I did not use TDS- Court Action approaches!

[shackleton9]

Any advice for me?

I set up an AST for my 3 bed house in London about 4 years ago. As one tenant left he/she found a replacement and so on. The new tenant gave outgoing tenant their proportion of the deposit.

I wanted to regularise the situation earlier this year and drafted a new AST with new names -which they all signed. I advised them before signing I'd not put the money I had held for 4 years in aTDS.

Within terms of the AST I eventually served section 21 to regain possession. On departure a pile of rubbish was left in my front garden. I arranged clearing and propose to deduct charge fromoriginal deposit.

Tenants are threatening me with Court action for witholding this amount and for not putting deposit inthe TDS.

Do you have any ideas how I stand on this should it come to Court?
With thanks
Regards
Wendy

[mind the gap]

Any advice for me?

I set up an AST for my 3 bed house in London about 4 years ago. As one tenant left he/she found a replacement and so on. The new tenant gave outgoing tenant their proportion of the deposit.

I wanted to regularise the situation earlier this year and drafted a new AST with new names -which they all signed. I advised them before signing I'd not put the money I had held for 4 years in aTDS.

Within terms of the AST I eventually served section 21 to regain possession. On departure a pile of rubbish was left in my front garden. I arranged clearing and propose to deduct charge fromoriginal deposit.

Tenants are threatening me with Court action for witholding this amount and for not putting deposit inthe TDS.

Do you have any ideas how I stand on this should it come to Court?
With thanks
Regards
Wendy

Why exactly did you not protect their deposit in a scheme?

[Poppy]

You have failed to protect their deposit according to the law.

Next time, you cannot issue a section 21 notice if you have taken a deposit and not protected it.

Give them back all of their money right now. You don't have a legal leg to stand on. Cross your fingers that they don't take you to court.

[mind the gap]

You have failed to protect their deposit according to the law.

Next time, you cannot issue a section 21 notice if you have taken a deposit and not protected it.

Give them back all of their money right now. You don't have a legal leg to stand on. Cross your fingers that they don't take you to court.

Agreed. If they take you to court, you could be made to pay up to 3 times the deposit as a penalty for failure to protect it.

Do as Poppy says and give it back immediately.

[jeffrey]

Why exactly did you not protect their deposit in a scheme?

Probably because of an incorrect assumption relying on the four-year-ago original AST's commencement date.

[mind the gap]

I thought if you protected it after the fact you would be OK? Or does that only apply to the prescribed information?

No, it seems in practice to apply to the act of protecting it as well. Some landlords have rushed off and done this and got away with it as long as it was in a scheme before the court date.

However, if tenants have moved out and LL returns it immediately in full, she has more chance of avoiding court action as the whole point of protection was to ensure T's get the money back....and they will have done.

I agree she was still guilty of non-compliance, but the fact she had given it back would count in her favour, should the tenants decide to take action. In fact, I'm not sure they can do that, once deposit has actually been returned.

[Poppy]

Wickerman, do you realise that the tenants have left the property?

[jeffrey]

Wickerman, do you realise that the tenants have left the property?

(Thinks)
T has left
so it's no longer T's only or principal home
so it's no longer an AST
so the deposit protection rules no longer apply.

[mind the gap]

(Thinks)
T has left
so it's no longer T's only or principal home
so it's no longer an AST
so the deposit protection rules no longer apply.

Yes, but...if tenants moved out and a LL still refused to give back an unprotected deposit, what redress would they have? Surely they should be able to sue for the 3x penalty on the grounds that LL did not protect during the tenancy, even if that tenancy is now ended?

Otherwise, LLs would only ever be at risk of being sued during the tenancy - but most tenants don't realise LL has failed to comply until tenancy ends and they ask for deposit back...catch 22 situation, me thinks.

[Preston]

Hi

I know this argument has been raised in a slightly different context in another thread and there are different views on the point, but I do think it likely that even though s214 of the Housing Act 2004 refers to tenant that a former tenant could also take action under this legislation. On a practical level, many tenants will only find out about the failure to protect once the tenancy has ended. And the fact that a "relevant person" (i.e. someone who paid the deposit on behalf of the tenant) can also take action would suggest that there was no intention to limit the opportunity for action strictly to the period of the tenancy.

Have just realised that I was typing this response, others have already made the same point.

Preston

[shackleton9]

TDS- they can fail- will wepay them interest.

Thanks for the advice.
I've never felt that the money is secure with the Tenancy Deposit Protection scheme - custodial. Ithink they payrunning costs from interest margin on the dposited money. 2.3?%. presumably if interestrates drop even further we will payTDS to keep the money!
Regards
Wendy

[mind the gap]

Thanks for the advice.
I've never felt that the money is secure with the Tenancy Deposit Protection scheme - custodial. Ithink they payrunning costs from interest margin on the dposited money. 2.3?%. presumably if interestrates drop even further we will payTDS to keep the money!
Regards
Wendy

The custodial scheme is called the DPS (Deposit Protection Scheme) and is funded, I believe, from the interest accrued on the deposits. There are two other non-custodial schemes, of which the TDS is one, where the money stays in the LL's or agent's account but is protected by an insurance paid for by the LL.

[Poppy]

The other insurance-based scheme that mind the gap has omitted is called Tenancy Deposit Solutions Limited or TDSL or mydeposits.

[mh1111]

Hi,

Is the following thread relevant to this;

http://www.landlordzone.co.uk/forums...ection+schemes

Deposit protection on tenancy renewal?

Jeffrey do you disagree with agemnt 46?

cheers