Deposit retained by Landlord

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    Deposit retained by Landlord

    Hiya

    My tenant has been in my flat 3 years and I have recently served her notice. When she moved in, she signed a tenancy agreement (AST) which stated rental payments were £625 a month. The Council were paying her rent through Housing benefit and did not make up the full rental amount. Therefore we agreed any shortfall would be deducted from her deposit which was used up a long time ago. Now the tenant is asking for her deposit back! Will I legally be obliged to repay this, despite the fact that the shortfall rental amounts will be much more than her deposit is worth?

    If she is legally entitled to her deposit back. Can I counter sue for loss of rent?



    Thanks

    #2
    When did her tenancy start, and why did you not sort out the shortfall in rent from day one?

    You can sue her for the missing payments, but if she couldn't/wouldn't pay up while she was in the house, I can't see her paying when she lives elsewhere.

    What does the tenancy agreement state about the deposit?
    Allow tenants to protect their own deposits. I want free money when they do it wrong

    Comment


      #3
      Was the last tenancy agreement signed after 6th April 2007?

      Is the deposit protected in one of the 3 government approved schemes?

      Comment


        #4
        Hiya

        The tenancy started before the 6th April 2007 so it was not in a protected scheme. Once the deposit had been used up, I did not ask her for additional amounts because she was on benefits and I knew it would be pointless trying to get the money. I was happy with her being there because she was a Council tenant and I received very regular payments which I thought was preferable to a private tenant not paying on time. This arrangement however, had a shelf life and now it's time for her to go. I thought she would be grateful she lived in a flat which she was getting a good deal on and that she would move out on amicable terms but now she wants her deposit back and need to know if legally I can retain it for non payment of rent.

        Unfortunately the tenancy does state that the tenant can not use their deposit for missed rental payments but I am hoping she will not pick this up and it wont end up having to go to court.

        My strategy is, if she takes legal action against me for her deposit then I will counter sue for the rental payments.

        Comment


          #5
          Originally posted by Gellybaby View Post
          Hiya

          The tenancy started before the 6th April 2007 so it was not in a protected scheme.
          Was there a renewal contract signed, with a new fixed term, after the original tenancy/after 6th April 2007? Because if so, then deposit protection applies.

          now she wants her deposit back and need to know if legally I can retain it for non payment of rent.

          Unfortunately the tenancy does state that the tenant can not use their deposit for missed rental payments but I am hoping she will not pick this up and it wont end up having to go to court.

          My strategy is, if she takes legal action against me for her deposit then I will counter sue for the rental payments.
          You have no legal basis to retain the deposit for unpaid rent unless the contract says you can. It saying the tenant can't use it isn't quite the same as saying you can't - so read through the entire contract again.

          Your strategy is fine, however. Regardless of anything else, she still owes you the unpaid rent. So let's say the deposit is £500 and the unpaid rent is £1,000 - if she claims against you for £500, then you counterclaim for £1,000. You'll win because unpaid rent is very easy to prove (in fact, it's not you who has to prove it, but the tenant who has to prove you're wrong and she did pay it).

          Enforcing the CCJ is another matter entirely. If the tenant is on benefits, then you are going to find it very difficult; you might succeed in getting it paid off in very small installments. But you may be happy just being able to keep the deposit. And the court fees will be the responsibility of the tenant if she's the one who brings the claim.

          Comment


            #6
            Thanks for your response.

            I am more than happy to walk away with the deposit just to get rid of her and be done with it.

            Just one question would the courts deduct payments from her benefits? I think this would be a stumbling block for her. she might think twice about suing me if her benefits will be affected.

            Comment


              #7
              Sorry forgot to answer your first question re the tenancy. No my tenant signed a AST and it was not renewed after the first six months. It just rolled on to a periodic contract.

              Comment


                #8
                Originally posted by Gellybaby View Post
                Thanks for your response.

                I am more than happy to walk away with the deposit just to get rid of her and be done with it.

                Just one question would the courts deduct payments from her benefits? I think this would be a stumbling block for her. she might think twice about suing me if her benefits will be affected.
                It is difficult, but possible, to have a court order enforced through benefit deductions for a current tenant. You can't do the same for an ex-tenant.

                Comment


                  #9
                  Originally posted by Gellybaby View Post
                  Thanks for your response.

                  I am more than happy to walk away with the deposit just to get rid of her and be done with it.

                  Just one question would the courts deduct payments from her benefits? I think this would be a stumbling block for her. she might think twice about suing me if her benefits will be affected.
                  You have nothing to lose if she does claim against you; the rent she owes you is more than the deposit, so you'll win (if you counterclaim for rent). She, however, would get a CCJ, and if she doesn't pay it it'll affect her credit rating.

                  I would send a letter (keep a copy and proof of posting) to the the tenant with a full schedule of the unpaid rent, so she can see how much she owes you. Tell her you intend to use the deposit to offset the arrears, as per your verbal agreement (though if there is any chance that the T will cause malicious damage in retaliation, it may be advisable to approach the subject more cautiously).

                  In any case, it's far too soon for the T to be asking for the deposit back when you say you've only recently served notice - what type of notice, BTW? Are you using s.8/ground 8 (two months' rent owing and unpaid) or s.21? I ask because it's a good idea to serve both, then pursue via s.8 procedure after 14 days, with s.21 route as a back up plan.

                  Comment


                    #10
                    Originally posted by westminster View Post
                    I would send a letter (keep a copy and proof of posting) to the the tenant with a full schedule of the unpaid rent, so she can see how much she owes you. Tell her you intend to use the deposit to offset the arrears, as per your verbal agreement (though if there is any chance that the T will cause malicious damage in retaliation, it may be advisable to approach the subject more cautiously).
                    I personally wouldn't tell her that. As the tenancy agreement doesn't allow it, she may still see this as her reason to get it back.

                    I would just write a rent statement, and let the tenant look at it, and hopefully reply that she will offset the deposit against the arrears.
                    If she doesn't, then let her take me to court.
                    Allow tenants to protect their own deposits. I want free money when they do it wrong

                    Comment


                      #11
                      Great thanks again for your comments, I am most grateful.

                      I think I will send her a statement as suggested but not mention the deposit and verbal agreement but leave this bit out until absolutely necessary.

                      Just a couple more questions. I have served my tenant with a Section 21a notice (for a periodic tenancy). She is due to move out on the 11th July. She has asked if she can move out sooner than this. I'm sure this is ok but just wanted to check if she still needs to continue paying rent for the duration of her notice period, whether she is there or not?

                      Also, does she need to give me notice of when she is going if before the end of her notice period?

                      Re the section 8 notice. How would I go about doing this? What does this notice entitle me to that the Section 21a doesn't?

                      Thanks

                      Comment


                        #12
                        Originally posted by Gellybaby View Post

                        Just a couple more questions. I have served my tenant with a Section 21a notice (for a periodic tenancy). She is due to move out on the 11th July.
                        The correct notice to serve in a periodic tenancy is a s.21(4)(a). It must give at least TWO months and also expire at the end of a rental period. The periods start on the day after the fixed term expired, so - if the fixed term ended on 11th of the month, then the periods would run 12th to 11th of the month. Is that the case here?

                        She has asked if she can move out sooner than this. I'm sure this is ok but just wanted to check if she still needs to continue paying rent for the duration of her notice period, whether she is there or not?
                        The tenant can pre-empt your notice if there's enough time (say, if you served yours three months in advance). But legally she must give you at least ONE month, also to expire at the end of a rental period. So, sure, she can move out sooner - but she'll still be legally liable for rent under those criteria.

                        Also, does she need to give me notice of when she is going if before the end of her notice period?
                        She doesn't need to tell you when she is physically moving out. The rent liability is all that matters, unless you accept a surrender by operation of law - for example, if the tenant told you she was leaving tomorrow, and on the day after you moved a new tenant in, then the ex-tenant wouldn't be liable for rent after that (and you'd be risking a conviction for illegal eviction).

                        Re the section 8 notice. How would I go about doing this? What does this notice entitle me to that the Section 21a doesn't?
                        S.8 notices are generally served when there is at least two months' rent owing and unpaid (or the equivalent of two months). The notice need only give 14 days (so quicker than a s.21), after which you can apply for possession. You can also get an order for the debt at the same time (another difference to s.21). See
                        http://www.letlink.co.uk/letting-fac...-8-notice.html
                        http://www.letlink.co.uk/GeneralInfo...n/SECTION8.pdf
                        There are countless threads on the forum on this topic.

                        Comment


                          #13
                          Tenancy period

                          Hiya

                          I now have another issue with this tenant. The Council have just written to me (as she is on benefits and they pay her rent) to say the Notice I have served is invalid because it does not expire at the end of a period of tenancy. I am not sure what this means.

                          My tenant signed an AST in April 2007 but my Solicitor said it did not need to be renewed after 6 months as the contract just rolled on. I completed a Section 21 notice to evict her so I do not see how this could be invalid if the tenancy period has expired and the contract has rolled onto a periodic contract.

                          I have written out the notice as it looks


                          NOTICE under section 21 Housing Act 1988

                          To (tenant's name


                          Your landlord(s)
                          Me

                          give(s) you Notice under section 21 of the Housing Act 1988 that possession of the premises at

                          Flat address

                          will be required after the (date)

                          30th September 2007 ([I]This was the end of the 6 month tenancy. I crossed this bit out and wrote) 11th July 2010

                          or, if later, the day after the fixed term of the current tenancy ends.

                          Date of Notice

                          10th May 2010

                          Signed:

                          Myself

                          My address

                          This Notice was provided to me by my Solicitor some time ago when the contract was first signed. Please let me know if you can see anything wrong here.

                          Many thanks

                          Geraldine

                          I will also check it out with my Solicitor who drafted the Agreement but as it is evening, I'm a bit charged and want some answers!

                          Thanks

                          Geraldine

                          Comment


                            #14
                            A tenancy period on a rolling contract (Staturory Periodic Tenancy) will be one calendar month, presuming rent on the original AST was monthly.

                            Therefore, your s21 needed to expire "AFTER 30th August 2010". (well, it was 30th July when you wrote it, but now it's 30th August).

                            The s21 issued by your solicitor would still have been valid providing you hadn't commenced a new contract with the tenant - so, presuming it was issued at the start of the tenancy after the AST was signed and any deposit protected, you could have commenced possession proceeding immediately, without now having to wait for the end of August.

                            Comment


                              #15
                              Originally posted by Gellybaby View Post
                              My tenant signed an AST in April 2007 but my Solicitor said it did not need to be renewed after 6 months as the contract just rolled on. I completed a Section 21 notice to evict her so I do not see how this could be invalid if the tenancy period has expired and the contract has rolled onto a periodic contract.
                              Then I guess you didn't read my post dated 20th May above, in which I said

                              Originally posted by westminster View Post
                              The correct notice to serve in a periodic tenancy is a s.21(4)(a). It must give at least TWO months and also expire at the end of a rental period. The periods start on the day after the fixed term expired, so - if the fixed term ended on 11th of the month, then the periods would run 12th to 11th of the month. Is that the case here?

                              Comment

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