Landlord profiting out of a deposit

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    Landlord profiting out of a deposit

    I am sorry if this has been posted many times before, but I need a fast answer to this query.

    The background - tenant moved out in June 2008, landlord wants to make a few deductions from the deposit one of them being a water bill for the period 1st April 2008 - 31st March 2009. There have been alot of backwards and forwards emails bwtween landlord and tenant with no movement either way in moving forward. Obviously the tenant is not agreeing to this or the other deductions. The tenancy is pre TDS. the deposit is being held by the agent for the landlord and NOT stakeholder. The Landlord wants the agent to release the total deductions to them now.

    The query I have is where in the Landlord tenant act or housing act or other act does it state that a landlord can not be seen to profit from a tenants deposit.

    Thanks

    #2
    It's not really statutory. Those Acts do not affect L's position in this context.
    The Letting Agreement should prescribe L's rights to deduct; apart from lawful deductions, the money is T's (so it should be repaid to T).
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Thanks Jeffrey - so - if the Water Bill is not retained by the landlord and the tenant is still disputing the other items from the deposit which the landlord wants to deduct - of which they say they have reicepts to prove the work was necessary. The remainder of the deposit should be released to the landlord (minus water bill) and then tenant takes landlord to small claims court to get the money back? Am I correct?
      Thanks again - you are always very helpful!

      Comment


        #4
        Originally posted by vanandmatt View Post
        if the Water Bill is not retained by the landlord
        Eh? Please explain.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #5
          The position is that if the deposit is held as 'Landlord's Agent' then the agent is obliged to expedite his client's instructions. If the tenant disputes this then their only redress is through the courts. There is no requirement on the agent to even mediate, but they should advise the tenant to take independent legal advice. The agent should return any undisputed amount to the tenant immediately.
          The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

          Comment


            #6
            Sorry not making myself clear!

            If the deposit held by the agent (pre TDS) is not held as stakeholder - the agent should forward the deposit to the landlord on their instructions? Obviously the water bill excluded.

            Comment


              #7
              Landlord changing the deductions

              Gosh -it gets worse, following on from my previous post about a deposit dispute. A landlord originally claimed from a tenants deposit deductions in a sum of money (say £900), there have been protracted arguements between landlord and tenant. Landlord is now saying (6 months later) that the original claim was not exhaustive and they now wish to deduct further amounts from the deposit.

              Can they change their minds about the deductions and add more into the pot now?

              Comment


                #8
                Originally posted by vanandmatt View Post
                The background - tenant moved out in June 2008, landlord wants to make a few deductions from the deposit one of them being a water bill for the period 1st April 2008 - 31st March 2009.
                Can you explain why T should be liable for water bill for period of 9-10 months after he moved out?
                '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


                  #9
                  My gut feeling would be, as agent, to deduct everything the Landlord is presently claiming and return the balance to the former tenant, as instructed (by the landlord).

                  If you are on good terms with the tenant (perhaps placed them elsewhere) all you can do is suggest they sue the landlord for the deposit.

                  Else you get yourself into a dispute with both parties and you start to act as a judge yourself if you agree or disagree with what the landlord is claiming.

                  Comment


                    #10
                    Originally posted by Wickerman
                    A quick question - is the agent a member of ARLA or the NAEA? Their rules stipulate (IIRC) that deposits have to be as stakeholder, not as "agent for the landlord", which alters what the agent can or cannot do.
                    Those rules cannot be imposed on the contract between the landlord and the tenant. If an agent takes a deposit as agent he holds it as agent and must answer to his professional association for breaking the rules.

                    It is not necessary for the word "stakeholder" to appear in the contract for the deposit to be held as stakeholder. It can be implied from the tenor of the words used. What is the exact wording here?

                    Comment


                      #11
                      Originally posted by Wickerman
                      I'm not 100% sure what you are saying here. My contracts have always said how the contracts are held (eg the wording is any deposit taken by a managing agent is held as "agent for the landlord"). The TDS regulations have made this a moot point - deposits are effectly quasi stakeholder. (the agent is stakeholder for the deposit, as is the DPS - they are impartial and require both parties to agree - the agent is the extension of this).
                      Lawcruncher is (correctly) stating that:
                      a. L's contract with A (Agency Agreement) is entirely distinct from L's contract with T (Letting Agreement); and
                      b. A can receive deposit 'as stakeholder' even without using those exact words.
                      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                      4. *- Contact info: click on my name (blue-highlight link).

                      Comment


                        #12
                        The distinction between stakeholder and agent is still important as it applies to the deposit before it is protected and where it can go if not paid into a custodial scheme. And of course the TDS only applies to ASTs.

                        It is not so much a case of the agent informing the tenant on what terms the deposit is held, but rather that it is determined by the agreement between the landlord and tenant or the circumstances.

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