Tenancy issues - No Deposit Scheme, demanding deposit back

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  • theartfullodger
    replied
    Sigh ... Just return deposit plus 2xdeposit and pray .

    I'm in favour of tenants obeying the law and wish/hope all landlords, including me, abide by the law also - if you see what I mean...

    Leave a comment:


  • islandgirl
    replied
    Thank you JP I do see the logic of course. But would the court "join" the 2 cases together in this way? Is there precedent for that? I am sure you are right but it just seems a strange way to deal with these issues.

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  • jpkeates
    replied
    Originally posted by islandgirl View Post
    Thank you for the clarification. I think in this circumstance I would go for eviction as soon as they owe 2 months and take any penalty awarded to them on the chin. I could not stand to wait 7 months (though I see the logic)
    Sorry for the late response.

    The problem with this approach is that the court is likely to offset the penalty against the rent owed, which would mean that the mandatory ground for eviction would fail.
    Getting possession on a discretionary ground that isn't ASB isn't easy - because, being realistic it's disproportionate in most cases.
    If a tenant owes you a sum of money less than two month's rent, an appropriate court action would probably be to order them to pay it.
    Ordering them to pay it and making them homeless seems a bit over the top.

    Parliament clearly intended that the threshold for making someone homeless as well was a debt of two months' rent.

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  • jpkeates
    replied
    Originally posted by llplug View Post
    Does anyone know what these "no win, no fee" types actually take/make? Would I end up paying penalty + there legal fees?
    The no win no fee firm is hoping that you will resist at first and then settle.
    While they will take some of the penalty awarded to the tenant, their main goal is to rack up massive legal costs.
    These are usually many thousands of pounds.

    If it goes to court, they'll often hire a barrister, to increase the costs further.

    The formal term for no win no fee is taking the case on a conditional or contingent basis.
    When a case is taken on that basis and won in court, the legal fees awarded are subject to a bonus, which can be up to 100% of the costs (it's usually less than that, but it can increase them substantially).

    They only take on cases that look like guaranteed winners, and will abandon any claims that turn out to be less than certain.
    That usually takes a short amount of time, any landlord who gets a legal letter is either able to send back evidence that the claim is wrong or the landlord is pretty much guaranteed to lose.
    Then it's just a question of how much the landlord is going to pay.

    It's extremely expensive and will escalate quickly.

    Do I sit back and wait or as jpkeates suggests, get in quick with the likes of a Part 36?
    It wasn't actually my suggestion, but I'd follow the advice and do exactly that - the tenant owes you rent, so you can use that debt as part of the settlement. An offer to settle might dissuade any no win no fee firm from taking the case, so it's probably worth it just for that.

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  • alice123
    replied
    I'm sorry you are in this situation , from what i have heard from someone these 'no win no fee' type of 'solicitors' take a massive chunk out of any claim for their own fees , which would leave your tenant with rather less money that he/she would have anticipated.

    One of the reasons why i have now sold up is i had some bad tenants in and i lost all my money

    please keep us updated

    Leave a comment:


  • llplug
    replied
    I can't seem to reason with tenants, seems intent on legal action which is bewildering.
    Does anyone know what these "no win, no fee" types actually take/make? Would I end up paying penalty + there legal fees?
    Do I sit back and wait or as jpkeates suggests, get in quick with the likes of a Part 36?

    Leave a comment:


  • theartfullodger
    replied
    Was this an old tenancy agreement rather than a current agreement from a reputable source, please?

    If so, wonder what else is wrong ...

    Leave a comment:


  • islandgirl
    replied
    Originally posted by KTC View Post

    No, OP is still in the original tenancy. And probably still in the first four months anyway (assuming England).
    Thank you for the clarification. I think in this circumstance I would go for eviction as soon as they owe 2 months and take any penalty awarded to them on the chin. I could not stand to wait 7 months (though I see the logic)

    Leave a comment:


  • jpkeates
    replied
    Originally posted by llplug
    This is the original tenancy, 2.5 months into tenancy, they have said they intend following through with legal action and will withhold any rent until matter resolved.
    You can't stop them taking legal action.

    But nor can they withhold rent, which I would, politely, point out to them.
    Once they owe two month's rent, you can serve notice (under section 8, Housing Act) and they can be evicted.
    That notice can be issued regardless of the deposit failure - however, it is quite possible that, when the issue in court, the judge would award the penalty associated with the deposit failure and deduct the amount from the rent owed.

    So, tactically, it might be worth waiting until the tenant owes enough rent so that even if four times the value of the deposit is deducted, two month's rent is still owed. Which is likely to be about seven month's (or so)'s rent.
    Originally posted by llplug
    I was reading through tenancy agreement tenants had signed, guess this does not hold water, even though it doesn't mention a Deposit Scheme?

    Handling of the Deposit

    The Landlord will arrange for the Deposit to be held in a bank or building society account
    I would say that that is likely to encourage the judge to award the maximum penalty, because it makes it very clear that you intended not to do what you are required to with regard to the deposit.

    Where on earth did you find a tenancy agreement with a sentence like that in it?

    For some tenants, seeing a sentence like that in a tenancy agreement would tell them exactly what kind of landlord they were dealing with.
    They'd regard handing over their deposit as an investment opportunity to at least double their money.

    Leave a comment:


  • theartfullodger
    replied
    Following through with legal action is their absolute right.

    Not paying rent is breach of contract.

    From what you have stated, you will undoubtedly lose a deposit protection case:

    Your choice, your decision, what you do.

    Leave a comment:


  • KTC
    replied
    Originally posted by islandgirl View Post
    Also can the OP now issue a section 21 now the deposit is protected?
    No, OP is still in the original tenancy. And probably still in the first four months anyway (assuming England).

    Leave a comment:


  • islandgirl
    replied
    This is obviously a complex situation but how do you now the tenant really will go to court? Is there enough "dosh" in it for the no win no fee types? Tenant may not do it alone. Also can the OP now issue a section 21 now the deposit is protected? I think I would be tempted to do that if I could at this stage and deal with the fallout sooner rather than later.

    Leave a comment:


  • KTC
    replied
    Originally posted by llplug
    received a reply to the effect I am to late. "See you in court".
    Well, it is too late for no penalty but you knew that already. Like theartfullodger said, make a offer to settle. I'll make it a formal Part 36 offer to avoid any argument. The +£1 is unnecssary, if you made the offer, they need to beat it. It is highly unlikely for a court to award the maximum 3x for a late (as opposed to no) protection.

    Don't forget to serve the prescribed information correctly.

    Leave a comment:


  • theartfullodger
    replied
    Just offer, in writing, 2xdeposit +£1 regarding your late (you were late) breach of the law. Law passed twice by parliament, 2nd time giving landlords more than twice the time to do some simple admin.

    You want to do all you can to avoid legal disputes.

    Oh I do hope my agents are protecting deposits properly

    Leave a comment:


  • jpkeates
    replied
    Despite my disagreement about the long term consequences, there's no downside to following KTC's advice and your protecting the deposit and giving the PI to the tenant now.
    Given the tenant's demands and the chance that you'll change your mind, I'd suggest using an insured scheme (so you keep the actual cash in your control).

    KTC is usually right about legal issues anyway!

    Leave a comment:

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