Failure to issue prescribed information regarding tenant deposit

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    #16
    Originally posted by jpkeates View Post
    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).
    March 2012 assuming the LA screwed up as well.

    Likewise for October 2012.

    January 2013 wasn't a new tenancy, so wouldn't be an additional penalty to October 2012, also the requirements didn't apply anew. A penalty could had been applied for that the deposit was no longer where the landlord said it was protected at, but that's argubly a test that could only be applied for before the deposit had been returned, which happened in October 2013.

    October 2013 (SPT), yeah... definitely a penalty there.

    Could I transfer the deposit to an alternative protection scheme and then serve prescribed information in the thirty days?
    Just serve the PI or return the deposit, or wait till October this year and hope you're lucky that the tenant doesn't sue you in the meantime.
    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.

    I do not answer questions through private messages which should be posted publicly on the forum.

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      #17
      Thank you for this advice. Does the tenant only have six years to sue us about the failure to issue the Prescribed information?

      The other query I have is whether it would be four breaches. I am confident that the Lettings Agency will have issued the prescribed information for when they were fully managing the property from March 2012 until January 2013. Surely this period would be exempt from us being sued over?

      Anyway, regardless, I am grateful for the advice you and others have given. I think that we need to keep this tenancy going until October 2019 and then I will return the tenant's deposit before we issue the Section 21.

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        #18
        The Limitation Act period for recovery of "any sum recoverable by virtue of any enactment" is six years. The problem is when does that six years start. It is commonly assumed that the six years start from the deadline when the protection and PI requirements must be met, so the October 2013 SPT start date + 30 days. However, it may be argued that it should run from the tenancy end date. Additionally, the law was modified in 2012 and 2015, which may have reset the limitation period so any existing tenancy deposit.

        Don't think it's an issue that has been tested in court.

        Personally, I think you only have to worry about October 2013, so one 1x-3x penalty.
        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.

        I do not answer questions through private messages which should be posted publicly on the forum.

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          #19
          Originally posted by Fargesia View Post
          Thank you for this advice. Does the tenant only have six years to sue us about the failure to issue the Prescribed information?
          That's a good question.
          In theory, the tenant has six years from the breach to sue.
          There is a reasonable argument that the clock only starts when the tenant becomes aware of the breach, but there's no way to know if this is ever the case, because these cases aren't documented anywhere.

          The other query I have is whether it would be four breaches. I am confident that the Lettings Agency will have issued the prescribed information for when they were fully managing the property from March 2012 until January 2013. Surely this period would be exempt from us being sued over?
          . If the court accepts that the agent served the PI, either because they have some evidence or believe you, there would be no penalty.
          If the agent did serve the PI, there's a decent argument that here was no need to serve the PI when you took over management of the property.
          That wasn't the case in 2013, but is probably the case now.
          I'm not sure you'd win, but that's the approach I'd take.

          Again, that's not been tested. Your best bet is to return the deposit to the tenant before serving notice, as it makes the whole issue irrelevent as far as the s21 notice is concerned.
          After 7 years in the property there's unlikely to be too much to claim against the deposit, and it would help the tenant pay for a new property.
          You could offer to use it to pay the rent for a period, so they could save up for another deposit.

          Alternatively, you could serve the PI before the notice just in case.
          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).

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            #20
            Thank you both so much for your input. I will definitely return the deposit before issuing the Section 21 and keep things on an amicable footing with the tenant. I will do this in November after the six years has elapsed, just as a precautionary measure.

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              #21
              Originally posted by jpkeates View Post
              There is a reasonable argument that the clock only starts when the tenant becomes aware of the breach
              I don't think such arguments has any chance of success. In the Limitation Act, there's special provisions allowing limitation periods to be postponed or reset, such as postponement in the case of fraud, concealment or mistake. If the Act specially say when a limitation is postponed until discovery (or could with reasonable diligence have discovered it), then it must follow that that doesn't otherwise normally applies.
              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.

              I do not answer questions through private messages which should be posted publicly on the forum.

              Comment


                #22
                KTC,

                I also believed that, but then I "spoke" to a solicitor who carries out a lot of no win no fee deposit work (which was an interesting an eye opening conversation all of its own.
                The assertion was his.

                It's not reasonable to require a tenant (a consumer) to know the procedure for protecting a deposit and, logically, not reasonable to assert that the absence of the PI should have alerted the tenant to the failure of the landlord to comply.
                Therefore it wasn't (essentially) possible for the tenant to know that there had been an issue until they were made aware of it - which could be at the end of the tenancy (which was common for failures to protect at all), but, particularly for PI issues or when the deposit had been returned in full could be at a later point.

                Which sounds like an approach based on concealement?

                It's possible that that approach doesn't always work in court - and his business model was predicated on as few cases going to court as possible - but the service he offered included court if the landlord didn't settle out of court, so it did end up there quite often.

                On the flip side, he'd decided to take no further cases for failure to provide PI only, because the courts invariably awarded a 1x penalty only.
                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

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