Overseas L did not protect deposit: ex-T's threats

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  • Overseas L did not protect deposit: ex-T's threats

    I'm an overseas landlord who rents out her UK residence. New tenants moved in last October when I was briefly back in the UK. I received the deposit from the tenants which I forgot to register until it was too late as I had never had to do this before. I was never asked about registration and I have kept their deposit safe.

    The tenants have now MOVED OUT but there was minor damage in breach of their contract - about 300GBP worth. In trying to discuss this with them I admitted I hadn't registered the TDS. They are now threatening to sue me for the 3X deposit money. Any suggestions about what I should do? The tenancy is now completed - can they sue as ex-tenants? Should I just give them all their deposit back and forget the 300 GBP worth?

    Does anyone know how the law is likely to work on this? I had no idea that I could incur a 3X deposit liability or obviously I'd have lodged the money.

    I'm not a bigshot landlord - just a middle-aged woman letting out her only house and living cheaply in Cambodia to save money. I've been letting out my house for three years before and pride myself in acting quickly and generously to tenants complaints.

    Please help! Shocked and upset

  • #2
    Your tenants/ex-tenant are well within there rights to take you to court for 3X the deposit amount.
    Not being aware of the law is not a defenence. It is clear you have made a mistake, you now need to get out of it as cheaply as you can.
    If it were me, I would give them there full deposit back, then pray the do nothing else about it.
    If they did pursue you for the 3X penalty, they WILL win.

    A very harsh lesson to learn!

    Comment


    • #3
      Regrettably, you are paying the price that "ignorance of the law is no excuse"

      Your tenant is entitled to what he is threatening as the law about the penalty for not protecting a deposit is quite clear. As another thread on this forum shows however, the county courts have not yet got around to enforcing it and tenants are having difficulty in recovering their 3x deposit through the county courts at present. Apparently this may continue until an appeal court judgement has further clarified matters (if they aren't clear enough already.) I suspect that if refunding his deposit will get your ex-tenant of your back this may be the best solution and you will have to write off the £300 that you wish to retain. However I should check back here for more qualified advice.
      Best of luck

      P.P.
      Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

      Comment


      • #4
        Does this come under the small claims court process?

        When we were seeking to recover the share of maintenance costs from an overseas landlord via the local courts, we were told by CAB to forget it as it impossible to serve/enforce claims when the defendant isn't in the uk.

        Comment


        • #5
          Originally posted by Magic View Post
          I'm an overseas landlord who rents out her UK residence. New tenants moved in last October when I was briefly back in the UK. I received the deposit from the tenants which I forgot to register until it was too late as I had never had to do this before. I was never asked about registration and I have kept their deposit safe.

          The tenants have now MOVED OUT but there was minor damage in breach of their contract - about 300GBP worth. In trying to discuss this with them I admitted I hadn't registered the TDS. They are now threatening to sue me for the 3X deposit money. Any suggestions about what I should do? The tenancy is now completed - can they sue as ex-tenants? Should I just give them all their deposit back and forget the 300 GBP worth?

          Does anyone know how the law is likely to work on this? I had no idea that I could incur a 3X deposit liability or obviously I'd have lodged the money.

          I'm not a bigshot landlord - just a middle-aged woman letting out her only house and living cheaply in Cambodia to save money. I've been letting out my house for three years before and pride myself in acting quickly and generously to tenants complaints.

          Please help! Shocked and upset

          I would give all their deposit back as suggested and hope they dont go to court for their x3 entitlement. Brush up on what you need to do/changing legislation while abroad, to be honest the best way to do that would be to check this website/forums once or twice a month! as we are pretty on the pulse. Its unfortunate that you have been caught out like this, the legislation was establsihed to tackle the big serial offenders but as ever in life its generally the little fish that get stung.

          TDS would only apply if the property was in England or Wales and it was an AST.

          Good luck for next time and keep your fingers crossed that they dont come looking for more once you return the deposit!

          Comment


          • #6
            This is another instance of the discussion we were having the other day, about 215(4) being an "also" clause.

            If LL returns 100% of the deposit then judge surely cant apply 215(3) as the deposit has already been returned in full as per 215(3)(a), and therefore the judge can't apply 215(4) either.

            This really needs to get clarified, as if this is the case, then it looks like the 3x deposit compensation will NEVER get awarded, as a LL can wriggle out of it on receipt of the court claim forms by either protecting the full deposit if still within tenancy (albeit late), or return the deposit in full if the tenancy has ended.

            Were there not any cases around the end of 2007? As this would have been the end of the first 6 month tenancies affected by TDP?

            Comment


            • #7
              I'm not sure on the legal significance of this but I know someone who went through the courts for 3x, plus original deposit plus interest on the online system and the courts adwarded a judgement for the full amount as there was no defence put in by the LL.

              The case was settled out of court.

              Kind regards,

              John

              Comment


              • #8
                Deposit not registered?

                What does this mean? I rent a property and as far as I'm aware my LL hasn't "registered" the deposit I paid, I doubt she knows of this process. What does this entail? How do I find out if my deposit is registered and what does it mean anyway!?
                Any advice gratefully received. Many thanks for taking the time to read this.

                Comment


                • #9
                  It might have been a Consent Order, simply ratifying what the parties agreed:
                  a. before Court proceedings started; or
                  b. during an adjournment.
                  Having such an Order is useful:
                  a. not only to evidence the agreed terms; but also
                  b. in case one party fails to perform what was agreed (and other party wants to propel him/her into action).
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                  • #10
                    Thank you

                    Hi,

                    Many thanks to everyone who has replied to this question. (I hadn't realised that I'd had any replies as I'd asked for notification to my email - but this bit of the system doesn't seem to be working.)

                    The general view is that I should return them the full deposit and just take the hit on the £300.

                    It would seem if they accept the deposit being fully returned then they can't sue for the additional 3X?

                    I have 3 tenants - they each paid one third of the deposit. I have currently returned the full deposit to the most hostile, but retained £100 from each of the other two - i.e. £200 now towards my damages.

                    Would each of the tenants have to take me to court - or can they act as one? The ringleader has been returned her full deposit. Can this be taken through the small claims court or would it need to go full court?

                    Thanks for your help

                    Magic

                    Comment


                    • #11
                      Originally posted by Magic View Post

                      It would seem if they accept the deposit being fully returned then they can't sue for the additional 3X?
                      Sorry but no. Even if you return the deposit in full to them, they could still pursue you via the courts for the 3X penalty.

                      Comment


                      • #12
                        Is there any time limit on this?

                        Comment


                        • #13
                          Originally posted by Magic View Post
                          Is there any time limit on this?
                          Not according to the 2004 housing act, no! ( And no it is not fair! )

                          Comment


                          • #14
                            Originally posted by jeffrey View Post
                            It might have been a Consent Order, simply ratifying what the parties agreed:
                            a. before Court proceedings started; or
                            b. during an adjournment.
                            Having such an Order is useful:
                            a. not only to evidence the agreed terms; but also
                            b. in case one party fails to perform what was agreed (and other party wants to propel him/her into action).
                            I'm afraid I know very little about the legal system but this is roughly how it all went!

                            Tenant used the online money claim system to claim 3x deposit plus original deposit plus interest for a tenancy that finished about six months previously.

                            LL has 14 days to file a defence - no defence was filed.

                            Tenant then had the option to ask for an automatic judgement and chose for the LL to pay back the full amount (as opposed to installment).

                            Landlord then had 21 days (I think) to reply. No reply was filed so then the option of issueing a warrant is there. However, before the warrant was filed the LL contacted the tenant and it was settled without the warrant being issued.

                            Not sure how any of that fits in to the above but it is more or less what happened!

                            Kind regards,

                            John

                            P.S. Just to clarify - no one physically went to a court room!
                            Last edited by kayak; 17-04-2008, 08:59 AM. Reason: P.S

                            Comment


                            • #15
                              A lot of the TDS legislation is down to interpretation of the wording.

                              Some ppl would say that if you've returned the full deposit, or protected it in a custodial scheme (despite missing the 14 day deadline), then a tenant cant pursue the 3x. This is because these ppl would say that 214(4) cannot apply without 214(3) due to the 'also' in 214(4), and 214(3) could not apply as (a) or (b) have been satisfied.

                              Some ppl would say that 214(4) can apply independently of 214(3).

                              No one has a definitive answer until we get a case go under full hearing.

                              There is more. There is also confusion about 213(6)(a) - whether this automatically includes 213(6)(b) due to the 'and' at the end of (a). (b) is the crucial 14 day part.

                              Comment

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