? Anyone have experience in this regard? The tenant has suffered no injury of any kind and I am told this will take six months to go to court. Maybe go to GBP 7k? Suggestions welcomed...

          Comment


            #6
            Oh, I'd only offer 3 times one deposit (£4500) , and see if it gets accepted. Maybe sending a cheque for that amount might see it accepted.

            Comment


              #7
              How do you forget to register a deposit?

              Comment


                #8
                Originally posted by davett View Post
                How do you forget to register a deposit?
                When you believe the Deposit Fairy has done it for you..........



                Freedom at the point of zero............

                Comment


                  #9
                  I'd offer the lowest end of the penalty (1 times the value) times the multiple of the instances.

                  Not protecting the deposit but returning it isn't the worst thing that you could have done.
                  And the three times penalty is the highest penalty and should be applicable to the worst offenders.

                  The more you negotiate, the higher the legal fees will be (and they can easily exceed the penalty.)
                  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


                    #10
                    Originally posted by davett View Post
                    How do you forget to register a deposit?
                    I’m not defending the OP, the law is the law after all. But there will be thousands of landlords up and down the country who will be in a similar position merely through ignorance.

                    It’s staggering the amount of people I speak to who are landlords but have done nothing more than put a few pictures on Gumtree or Facebook and then taken a deposit and first months’ rent from someone they barely know before handing over the keys.

                    Almost none of these people know anything about EPCs, How to Rent Guides or Right to Rent checks.

                    Most of them want a medal when they proudly tell you, “I know I have to get the boiler serviced.”

                    🙄

                    Comment


                      #11
                      Originally posted by HantsAgent View Post
                      I’m not defending the OP, the law is the law after all. But there will be thousands of landlords up and down the country who will be in a similar position merely through ignorance.
                      I've run into a lot of people like that, too.

                      I don't get it, though.
                      How can people imagine that there aren't regulations and things that it might serve them well to know before they start.

                      It's the one argument that leans me towards mandatory registration for all landlords.
                      That there could be some way of at least giving people a basic checklist (like the one on moneysavingexpert) which might give them a clue.

                      (And it would pay for itself in more tax being collected).

                      But any government would get overcomplicated and add in a load of other rubbish.
                      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


                        #12
                        Originally posted by awharton04 View Post
                        Any suggestion on how much I should settle for?
                        That's not up to you now, you can make an offer but your ex tenant holds all the cards and can settle for what they want.

                        Or you can go to court and the judge will set the amount you have to pay.

                        Originally posted by awharton04 View Post
                        The tenant has suffered no injury of any kind
                        That's not the point, it's not a compensation scheme - it's a legal penalty for you not complying (multiple times) with the law.

                        Think of it as a fine for breaking the law, but instead of having a regulator to enforce the law the government leaves it to the tenant to enforce.

                        That the tenant gets to keep the 'fine' is an incentive for them to police the law for the government.

                        In it's way it works, you're never going to leave a deposit unprotected again are you?

                        Comment


                          #13
                          Letting out a property is a business activity, and the court treats it as such. Ignorance of the law is no defence in general anyway, it's certainly no defence when we are talking about regulations in relation to someone carrying out a business.

                          If this goes all the way to court, not having protected the deposit at all is going to move the penalty towards the higher end of the range. It was however returned (promptly?) in full, which perhaps may help towards the lower range. If you are an "casual" landlord, by that I mean for example a retiree letting out the old family home after they've moved into somewhere smaller after the kids have left home, or someone letting out their home while working aboard etc., that may persuade the judge to go easier on you than say if you have tens of properties or are a professional letting agent etc.

                          While it is my opinion that the penalty applies per tenancy, there's no binding authority on the matter. You could try arguing that only one penalty applies. You may or may not get lucky with the judge on the day. Some have apparently be lucky that way, but personally I wouldn't bet on it.

                          Then there's the question of overall proportionality in the penalties assuming multiple counts. While one times 3x may well be proportionate, 3 times 3x would arguably not be if you're not a professional letting agent or have loads of properties etc.

                          So I would say an initial offer of 1 times 3x if you want to try argue only one penalty, or 3 times 1x if not. If they insist on more than 3 time 2x, you may as well try your luck with a judge. Anything in between is up to you.
                          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


                            #14
                            Originally posted by awharton04 View Post
                            I hope someone on this forum can help.

                            I am a UK amateur landlord living abroad. ...........
                            Get educated, get trained: RLA or NLA courses etc etc etc..

                            When I started I made worse, more painful, longer-drawn out, mistakes. My stupidity & ignorance. I resolved to start learning. Still learning, still making mistakes.

                            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


                              #15
                              1. did you let direct or through an agent?

                              2. if you make a reasonable offer that is declined, then judge may not award costs against you.

                              Comment

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