Tenancy deposit not protected - advice please

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  • Tenancy deposit not protected - advice please

    3 tenants rented one of our properties from 1st Sept 07 to 30 August 08. Despite my requests the tenants never signed a joint tenancy agreement so i was unable to lodge the £600 deposit with mydeposits insurance based scheme which i normally use. The tenants paid their rents fine.

    When the tenants left the property £300 of work was required to make the property suitable for the next tenants. After much discussion with the tenants i agreed that i would refund all their deposits less £40 (£160). I have an email confirming that they would accept £164 each accepting some of the liability for the costs.

    They have now contacted the CAB who are pushing for the full £200 to be returned each and are treatening to take us to court to claim the x 3 deposit as the deposit was not protected.

    I have been fair on the deposit i have returned to them, but obviously i am in a tricky situation as the deposit was not lodged.

    If the tenants do not have a signed tenancy agreement. Could they still go to court and claim the full deposit x 3 compensation? I think they are just looking to make money now. Can i protect the deposit now and would this stand up in court?

    Any advice would be much appreciated.

    Thanks

  • #2
    Stupid question, how were they able to move in without signing a contract?Just because you did not have a signed tenancy agreement did not stop you protecting the deposit.

    Suggest that you return all of the deposit money right now.

    I note your phrase "one of our properties". I sincerely hope that all other deposits taken on or after 6 April 2007 are protected in schemes. Are they?

    Comment


    • #3
      Not a very helpful response Poppy!

      Mydeposits (the scheme I am a member of and where all our property deposits are protected) do not allow you to register a deposit if there is no AST in place. I have just spoken to Mydeposits and they have confirmed this is the case and pointed me to the document that states this. As far as they are concerned the tenants would have no case as they did not sign the tenancy agreement (despite me pestering them).

      Comment


      • #4
        You can still register your deposits with the TDS and are legally bound to. Just because you do not have a written tenancy agreement, doesn't mean that such an agreement exists by simple operation of law there has to be an agreement to protect both parties. Its a simple fact, regardless of what you may have recieved in confirmation from the tenants the statute takes precidence.
        [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

        Comment


        • #5
          A tenancy is in place it just happens to be verbal and is legal due to the Law of property act 1925 section 54.

          Comment


          • #6
            You do have an AST

            Like MrJohnnyB and johnboy says just because you do not have a written tenancy agreement, this tenancy is still an assured shorthold tenancy and it does not stop you protecting the deposit. I hope you now understand that.

            I see nothing wrong with what I have said.

            All that mydeposits meant is that the law for protecting deposits only applies to assured shorthold tenancies that began on or after 6 April 2007.

            Comment


            • #7
              I have just contacted the TDS and as I am a private landlord, and they cover corporate and agency lettings, I am unable to register the deposit with them. They referred me to Mydeposits (see previous comments).

              Comment


              • #8
                Originally posted by HelenHol View Post
                I have just contacted the TDS and as I am a private landlord, and they cover corporate and agency lettings, I am unable to register the deposit with them. They referred me to Mydeposits (see previous comments).
                http://www.depositprotection.com

                This is another option to protect a tenancy deposit.

                Comment


                • #9
                  Thanks SAL.

                  I have spoken to the DPS and they are happy for me to protect the deposits, even though the tenants have left the property. It sounds like this is the best course of action as I happy that the tenants are liable for a minimium of the £40 each and should resolve the problem of having no written tenancy agreement.

                  Comment


                  • #10
                    Do you think you will avoid legal action by protecting the deposit eighteen months after receiving it and the tenancy has now ended? I don't get that. Other members may disagree.

                    I must say I did not know that TDS do not deal with ordinary residential landlords.

                    Yes, of course DPS are glad to get the money because they were hoping to rely on interest earned and we all know where interest rates have gone lately - south!

                    Comment


                    • #11
                      Originally posted by Poppy View Post
                      I must say I did not know that TDS do not deal with ordinary residential landlords.
                      Thats because they do.. Or so this would have you believe...

                      The Dispute Service Ltd (TDS Ltd). This company has been established as a joint venture company between RICS, the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA). As a government backed scheme it must be open to all, providing applicants are prepared to sign up to the scheme rules. It is not, therefore, necessary to belong to one of the constituent professional bodies in order to join TDS Ltd. Membership fees are chargeable (see below).

                      The problem is, when you undertake to protect money in a scheme arent you required to obtain a signature from the parties entering into the scheme at the time the lease is formed?
                      [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

                      Comment


                      • #12
                        Originally posted by Poppy View Post
                        Stupid question, how were they able to move in without signing a contract?Just because you did not have a signed tenancy agreement did not stop you protecting the deposit.

                        Suggest that you return all of the deposit money right now.

                        I note your phrase "one of our properties". I sincerely hope that all other deposits taken on or after 6 April 2007 are protected in schemes. Are they?
                        I agree with Poppy, especially the highlighted advice. Oce you have returned the deposit in full I think it highly unlikely that a claim for 3x would succeed. The point of deposit protection is to ensure a deposit is not unfairly retained by LL and if your return it all now, that principle will have been adhered to.
                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                        Comment


                        • #13
                          Point noted and returning the deposit in full is certainly an option.

                          When the tenants left the property there was (genuninely) £300 of work that had to be completed before the new tenants moved in (new tenants with a signed tenancy agreement and fully protected deposit). In have an email from the ex-tenants accepting part responsibilty for this work - £148 in total but now they have the CAB involved they are looking to get as much money as possible.

                          I agreed to refund £440 - making them pay £160 - so per their email they are only disputing £12.

                          Do I pay them back the full deposit when they have accepted liabilty for some of the costs (although i feel they are actually liable for more)????

                          Comment


                          • #14
                            Originally posted by HelenHol View Post
                            Point noted and returning the deposit in full is certainly an option.

                            When the tenants left the property there was (genuninely) £300 of work that had to be completed before the new tenants moved in (new tenants with a signed tenancy agreement and fully protected deposit). In have an email from the ex-tenants accepting part responsibilty for this work - £148 in total but now they have the CAB involved they are looking to get as much money as possible.

                            I agreed to refund £440 - making them pay £160 - so per their email they are only disputing £12.

                            Do I pay them back the full deposit when they have accepted liabilty for some of the costs (although i feel they are actually liable for more)????
                            If you want to minimise the risk of their 3x claim succeeding, yes! And do it now, is my advice.
                            'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                            Comment


                            • #15
                              Originally posted by mind the gap View Post
                              If you want to minimise the risk of their 3x claim succeeding, yes! And do it now, is my advice.

                              I agree, returning the full deposit would be the safest and best option.

                              Comment

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