3x Tenancy Deposits - more woe in court

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    3x Tenancy Deposits - more woe in court

    I have been having massive problems with a case in the Small Claims Court.
    Short version - please stick with it!
    Tenants agreed verbally 27/2/08 to Statutory Periodic Tenancy on same terms ie 6 months from end of AST 26/4/08.
    They claim they sent a letter first class 20/3/08 stating they were moving out and asking to take the last month from the deposit.
    This letter was never received (or sent tbh)
    The keys were retained and the Tenants refused to answer any calls or letters etc over the next 4 months
    They, funnily enough, did not pay their last month's rent or leave any forwarding addresses, nor did they pay any utilities or council tax and had(have) several debts on the property.
    On 1/7/08 I received 2 out of 3 sets of keys for the property.
    Managed to contact one tenant at work who agreed to a surrender of tenancy and retention of deposit and additional damages (total £985.18 plus breach charges - monthly rent £995) as well as forwarding stamped paid bills and final set of keys.
    This did not happen.
    I went to check the status of the deposit and found to my horror that it had not been registered.
    I worked out that it was during the time that there was a merchant service problem with the mydeposits scheme.
    I issued proceedings and put the deposit in the scheme.
    At no point had the tenants requested any information about the deposit nor had they requested its return.
    They instantly counterclaimed for the 3xdeposit compo.
    The hearing was today in front of a lady District Judge
    She did not appear to have grasped the point of the original claim as when she had eventually read some of the tenants' evidence (which had also become lost in the post on the way to the court!) she declared
    "From what i can see, this case is entirely about the deposit!"
    Gobsmacked! and not a little bit disgusted esp as i had not had the opportunity to claim for the deposit and damages above it after their counterclaim.
    I reiterated my case re the rent (evidence of residence after 26/4/07 in addition to tenant admitting in court having been there after 26/4/08 creating a Statutory Periodic Tenancy)
    They also admitted to leaving the property in a right state.
    The judge ruled that I was owed 3 months' rent plus the deposit damages plus court costs.
    (the damages were to be mitigated by the deposit still held)
    She asked us to leave as she could not work out what the total was and submitted it via scribbled paper after the hearing.
    By the time I received it she had gone to lunch with no guarantee of return any time soon.
    And she had amazingly got the sums wrong!!!
    She awarded the 3xdeposit fine and their costs to the tenants claiming that she had no choice under the Housing Act 2004.
    She did not award the return of the deposit to the tenants, nor did she request that it be paid into a scheme.
    HA2004 - sec 214.3
    the court must, as it sees fit, either -
    a) order that person who appears to the court to be holding the deposit to repay it to the applicant, or
    b)order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme.
    The court must ALSO order the landlord to pay to the applicant etc..etc..
    I do not believe she has applied either of 214.3 thus can not apply 214.4 due to the also.
    In addition, this is entirely the situation that I & many colleagues feared would happen with this part of the Housing Act - tenants being rewarded for reneging on their responsibilities.
    I appreciate that the deposit should have been protected but I am one landlord dealing with many of my own properties and their associated ongoing concerns and genuinely thought it was in the scheme.
    I have never touched the deposit which is still in its ringfenced separate account since payment.
    Gutted but intending to appeal on this point of law which needs to be sorted asap.
    Any helpers out there please?
    Thanks in advance,
    A very angry fatman
    Last edited by sherifffatman; 30-01-2009, 21:13 PM. Reason: bit and pieces

    trouble in court

    a couple of things spring to mind in reading your story...

    Firstly i would like to point out that the deposit scheme is there not only to protect tennants from unscruplous landlords but protects their rights too. While i tend to agree that the 3 x deposit is disproportionate as a "fine" so to speak, failure to comply with the law will lead to the possibility of prosecution. While you may feel let down by the scheme administration (rightly so) you failed to follow this up at the time. However, having placed this in the scheme before the case came to court gave you a chance that this counter claim could be refused. From what i have read not all cases have been succesful in these circumstances, so you have a right to feel let down there.

    It would also appear you have relied on a verbal agreement for the furtherment of the tennancy rather than have legal documention drawn up and signed. I am no expert but this is surely fraught with danger.

    I wonder if you have a right of appeal, it seems the judge has misinterpreted the judgements, what does anyone else think?

    I also feel your line about "only being one landlord having to deal with many of my properties" is out of order. We all have responsibilities however we earn our living and making excuses will not wash. Just as tennants have responsibilities as well, (yours have clearly let you down) i feel you would not accept excuses from them either.

    I hope you are able to find a solution - who would be a landlord?


      ironica - a couple of points for you though cheers for support (if i've read it right) -
      Under the Property Act 1925 any tenancy under a 3 year term can be oral and on a statutory periodic tenancy it is very common.
      I requested various things in writing from the tenants but as per my post they refused to pick up their phones or contact me after March -
      How would you have gone about getting them to sign?!
      (remember they admitted that they had accepted a SPT and claimed a letter had been sent giving notice. The letter has to be seen to be believed appearing to have been concocted after the claim issue as it directly refers to it! Tenants in arrears trying to blag? Never!)
      Also, the deposit is held as security for the performance of the tenant's obligations - to pay rent and to pay utilities on the property and the other terms of the agreement including notice.
      These tenants failed in their responsibilties and this was found in court.
      I can not claim 3x the rent that is owed to me despite the failings of the tenants - that would be an unfair term in a consumer regulation!
      I appreciate what you are saying about me having many things to do but the fine is for essentially an admin error - at no point did i withold the deposit like the tenants witheld their rent and didn't issue me with any notice meaning that i could not repossess or re-let it until i had heard from them which led to a void and massive loss of rent.
      There was never any demand for the deposit and the tenants' only interest in it was when i claimed what i was due in rent being left no other option than court.
      The deposit scheme was implemented to protect tenants from landlords keeping the deposit unfairly - not for any other reason re their 'rights'.
      There are many many other laws protecting the tenants' other rights (Landlord & Tenant 85 + 87, Housing Acts 1988 + 96, Protection from Eviction 77 etc etc)
      I have never refused return of the deposit (less the obvious damages now proven) and the tenants never - even in court - questioned the deductions.
      I feel I have been punished for something nonsensicle and let's be honest, the Housing Act 2004 is fraught with legislative inconcistancies which are unlikely to be challenged properly in law due to the majority of cases being small claims thus not on record.
      All my other deposits have been protected in date - this was an uncharacteristic human error - yet the tenants had a track record of leaving properties and not paying their debts and they have been rewarded for this.
      Not all Landlords are the ogres many people (and the govt) seem to think due to their varied experiences - i have retained only £50 (agreed on both sides) out of all of my other protected tenancies coming to an end.

      Hope this makes it clearer why i am very upset.
      Last edited by sherifffatman; 31-01-2009, 11:04 AM. Reason: less bile


        3 x deposit

        thanks for the feedback. Yes i do agree with you, the tennants are using the legislation for thier won ends, not to dispute resolution. I think there is a line here that needs to be defined; those LL that abuse he system and those, like yourself, who make an admin error but is willing to negotiate. Wish you were my LL!


          nice one mate
          good luck with your claim


            Update - the judge has got her sums right so am a much happier bunny
            Hurrah for British Justice!
            Last edited by sherifffatman; 03-02-2009, 02:56 AM. Reason: late night spelling



              great news...

              so how did it all work out?... did you get the rent money? and what about 3 x deposit?
              good luck


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