Tenant Eviction.....S21 & S8 notices but Deposit blunder.

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    Tenant Eviction.....S21 & S8 notices but Deposit blunder.

    Not so long ago I posted on LZ with regard to a tenant who is now over 4 months in rent arrears. I have already issued a S21 notice allowing over 4 months for him to vacate in October. In the meantime I sent documentation to my insurance co. which was then forwarded to their solicitors as I'm covered for legal expences allowing representation and to chase rent arrears. The tenancy commenced in late 2005 and managed at the time by a local agent until 2008 after which I've been manageing myself on a periodic basis. At the time, the letting agent had returned his 1.5 months deposit but when I asked the tenant for it to be handed over to me so I could forward into the DPS he told me he'd banked the cheque but it had gone into his Offshore A/C and was trying to get it back !! This didn't bother me too much as he'd expressed wanting to occupy long term and I always received his rent when due. However, in 2016 I noticed he wasn't looking after his flat as well as he'd done in the past, no damage but hygene issues so I insisted a deposit be reinstated. This he did by way of 6 installments paid monthly which I duly forwarded to The DPS within a day or two of receipt.....This is my problem. In 2019 my computer developed a fault whereby the hard drive failed and all documents, photo etc. was lost and I had no backup in place. My solicitor has said that although the deposit was protected the prescribed information relating to the installments and custodial terms and conditions should have been forwarded to the tenant at the time and within 30 days. I'm almost certain I did this but have no proof and I'm told unless I send the fresh information to the tenant then a S21 is invalid. The solicitor has issued a S8 and telling me a new S21 will be issued once the prescribed information is in place.

    Sorry my post is so long but has anyone advice other than my solicitors....it looks like I could potentially be penalised.

    #2
    Originally posted by buffalo747 View Post
    ... the installments and custodial terms and conditions should have been forwarded to the tenant at the time and within 30 days.
    So did you protect each 'installment' and issue the documents to the tenant each time? Or did you not protect them until you had all six?

    To me (and your solicitor) it looks that you took six seperate deposits, each one of which should have been protected each time and documents issued each time, within the prescribed periods for each one.

    If you didn't protect them until you had all six then you were six months out of the time limits to protect the first deposit payment you took.
    (and 5 months out for the second, and 4 months.....etc).

    About all you can do is give the deposits back in full before serving notice.

    And then hope that your tenant doesn't sue you at least five times for not properly protecting five deposits.
    DPS records will show when you actually deposited the payments, but only you can show if/that you issued the documents.

    PS. You are running a business, why are/were you not backing up your computerised records?
    It's basic security.

    Comment


      #3
      nukecad.....I did mention in my post that each installment was passed onto the DPS within a day or two after receiving payment from my tenant. Seperate certificates to prove and bank statements of dates when received and forwarded. Even if I gave the deposit back now that would not stop me from being penalised for the failure of not forwarding the prescribed information together with the custodial terms and conditions for each installment within 30 days of receipt, albeit I may well of done so.....my solicitor told me this.
      At the time of losing all the data from my computer was relatively new and foolishly hadn't got my head around how to back it up. I now subscribe yearly for a company to do this for me and any problems are dealt with by them remotely.

      Comment


        #4
        You can provide the Prescribed Information now and that will allow the section 21 to be valid even if you didn't provide it at the time.

        You can still be sued for a deposit penalty, but there's nothing you can do about that, and you'll just have to live with it.
        But the penalty is likely to be on the low side, maybe the value of the deposit, so it's painful but not the end of the world.
        The downside is that the tenant can make their claim for a penalty as part of the arrears process, so the penalty might reduce the arrears below the ground 8 threshold.

        But there's no point beating yourself up about it now.

        For what it's worth, even though it's some years ago, if a tenant paid me a deposit over six months, I'd remember printing and posting the PI, it would be pretty much seared on my memory - that much documentation 6 times would be a colossal PITA.
        So my guess is that it wasn't done, hard drive or no hard drive.
        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
          Fair enough, it wasn't clear that you had protected each "installment' but as said DPS records will show that.

          So your problem is proving that you gave the tenant the documents each time.

          TBH I'd bank on any court deciding that if you knew enough to protect each installment individually then you also knew to issue documents each time - and on the balance of probabilities would have done so even though you can no longer prove it.
          (That would be my argument to the court if it comes to that).

          Your solicitor is just pointing out what might happen - that's what you are paying him/her to do.

          All that said, giving the full deposit(s) back now will allow notice to then be valid.

          Comment


            #6
            jpkeates....I value your advice as I have always done in the past and the same applies with my latest headache and will deal with it as you say. It's a shame because the tenant appears to been having problems since his parents died and has gone downhill by not looking after himself or his flat. When I first mentioned the arrears he told me he had been sacked last December and that he was waiting on the DWP to sort out his Universal Credt claim but has now stopped communicating. The thing that's bugging me is that when his inheritance was sorted in 2016 he purchased a brand new motorhome which is still probably worth over £40K today!! My son checked via a friend of his who's in the motor trade and the HPI reveals that he still owns the vehicle which is clear of finance and sits outside his flat.

            nukecad.....Thank you, I appreciate your last comments and if the tenant decides to sue me then it will be my argument that I followed the critea correctly yet not in a position to prove. The solicitor hasn't suggested I return the deposit at this stage but simply forward the documentation now as a reminder. I must of sent something to him so he could check his deposit was protected and believe the DPS would have confirmed this to him also. His job was as an IT consultant so he knew how to check his installments were safe without me sending any info anyway but I know that's not the point.

            Thank you both once again I'll let you know the outcome but it could be some weeks/months away.

            Comment


              #7
              Just to add as a warning to other landlords who maybe considering the eviction of their tenants and having to issue S8/S21 notices. As mentioned previously, before issuing these notices the tenants must have received the prescribed information together with the custodial terms and conditions relating to their deposit. As mentioned above, in 2016 I deposited installments within the DPS correctly within 30 days of receiving which amounted to 1.5 times the monthly rent. However, I can't prove sending the other documentation so am having to start the process of notices from scratch. I contacted the DPS and asked if they could provide a copy of the custodial terms and conditions relating to 2016 as this changed to the present downloadable version. In April 2019 the maximun amount of deposit for new tenancies was capped at 5 weeks rent and for tenancies that started prior to this date, as of June 2020 the maximum 5 weeks rent also. So I've had to ask the DPS to amend the amount they hold of my tenants deposit accordingly and send a refund before new notices can be served, albeit he owes me over 4 months rent......For many years, if I have a property that becomes vacant I've engaged a letting agent find a suitable tenant on a "find only" basis and I then managed myself with the agent dealing and holding the deposit. Yesterday, I contacted the two agents I use with both saying they are holding deposits within their insured scheme for tenancies created prior to 2019 with each amounting to 1.5 times the monthly rent which should have been corrected and refunds to the tenants made.....The NRLA told me yesterday that failure to do so carries up to a £3000.00 penalty.....yikes !!

              Comment


                #8
                The cap on deposits doesn’t apply to tenancies that began before the Tenant’s Fees Act.
                Its always possible that a court will rule differently at some point, but the wording of the legislation is quite clear.

                The cap shoul apply to a new tenancy created as a follow on tenancy to one that existed previously, which is something to be careful about.
                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


                  #9
                  jpkeats.....Thank you although this is not what a NRLA customer service agent told me yesterday. Have you a link where I can find this information so I can forward to the DPS, NRLA and my solicitor?

                  Comment


                    #10
                    buffalo747 Have a look at https://431bj62hscf91kqmgj258yg6-wpe...June2021-2.pdf
                    That's pretty much the gold standard for section 21 notice validity.
                    You will see that the 5 week limit is not applicable unless a new tenancy has begun since the Tenant Fees Act.

                    It's also made clear in the Tenant Fees Act itself.
                    The Transitional provisions are laid out in section 30 and, when the act starts to apply to existing tenancies (5 & 6 and 9 & 10) it applies when a prohibited payment is made, and, if no new tenancy is created, a deposit is not paid to a landlord*.

                    If a new tenancy is entered into (even if it's a renewal or a follow on agreement to an existing tenancy), the deposit is received again by the landlord and the legislation applies.

                    The DPS restriction is simply a system wide rule to cap deposits being loaded onto the system wrongly.
                    Existing deposit records don't have any cap.

                    I'm pretty sure that the NRLA should be aware of this, that the DPS are definitely aware of it (otherwise they're holding many thousands of unlawful deposits) and it's less likely that a non-specialist solicitor would have any idea.

                    *Ignoring the basic problem that a landlord is not actually "paid" a deposit, they're given it to look after.
                    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


                      #11
                      jpkeates....Many thanks for your input and time, I know only too well how long it takes to carry out research let alone typing posts such as yours.

                      Comment


                        #12
                        Originally posted by buffalo747 View Post
                        Just to add as a warning to other landlords who maybe considering the eviction of their tenants and having to issue S8/S21 notices. As mentioned previously, before issuing these notices the tenants must have received the prescribed information together with the custodial terms and conditions relating to their deposit.
                        That requirement doesn't apply to S8 notices.

                        Comment


                          #13
                          Originally posted by buffalo747 View Post
                          However, in 2016 ...
                          Statute of limitations next year?

                          Then go after the motor home.

                          Comment


                            #14
                            boletus.....Thank you for your input.....Last Friday my solicitor sent the tenant a S8 notice via first class post to be signed for. I was thinking/hoping the grounds of being over 4 months in arrears would be enough for a judge to order the tenant to vacate without going down the S21 route as well, perhaps it's just a back up strategy. If I do what the solicitor suggests it will mean sending 6 lots of the DPS prescribed information to cover each of the installments which made up the deposit together with a copy of their custodial terms and conditions. I'm just waiting for the DPS to forward a copy of their version covering the relevent 2016 period before forwarding to the tenant, then my solicitor intends issuing the S21 notice. It was my intention to also include the 6 certificates covering each of the installments together with a covering letter saying the information I'm providing is a reminder of that previously sent at the time or something along those lines......Are you saying I should wait just over a year before chasing any money owed as this would avoid any action he may think of taking against me on the grounds that I did not send the prescribed information covering each of the deposit installments within 30 days after I forwarded to the DPS.......I can see your point but I'd be interested if jpkeats has a comment to make.

                            Comment


                              #15
                              I am losing some faith in any solicitor who sends notices to be signed for by the tenant.
                              The tenant can decline to sign for them (or simply not be in and then fail to collect the item from the sorting office).

                              Your section 8 notice is a claim for the outstanding rent as well as possession, so delaying a money claim isn't really an option.
                              The court can simply award the penalty and deduct that from any arrears, so as long as the penalty isn't sufficient to reduce the arrears below the two month threshold you should be OK.

                              At some point, you're going to have to face up to the fact that you didn't give the tenant the prescribed information.
                              It's not something you'd forget, even several years later.
                              And it's better to admit the problem and address it than try and pretend otherwise.
                              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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