Deposits

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  • Deposits

    I thought other Landlords should be aware of the Deposit compensation scheme. Failing to secure a tenants deposit will result in compensation being paid to the tenant of 3 times the deposit plus their deposit returned. Even if you have a tenant that was in occupation prior to April 2007 and you issue a new lease for any reason, you MUST secure their deposit. Failure to do so will result in compensation having to be paid.

    I had a tenant that started their tenancy in February 2004. In August 2008 I wanted to increase the rent and she asked for a new lease so she could go to the DSS and claim the rent increase. I issued a new lease. It was to expire on the 19th Febraury 2009. On the 14th November she gave me 2 weeks notice. I said she could vacate but I didn't know at what cost, it depended on how long it would take to re-let the flat. She asked for her deposit to be returned but as I did not let the flat until February I said I had been severely out of pocket to the tune of £1500 and that I would settle for her deposit £380 in exchange for the £1500 owing. She seeked legal advice and on the 3 times compensation rule, claimed that as I had not secured her deposit in August she was entitled to her deposit and the compensation. I paid the deposit in full and final settlement, and she accepted it. But under the law she was entitled to the full amount. You cannot counterclaim as it is a penalty, however you could issue a seperate summons. The chance of obtaining any money from a DDS tenant is remote!! So the moral of the story is to secure all deposits for all tenants at all times. Just to add, if you have not secured the deposit and you want to give the tenant notice you cannot use section 21 notice until the deposit is secured.

  • #2
    Thank you for the reminder. The members write posts on this matter on this forum almost daily.

    I think the moral of the story should be keep up to date with landlord/tenant/property/tax laws and apply them appropriately.

    Comment


    • #3
      were you still holding the deposit monies from 2004 or did she pay the deposit over when the new agreement was signed in Feb?
      PAUL GIBBS, solicitor, Jacobs & Reeves. My comments on this forum are correct to the best of my knowledge and belief. No responsibility or liability is accepted by reason of reliance upon such comments. This disclaimer would not apply to direct clients of Jacobs & Reeves where there is a valid retainer in place and I would be happy to confirm any advice if formally instructed. . Jacobs & Reeves now offer a fixed fee possession service.

      Comment


      • #4
        Originally posted by pfduk View Post
        I thought other Landlords should be aware of the Deposit compensation scheme. Failing to secure a tenants deposit will result in compensation being paid to the tenant of 3 times the deposit plus their deposit returned. Even if you have a tenant that was in occupation prior to April 2007 and you issue a new lease for any reason, you MUST secure their deposit. Failure to do so will result in compensation having to be paid.

        I had a tenant that started their tenancy in February 2004. In August 2008 I wanted to increase the rent and she asked for a new lease so she could go to the DSS and claim the rent increase. I issued a new lease. It was to expire on the 19th Febraury 2009. On the 14th November she gave me 2 weeks notice. I said she could vacate but I didn't know at what cost, it depended on how long it would take to re-let the flat. She asked for her deposit to be returned but as I did not let the flat until February I said I had been severely out of pocket to the tune of £1500 and that I would settle for her deposit £380 in exchange for the £1500 owing. She seeked legal advice and on the 3 times compensation rule, claimed that as I had not secured her deposit in August she was entitled to her deposit and the compensation. I paid the deposit in full and final settlement, and she accepted it. But under the law she was entitled to the full amount. You cannot counterclaim as it is a penalty, however you could issue a seperate summons. The chance of obtaining any money from a DDS tenant is remote!! So the moral of the story is to secure all deposits for all tenants at all times. Just to add, if you have not secured the deposit and you want to give the tenant notice you cannot use section 21 notice until the deposit is secured.
        Its a shame that you paid up. Even after the tenant took the legal advise, if youd registered the deposit before she took you to court then you wouldnt have had to pay her any compensation and you could have claimed the (now registered) deposit to compensate yourself.
        Last edited by fallenlord; 20-03-2009, 16:29 PM. Reason: missed somehing out

        Comment


        • #5
          Originally posted by Paul Gibbs View Post
          were you still holding the deposit monies from 2004 or did she pay the deposit over when the new agreement was signed in Feb?
          I was still holding the deposit from 2004.

          Comment


          • #6
            Originally posted by fallenlord View Post
            Its a shame that you paid up. If youd registered the deposit before she took you to court then you wouldnt have had to pay her any compensation and you could have claimed the (now registered) deposit to compensate yourself.
            I didn't go to court. She went to citizens advice, they wrote to me claiming compensation and the deposit returned. As such I paid the deposit but in full and final settlement of her claim...not mine. They somehow missed that fact and when they noticed they went mad, writing to me and threatening that they would put in a counterclaim for the compensation. We know...well hope so that they can't do that and that I should be successful in any claim, but whats the point against a DSS person?

            Comment


            • #7
              Originally posted by pfduk View Post
              I didn't go to court. She went to citizens advice, they wrote to me claiming compensation and the deposit returned. As such I paid the deposit but in full and final settlement of her claim...not mine. They somehow missed that fact and when they noticed they went mad, writing to me and threatening that they would put in a counterclaim for the compensation. We know...well hope so that they can't do that and that I should be successful in any claim, but whats the point against a DSS person?
              In my opinion the CAB do a very good job of twisting things, and they are certainly far from being a great fountain of knowledge. Provided the deposit is registered before court action begins then the tenant cannot seek the 3 x compensation.

              I dont suppose you paid this by cheque and can still cancel it....?

              Comment


              • #8
                Originally posted by fallenlord View Post
                In my opinion the CAB do a very good job of twisting things, and they are certainly far from being a great fountain of knowledge. Provided the deposit is registered before court action begins then the tenant cannot seek the 3 x compensation.

                I dont suppose you paid this by cheque and can still cancel it....?
                Hi

                This seems interesting

                Could you point me to the legislation that says retrospective compliance is ok ? I can find nothing other than the landlord has 14 days to register the deposit.

                Many thanks

                Comment


                • #9
                  Originally posted by hairyb View Post
                  Hi

                  This seems interesting

                  Could you point me to the legislation that says retrospective compliance is ok ? I can find nothing other than the landlord has 14 days to register the deposit.

                  Many thanks
                  The general consensus on this forum over the last few weeks/months at least, seems to be that late compliance (ie before the Court hearing) generally protects the LL being whacked with the 3x penalty, but there is nothing to stop the T going ahead with his claim. I think I am right in saying that some judges have gone ahead (despite LL's late compliance) and awarded against the LL anyway. After all, the offence still stands). The only thing which seesm to prevent the T claiming is when LL returns the deposit in full before the hearing.

                  Different judges seem to be interpreting a very badly drafted piece of legislation differently.

                  I'm sorry I don't have any cases to cite.
                  '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


                  • #10
                    http://www.dailymail.co.uk/property/...nant-scam.html

                    hello, this is the case I had in mind

                    Comment


                    • #11
                      Originally posted by fallenlord View Post
                      In my opinion the CAB do a very good job of twisting things, and they are certainly far from being a great fountain of knowledge. Provided the deposit is registered before court action begins then the tenant cannot seek the 3 x compensation.

                      I dont suppose you paid this by cheque and can still cancel it....?
                      I understand that the law states 'unpaid'. therefore if it is paid prior to trial it should be correctly interpreted. (Badly written law).

                      No, I paid by direct transfer and got her to send me confirmation and a full and final settlement of her claim, so there shouldn't be any come-backs. I can still issue a claim against her...but then again whats the point, she doesn't have any money.

                      Comment


                      • #12
                        If you think you have an actionable claim against this person, you really ought to slap a CCJ against their name. Otherwise they come up smelling of roses elsewhere.

                        Comment


                        • #13
                          Originally posted by fallenlord View Post
                          Its a shame that you paid up. Even after the tenant took the legal advise, if youd registered the deposit before she took you to court then you wouldnt have had to pay her any compensation and you could have claimed the (now registered) deposit to compensate yourself.
                          Oh god it's like the blind leading the blind

                          You can't just put the deposit into a scheme when it suits you, especially on the eve of being taken to court

                          The deposit has to be put into an approved scheme and the tenant notified o which scheme it's in within 14 days of the tenancy starting. Fail to do this and you will have to pay 3 months rent in compensation and the deposit back in full. Your rights to evict are also diminished

                          I don't know why I'm bothering to help you out, if you aren't aware of the laws around this sort of thing, christ knows how bad you are at other aspects of being a landlord

                          Originally posted by Poppy View Post
                          If you think you have an actionable claim against this person, you really ought to slap a CCJ against their name. Otherwise they come up smelling of roses elsewhere.
                          Shame there is no way for tenants to get a CCJ against a landlord who has failed abysmally to follow the law around deposits, or get a blackmark against them on some sort of central register as a warning to future tenants

                          There isn't yet anyway

                          Comment


                          • #14
                            Originally posted by nick.. View Post
                            Oh god it's like the blind leading the blind

                            You can't just put the deposit into a scheme when it suits you, especially on the eve of being taken to court Quite a few Judges have taken a different view

                            The deposit has to be put into an approved scheme and the tenant notified o which scheme it's in within 14 days of the tenancy starting. Fail to do this and you will have to pay 3 months rent in compensation and the deposit back in full. Your rights to evict are also diminished only where serving a S21 is concerned.

                            I don't know why I'm bothering to help you out, if you aren't aware of the laws around this sort of thing, christ knows how bad you are at other aspects of being a landlord
                            The whole of the discussions on 'deposit protection' shows just how badly drafted the law is.

                            Nick, if you have your eyesight back, why don't you read some, pay particular attention to those written by Jeffrey, Agent 46, Paul Gibbs and other legal people.
                            I offer no guarantee that anything I say is correct. wysiwyg

                            Comment


                            • #15
                              Originally posted by fallenlord View Post
                              In my opinion the CAB do a very good job of twisting things, and they are certainly far from being a great fountain of knowledge. Provided the deposit is registered before court action begins then the tenant cannot seek the 3 x compensation.

                              I dont suppose you paid this by cheque and can still cancel it....?
                              Heard this rubbish before.... usually before the 'fountain of knowledge' which usually is the soon to be poorer landlord. I used to work for the CAB as volunteer and can confirm that it is a really good service. The information is not given 'off the cuff' and is all backed up by a substantial information system. OBVIOUSLY.... being staffed by volunteers without law degrees the information is at a more basic level than what you would hope to recieve from a solicitor but unless you have evidence to back up your stupid claims of twisted legislation I would kindly suggest you stop annoying me sir!! Hit a sore point there.. sorry
                              Borat hope his post are some help. Borat thinks people should double check anything someone who refers to himself in third person says...

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