Tenant stopped corresponding about security deposit

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    Tenant stopped corresponding about security deposit

    Hello Everyone
    I have a property, fully managed by a large chain of Estate Agents. The tenant moved out at the end of April, leaving some damage. I put is a claim for £X from the £Y security deposit. The T verbally disputed this and the management company started negotiations with the T. After a couple of weeks, the company said the T has stopped communicating and they they had not raised a formal dispute. After 3 months with no further contact with the T, the company sent me a 95 day declaration for me to sign whereby they will send me the whole deposit of £Y. I am a bit worried about the wording which includes :-

    1) I totally absolve ABC Lettings from any liabilities (legal, commercial or otherwise) that may arise in respect of ABC now transferring these deposit monies to me.
    2) After passing the deposit monies to me, should my ex tenants subsequently make any claim(s) for the deposit monies I will personally undertake to settle such claim(s) direct with them, not requiring any involvement from/by ABC Lettings.

    Where does this leave me if, say in 3 years time, the T wants their security deposit back? Also can ABC Lettings do this, because the security deposit is held by an independent body, the TDP, who surely have to agree to this? Also, I don't want the whole deposit back, just my costs for which I have all receipts. All advice will be much appreciated. Thanks/

    #2
    There's a TDS, DPS, and MyDeposits, not so much TDP. Going to assume you mean one of them.

    Insured, or custodial?
    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


      #3
      On my list statement when the tenancy was set up it says the following :-

      TDP Fee for property xyz as per Service Agreement

      So it must be custodial.

      Comment


        #4
        I'd guess it means Tenant's Deposit Protection rather than meaning the scheme name.
        And there's no reason to presume it's custodial.

        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


          #5
          I suspect this is an insurance based scheme, so the agent does actually hold the money. You need to read the scheme small print to ensure continuity of cover.

          If it is insurance based, you really should have initiated court action by now.

          If it is custodial, you should have used the single party claim procedure.

          My guess is it is insurance based and the agent's cover is running out.

          Comment


            #6
            I'd have expected the insurance to have expired when the tenancy ended.
            The agent must be holding the money, otherwise, they couldn't return it.

            The undisputed amount of the deposit should be returned to the tenant (as it's their money).
            If the tenant is genuinely not contactable, the landlord should hold it on trust for at least 6 years.

            The tenant can sue the landlord for any amount that the landlord retains.
            You can't stop them from doing that, so whether they succeed would be down to the validity of the deductions made.
            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


              #7
              The landlord doesn't need to go to court if it's insurance base. The landlord, theoretically, already holds the money. It's the tenant that need to go to court if the landlord don't return it.

              And yes, it did sound like insurance base. The insurance protection only last until X months after tenancy ends. If the tenant haven't made a claim to the scheme, they won't be able to after that and will have to go to court if landlord don't return it.

              OP, make sure you have copies of all inventory, check-in/out reports etc., and then take the money. You can always put it put it in a savings account if you worry about the tenant showing up later.
              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


                #8
                If the landlord oesn't go to court, they will have the threat of having to repay the deposit hanging over them for the next six years, which is what the agent is trying to indemnify against.

                What I did fully research is what happens when the insurance ends. Is the landlord required to formally protect the deposit themselves, even though the tenancy is over?

                Comment


                  #9
                  There's no tenancy and the money is no longer being held as security, so I'd say it's no longer a tenancy deposit for the purposes of the Housing Act.
                  It's now just the tenant's money.

                  And it would be virtually impossible to protect it as a matter of practicality because the information you'd have to enter on-line would be false (tenancy start date and term for example).
                  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
                    What is the landlord's cause of action when going to court in such a situation, who's the defendant, and what are the remedy being seeked?

                    No, the landlord don't have to (can't) protect the deposit. The landlord need to return the undisputed amount if they are able to (i.e. have ex-tenant bank account / new address). If not, then per jpkeates said, the landlord should be holding onto it in case the tenant turn up. Six years only because of limitation, not because it actually becomes landlord's money.
                    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


                      #11
                      I have asked the agents if they have made the tenant aware and they have confirmed that the T was aware that if they did not raise a formal dispute within the 3 month deadline, then they would release the funds to the LL without their consent. I think I will take what I have receipts for and return the rest. Not really impressed with the agents wanting to absolve themselves of this after 3 months and passing the buck to me literally.

                      Comment


                        #12
                        You can't take what you have receipts for. It remains the tenant's money until either the tenant agrees otherwise or a court so rules.

                        Comment


                          #13
                          The agent doesn't have any choice.
                          They're doing exactly what the deposit protection companies would do if the money had been in a custodial scheme.

                          If you're not happy with the process, leave the deposit where it is and claim your loss from the tenant another way.

                          Originally posted by KTC View Post
                          Six years only because of limitation, not because it actually becomes landlord's money.
                          It's quite common for a business to acquire any unclaimed funds it holds after 6 years.
                          Lots of pre-payment accounts have positive balances and the "owner" has vanished.
                          So it becomes revenue when the customer can't claim it back.

                          Otherwise it sits there forever.
                          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


                            #14
                            Originally posted by KTC View Post
                            What is the landlord's cause of action when going to court in such a situation, who's the defendant, and what are the remedy being seeked?
                            The cause for action is the damages that they intend to use the deposit to cover.

                            Comment

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