Failure to comply with the TDS

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    Failure to comply with the TDS

    Hi,
    I have read a few posts about the TDS, as normally 'we' (my partner and I) generally do not take deposits (we take first and last months rent - which is stipulated in the contract).

    We took a template contract and modified it so that we basically stated that:

    1. Monthly rent amount covers all utilities/phone/council tax
    2. Initial payment will be first and last months rent.

    Unfortunately a mistake was made and this particular tenant has signed the wrong contract which states we will take a deposit and that the T is liable for all bills.

    The problem we have is that we gave the T notice to leave (contract was for 3 months and we gave notice after the 8th month) - the last months rent wasn't paid - as expected so we thought everything was ok....until....

    ....the T decides to get a solicitor to write us a letter informing us that we are to give 2 months notice - which we did. We then asked for the months rent that was owed - which was paid. The T then also paid the last months rent and subsequently issued a county court summons for the 3xdeposit fine + actual deposit.

    ....as we thought this may happen (as the solicitor brought up the subject of the TDS), we opened an account and put the money into the scheme. We intend to fully reimburse his deposit as the room/rest of flat was cleaned exceptionally well.

    My question is this:
    Should we dispute the whole claim - stating that his deposit was fully returned via the TDS scheme and see if we are found guilty of not compling with the 14 days rule

    OR
    Dispute the claim and counter sue for the utilities as the T is taking the contract literaly

    OR
    Wait for resolution of his claim, then start our own claim against him for not paying utilities purely for revenge and the T being completely unreasonable?

    OR
    None of the above?


    We feel this is being done, purely because we asked the T to leave - there is no other reason and so we are quite miffed at his behaviour.




    Cheers

    ice.

    #2
    Originally posted by icedfusion View Post
    1. Monthly rent amount covers all utilities/phone/council tax

    2. OR
    Dispute the claim and counter sue for the utilities as the T is taking the contract literaly

    3. OR
    Wait for resolution of his claim, then start our own claim against him for not paying utilities purely for revenge and the T being completely unreasonable?
    1. Utilities are included as part of the rent.
    2. How else is a contract to be read other than literally, how else would you read it?
    3. The utilities are included in the rent aren’t they?
    I also post as Moderator2 when moderating

    Comment


      #3
      If you protect the deposit (and provide the necessary info) you are fine, the 14 day rule doesnt come into play in court as the act doesnt specifically refer to it when describing the grounds for which the penalty applies.

      However, you are not allowed to section 21 someone without protecting the deposit first...

      Is this what you have done?

      Comment


        #4
        Regarding your normal contract - I'm pretty sure that the 'last months rent' you charge in advance is a deposit in all but name. I'm pretty sure you should have it protected.

        Comment


          #5
          Thanks for the quick replies.

          'Normaly' the rent does cover all the utilities and this is specified in our normal contract which also states that money owed at start of tenancy is first and last months rent (no mention of deposit).

          Therefore, the contract he has signed says 'X amount month rent' and T will also be responsible for all utilities (we have been paying the utilities as we believed the T had our normal contract).

          We did server notice, however, from what I have read he was outside the 6 months AST so it reverts back to the 1 month notice as it is now a periodic tenancy (have i understood this wrong)?

          When we did this, we did not ask for or receive the last months rent - as expected. It all started to go pear shaped when we received the solicitors letter. Up until this point, we have had no trouble either way and there has been no conversation to try and resolve it amicably (whatever concerns the T may have had).

          The T money is in a scheme now, and the T will receive the full return of the deposit via the scheme - I will assume the T will follow through with the small claims.

          I guess I was wondering if it was worth putting the T through this hassle l as the contract (even though not our normal one) states the T is responsible for the utilities even though we have been paying them.

          Thanks

          ice.

          Comment


            #6
            Originally posted by icedfusion View Post

            I have read a few posts about the TDS, as normally 'we' (my partner and I) generally do not take deposits (we take first and last months rent - which is stipulated in the contract).
            Arguably, advance rent can be interpreted as a deposit even if the contract doesn't call it a deposit, and therefore leaves you exposed to 3x claims. See:
            http://landlordlaw.blogspot.com/2009...t-deposit.html

            My question is this:
            Should we dispute the whole claim - stating that his deposit was fully returned via the TDS scheme and see if we are found guilty of not compling with the 14 days rule
            Yes. If you don't, you've a much better chance of losing, and possibly being liable for T's legal costs. Return the deposit to T, and dispute the claim.

            See this thread:
            http://www.landlordzone.co.uk/forums...ad.php?t=21013
            (a few threads have been merged into one by the moderator, so it's very long, but do read it all the way through - it has all the info you need to construct your defence).

            In a nutshell, failing to comply with 14 day rule is not in itself a cause of action, also judge cannot order the deposit to be returned/protected if that's already happened, therefore cannot also make the 3x order which follows on from that.

            Was T's claim issued on form N208? If not, and it's an N1, it's the wrong form.

            OR
            Dispute the claim and counter sue for the utilities as the T is taking the contract literaly
            But as far as you were concerned, utilities were included? And although the T is taking the contract "literally" (not unusual), he didn't pay the utilities during his tenancy?

            OR
            Wait for resolution of his claim, then start our own claim against him for not paying utilities purely for revenge and the T being completely unreasonable?
            Litigation is time-consuming, a hassle, and revenge is not a good basis on which to proceed with a claim.

            Comment


              #7
              Originally posted by icedfusion View Post
              We did server notice, however, from what I have read he was outside the 6 months AST so it reverts back to the 1 month notice as it is now a periodic tenancy (have i understood this wrong)?
              In a periodic tenancy, LL must give T two months' notice. T only has to give one.

              The T money is in a scheme now, and the T will receive the full return of the deposit via the scheme - I will assume the T will follow through with the small claims.
              You mean you expect the T to continue the claim even after the deposit is returned? Yes, I expect he will.

              It is vital that you ensure the deposit is returned to the T, don't just assume it's going to happen.

              I guess I was wondering if it was worth putting the T through this hassle l as the contract (even though not our normal one) states the T is responsible for the utilities even though we have been paying them.
              Maybe, but your primary concern should be to defend yourself against T's claim. The utilities bills are a side issue and financially it hasn't left you out of pocket, from what I can gather. Issue a counter-claim by all means, but don't let it distract you.

              Comment


                #8
                Originally posted by Snorkerz View Post
                Regarding your normal contract - I'm pretty sure that the 'last months rent' you charge in advance is a deposit in all but name. I'm pretty sure you should have it protected.
                Is that really the case even if there is no mention of deposit?

                Thanks

                ice.

                Comment


                  #9
                  Originally posted by icedfusion View Post
                  Is that really the case even if there is no mention of deposit?

                  Thanks

                  ice.
                  See my post #6 with link to landlordlaw blog.

                  Comment


                    #10
                    Thanks for the reply Westminister.

                    I will check the form the claim was made on (what difference does it make if it comes from the county court?)

                    I will also have a good read of the links you posted. I obviously have a lot to learn about the law.


                    As to the rental agreement - as far as I was concerned, the rent did include the utilities, However, the contract explicitly states the rent is for the room and that the T is also liable for utilities (the T did the old trick of turning everything on 24hrs a day) and the T did not pay any utilities whatsoever.

                    I will concentrate on the defence then decide after that what to do.

                    Thanks for the suggestions and clarifying various points.

                    ice.

                    Comment


                      #11
                      I have checked the form and have found that it is an N1 form (CPR Part 7).

                      Is it enough to quote:
                      Practice Direction
                      56.2 – STARTING THE CLAIM
                      2.1
                      Subject to paragraph 2.1A, the claimant in a landlord and tenant claim must use the Part 8 procedure as modified by Part 56 and this practice direction.
                      as a defence, or should I also include the various sections:


                      214 Proceedings relating to tenancy deposits
                      (1)Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds—
                      (a)that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) has not, been complied with in relation to the deposit;
                      Section 213(6)(a) states:
                      213 Requirements relating to tenancy deposits
                      (6)The information required by subsection (5) must be given to the tenant and any relevant person—
                      (a)in the prescribed form or in a form substantially to the same effect, and
                      (b)within the period of 14 days beginning with the date on which the deposit is received by the landlord.
                      Note that 213(6)(b) - the 14 day requirement - is NOT referred to in S.214(1)(a). So you can argue that you did fulfill the requirements of 213(6)(a), i.e. providing the deposit scheme information, therefore there is no cause of action.
                      or should I save it for the claim being made on the correct form?

                      Am I also right in thinking that if a claim is made with a CPR8 form, we can get a solicitor involved and claim those back?

                      Thanks

                      ice.

                      Comment


                        #12
                        It having been issued on the wrong form is not a defence in itself. However, you can use it as a small part of your defence (as per MinnieMoo's draft defence in that thread I linked to - see post #20 link here). Then, if it gets allocated to the correct track (not small claims) as a result, it means you can hire a solicitor and, if you win, claim those costs, but only if you win - so it's up to you whether to take that risk. (n.b. if you do hire a solicitor, make sure they know this field well - the fact that the T's solicitor doesn't know which form to use suggests inexperience. A similarly inexperienced solicitor would be of little, if any, help to your defence - though if you referred such a solicitor to the MinnieMoo thread it ought to be enough to show them how to defend it properly).

                        But, yes, use the other sections to argue your defence now (but not before you've ensured the deposit is returned to T, and done more research), and don't wait to see what happens about the incorrect form. (I assume you are just at the stage where you have to acknowledge the claim - so acknowledge it saying you dispute it and will submit your defence before whatever the deadline is).

                        However, it is not enough merely to quote the relevant sections of the Housing Act; you have to argue why they are relevant to your defence. E.g. "I dispute X because, according to s.XXX, which states "blah blah", the Claimant has no cause of action". Again, read MinnieMoo's draft defence to get an idea of how to word things (that is, if you don't use a solicitor).

                        You need to understand that one of your two primary defences depends on having repaid the deposit in full to the T. Make sure this happens ASAP. (Also, if you haven't already, provide T with prescribed info re the deposit scheme - keep proof of postage, a certificate of postage from a PO with a copy of info sent is enough proof). You can then submit exactly the same argument MinnieMoo has used in her defence in the para. headed "Section 214(4) Housing Act Claim" (as linked to above).

                        If the T refuses return of the deposit, then keep evidence of the refusal, and use this as evidence of T's unreasonableness.

                        Your other defence is that the T has no cause of action pursuant to s.214(1), because the deposit was protected (albeit late) so you therefore complied with s.213(6)(a). The 14 day requirement - s.213(6)(b) - is not specified as a cause of action, i.e. T is not entitled to make the claim (only if deposit is not protected or returned, or if you've given T false info about where deposit is protected). You can't, as you say, "be found guilty" of not complying with the 14 day rule.

                        Here's a link to the statute.
                        http://www.opsi.gov.uk/ACTS/acts2004..._en_19#pt6-ch4
                        s.213-214 are the ones relevant to you. Read and re-read until you fully understand (it took me ages to get my head around it). Then go back and read the MinnieMoo thread again. If you don't understand your arguments, you won't be able to defend yourself properly. Even if you use a solicitor, still do this otherwise you won't know whether they're defending you properly or not.

                        If you don't understand something - ask here for help. But it helps us to help you if you make your questions specific, rather than a general "help I don't understand" if you see what I mean.

                        Sorry so long-winded. I seem to have launched myself on a minor crusade to help LLs who have inadvertently fallen foul of this deposit scheme law - I don't agree with it, as you may have gathered!

                        Comment


                          #13
                          Westminister, thank you very much for your help, it has been invaluable advice.

                          I will read and re-read the points you link to and in conjunction with minnimoo's post try and come up with our defense. I will of course post here the drama as it unfolds and the result when it occurs.

                          Cheers

                          ice.

                          Comment


                            #14
                            Originally posted by westminster View Post
                            (but not before you've ensured the deposit is returned to T
                            Why? She's deposited the money in the scheme, so has complied with the Act and therefore the penalty doesnt apply?

                            Or are you just being overly cautious?

                            Thanks Westy!

                            Comment


                              #15
                              From 213(4):

                              For the purposes of this section “the initial requirements” of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.
                              and more specifically:

                              imposed by the scheme as fall to be complied with by a landlord
                              Does this mean I have to read the DPS conditions to know if I have initially met the requirements, or is it assumed that the requirements of the scheme have been met once the money has been deposited?

                              I would not mind being taken to court if the T felt he had a case. But the T knew we took the first and last months rent (as it was on the receipt we gave him) and so would be used as last months rent. The T really is trying to earn some quick 'bucks' - its frustrating.


                              Another question:
                              Will we be told if the tack is changed from a Part7 to a Part8 and if so, can we turn up to the hearing with a solicitor to speak on our behalf?


                              Thanks

                              ice.

                              Comment

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