Help Need on Deposit Scheme

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    Help Need on Deposit Scheme

    I have been letting a property for over 10 years and previously used an agent to find tenants. Agent has now retired and in January I had to find tenants for 2 separate properties (upstairs and downstairs of house).

    I must confess I was blissfully unaware of the Deposit scheme and now realise I have made a mistake.

    I have two separate problems:

    Tenant 1: has paid me a deposit (in Jan) which I didn't realise I needed to deposit - is it too late to deposit it now? if it is what could I do instead and what could be the consequences? I have no problems with this tenant, I just want to ensure that everything is above board and legal.

    Tenant 2: could be turning into a case study of the tenant from hell! Foolishly I didn't wait for his cheque to clear before he moved in, and yes you've guessed, the cheque bounced.

    He moved in in Jan and so far I still haven't received a deposit from him and he is already behind his rent (although not two months yet).

    I have written to him advising that he has arrears of the deposit and rent but this has not yet been forthcoming. Question is - how can I deposit his deposit in the DPS if he hasn't paid it yet? I am worried that this will invalidate the Section 21 proceedings?

    Any help will be gratefully accepted.

    #2
    If he hasn't paid his deposit then he has no deposit to protect. (Lucky really, otherwise you'd be at risk of losing three times the deposit back to him.)

    If you hadn't taken a deposit from him then you wouldn't be worrying about this point, would you?
    The contents of this note are neither advice nor a definitive answer. If you plan to rely on this, you should pay somebody for proper advice.

    Comment


      #3
      Originally posted by Grange View Post
      If he hasn't paid his deposit then he has no deposit to protect. (Lucky really, otherwise you'd be at risk of losing three times the deposit back to him.)

      If you hadn't taken a deposit from him then you wouldn't be worrying about this point, would you?
      What about the Tenant 1 question, which I find interesting?

      Comment


        #4
        The tenant 1 question has two answers;

        a) protect the deposit now and send them the prescribed information. Hope they dont take you to court for x3 deposit for not protecting it within 14 days. (the best way to avoid this would be to repay them their deposit completley at the end of the tenancy, regardless of damage done)

        b) dont protect the deposit and hope they wont notice and take you to court the same as above. The downside of this is you wont be able to use s.21.

        Comment


          #5
          thank you

          thank you for such a quick response

          I was minded to do exactly what Planner suggested in his first point. Actually every indication with Tenant 1 is that he is not going to give us any problems, he pays on time, in full, and is a good tenant (but of course, early days).

          Sorry for being dim but I don't understand Grange's answer. Should I still pursue Tenant 2 for his deposit - if he doesn't give me a deposit can I still get a court order for non payment (he will owe two months rent soon)?

          Once again, sincere thanks for responses.

          Comment


            #6
            Originally posted by AngLangS View Post
            Should I still pursue Tenant 2 for his deposit - if he doesn't give me a deposit can I still get a court order for non payment (he will owe two months rent soon)?
            I'm not clear - has this character actually paid you anything at all yet?

            If yes, then take the deposit out of whatever rent he's paid you; that will increase the arrears to over 2 months and you can serve him with a Section 8 to repossess and claim the arrears.

            If no, then surely he's already 2 months in arrears, so you can S8 him imediately.

            Not sure I'd bother taking legal proceedings at this stage to get a deposit off him unless for some reason you want to keep him long-term? Presumably you want him out ASAP, in which case wait and see what damage he may have done after he's gone, and take legal action to recover the cost along with any rent arrears.

            Comment


              #7
              I think in terms of tennant 2, you could keep pestering for a deposit but do you think you will get it?

              I think the best approach would be wait until hes 2 month in arrears and then issue s.8. Issue a s.21 now though as well.

              The only thing you can then do his persume him for arrears and any damage done to the property once they are out through small claims. The moral of the story is obviously deposits and first months rent MUST be in cleared funds before tenant can take possession of proprty.

              Comment


                #8
                We were foolishly trusting like you and didn't get a deposit (in our hand) prior to giving over the keys to one of our tenants. We had rent arrears from day one too.

                We issued him with a section 21 and also threatened to take him to court to recover the unpaid rent. Thankfully, he did pay all the arrears just before he left and also, since he did no damage, the lack of a deposit didn't become a problem. We were lucky, really, and have now learnt our lesson. No deposit & rent - no keys. We're also much more on the ball re references.

                With regard to the deposit paid but not protected - personally, I'd protect it as soon as possible and hope your tenant is a good one and doesn't want to take the matter any further.

                Comment


                  #9
                  All I meant was that there is nothing to worry about if there is no deposit.

                  You cannot protect a deposit you have not had, therefore you cannot be at fault with regard to that deposit.
                  The contents of this note are neither advice nor a definitive answer. If you plan to rely on this, you should pay somebody for proper advice.

                  Comment

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