Non protected deposit interest

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  • Non protected deposit interest

    Our previous tenancy commenced in March 2007 and wasn't covered by the protection scheme. We paid a deposit of £3,300 and this was held in a client deposit account by the lettings agency. We have just received all of our deposit back less the checkout fee.

    Interest on the deposit amounts to the princely sum of £57. Sorry if this sounds very pedantic but that is a ridiculously low rate when the base rate significantly exceeded this for most of the past two years. Unfortunately the tenancy agreement (a common law tenancy rather than an AST) simply refers to the deposit being held by the agent and mentions "any interest" being paid over to us.

    Based on deposit rates over the past two years I would have expected interest of about £300 to have accrued if the funds had been invested in a good deposit account. I have no doubt that the agency is being completely honest with us. My question is whether they had a duty of case to protect the value of the deposit more carefully than they did?

  • #2
    If it was not an AST ("common-law tenancy"- perhaps because rent exceeded £25 000 p.a?), no deposit protection rules apply anyway!
    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).

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    • #3
      Bit late now. You had the ability to negotiate the type of account where the money should be held at the time of drawing up the agreement.

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      • #4
        Originally posted by jeffrey View Post
        If it was not an AST ("common-law tenancy"- perhaps because rent exceeded £25 000 p.a?), no deposit protection rules apply anyway!
        Yep that's right the rent was £2,200pm initially. The agency have explained themselves satisfactorily. The bank advised them that the account they used was the best they offered for this sort of no notice account. As always the bank's advice was in their own interest and not in that of the customer!!

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