Failure to issue prescribed information regarding tenant deposit

[Fargesia]

We started renting to our current tenant in 2012 (house in england) as an Assured Shorthold Tenancy.

The AST has now expired and tenant has continued to live there on a Statutory Periodic Basis. We had a lettings agency manage the property at first. We then took over management ourselves in 2013 and transferred the tenant's deposit from the deposit scheme used by the Lettings Agency to the Deposit Protection Service (DPS). As the DPS contacted the tenant and advised them that the deposit had been transferred to them, I thought that everything was sorted.

I know learn that we should have independently contacted the tenant to give them prescribed information about the deposit within thirty days of the deposit being transferred to the DPS.

Where does this leave us now, 5 and a half years later? I was hoping to serve a Section 21 but I assume that I will no longer be allowed to do this if we haven't served the prescribed information at the correct time?

Any advice would be appreciated.

[theartfullodger]

To be able to serve a valid s21 you need to serve PI first. But tenant may still sue you for up to 3xdeposit. Possible for a number of tenancies...

[Fargesia]

OMG! Will have to factor the fine into eviction costs then by the looks of it.

[Fargesia]

Could I transfer the deposit to an alternative protection scheme and then serve prescribed information in the thirty days?

[theartfullodger]

Yes, but that won't stop tenant suing you for the penalty due to your failing to comply with law in place for over 10 years, confirmed twice by parliament (2nd time to move 14 days to 30 after landlords whinged about having too little time..).

Sorry: I've made worse, more painful, more difficult & expensive to resolve mistakes: Then I decided to start learning: I'm still learning!

[Fargesia]

I know what you mean!

[Fargesia]

When you say "Possible for a number of tenancies", what do you mean by this?

[theartfullodger]

http://england.shelter.org.uk/legal/...ion_214_claims

Multiple breaches

There is no binding case law to confirm whether a section 214 claim can be made for each breach of the tenancy deposit protection requirements (eg, a failure to protect a deposit both under an original fixed-term agreement and under subsequent statutory periodic tenancy) or whether the first breach would be treated as a single continuing breach.

[sam_cat]

Are you on good terms with the tenants, or looking to evict due to them being a pain?

Your best hope now is to not draw attention to it.

Arrange an inspection and have a chat with them face to face, explain your in this situation where you need to sell up/need house back for family.
Obviously as they have been such good tenants and been in so long you will refund the deposit in full asap (as they will need this money as deposit on new place). They dont have to have moved out for you to return the deposit.
Explain that various paperwork will be coming in the post shortly, give them a longish date on it rather than earliest opportunity and that as soon as they have found somewhere and on day of move out you will both sign a surrender and will refund them any leftover money from that month and they wont be liable for a penny more after that date (by cheque).
Send them a copy of the PI, Gas safety, contract etc for their records, with proof of postage, then a day or two later post the S21 again with proof of postage. Confirm with them by text/email a few days later that they have received both packs of documents etc.

Make it as painless for them as possible, its going to be a bit of shock whatever you do.. be helpful and dont draw attention to the paperwork side of thing.

Put some money aside either way, you might get stung in the future, upto 6 years I believe. Much harder to pursue once deposit has been refunded.

Good luck

[jpkeates]

If you return the deposit to the tenant, there's no need to serve the PI to issue a s21 notice.
It will help the tenant find a new place and keep things slightly more civil.

[Fargesia]

Thank you all for your very helpful and detailed advice. Could i not swap deposit protection schemes which gives me a valid reason to issue a new Prescribed Information form and hope that tenant doesn't realise that I didn't give her the Prescribed Information form the last time (in 2013)?

[KTC]

The AST has now expired and tenant has continued to live there on a Statutory Periodic Basis. We had a lettings agency manage the property at first. We then took over management ourselves in 2013 and transferred the tenant's deposit from the deposit scheme used by the Lettings Agency to the Deposit Protection Service (DPS).

Was that at the start of the periodic tenancy, or some time after?

Could I transfer the deposit to an alternative protection scheme and then serve prescribed information in the thirty days?

That would possibly make it worse if we're talking about a deposit that was protected at the start of a tenancy but PI wasn't given. Either return the depost or give the PI. If you are only talking about the one breach from 5 and half years ago, you can wait until the 6 years is up before doing so if you don't want to tip the tenants off before limitation is up*.

* Assuming the interpretation that limitation runs from deposit protection deadline and not say end of tenancy.

[Fargesia]

I have just re-checked the paperwork and the original Assured Shorthold tenancy started March 2012 for 6 months. The property was managed by a Lettings Agent. In October 2012, another AST was issued for 12 months by the Lettings Agent.

In January 2013, we took over management of the rental property ourselves. The Deposit had been placed into the DPS by the Lettings Agency when the tenancy started in 2012. When we took over management of the rental property in January 2013, we transferred the tenant's deposit into our own account with the Deposit Protection Service. I didn't know that I needed to issue the prescribed information and get the tenant to sign it. Therefore this wasn't done unfortunately.

Where does this leave us? How many times can I be fined for failing to issue the Prescribed information potentially?

[Fargesia]

I should add that when the second AST expired in October 2013, the tenant has remained in the property on a Statutory Periodic basis ever since.

[jpkeates]

In theory, that's four breaches (March 2012, October 2012, January 2013 and when it became periodic - which was a requirement at the time but no longer).

There are two approaches a court could take (assuming it comes to that), that it's the same problem simply ongoing (one breach) or that it's a series of breaches (four breaches).

Assuming that you don't keep the deposit or anything daft like that, the issue is at the less serious end of the scale and would probably result in a penalty of one times the deposit value per breach.

There's not much incentive for a tenant to take action if you're sensible about the deposit. It's quite hard to sue a landlord if there's no money owed to the tenant, because they can't use the small claims court.
And no win no fee firms are much less keen on prescribed information cases, because the penalty is too small.