Deposit invalidates Section 21

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    Deposit invalidates Section 21

    Hi Everyone.

    I have come across another slap in the face for good landlords that I wasn't aware of, and so just in case any of you haven't heard of this, I thought I would put it to you.

    I have a Trouble Tenant I am trying to gently usher out of my property. The section 21 is coming to a close. I called up the NLA to go through the claim for possession form with them as the tenant has informed me they will not move , only to be told that even though I received a deposit two years after the tenant moved in, as I received it only after I had served the section 21 (one of the reasons I served it, might I add), that my section 21 is invalid and I have to start again, from scratch.

    It's incredibly wrong.

    The claim for possession court form asks whether the deposit was protected at the time of serving it. In my case it was not as I had not been given a deposit at that time. I subsequently received the deposit, and protected it and everything as i should, but I have been told judges are very tenant friendly and likely my claim for possession will not see the light of day.

    So beware. I don't know what to tell you, but if you have not received a deposit at the time of serving a section 21, accept it only with the knowledge it will set you back again.

    #2
    Yeah! Most people know this.
    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


      #3
      Originally posted by Paul_f View Post
      Yeah! Most people know this.
      That's right Paul, we do. However the OP says that when he served the S21 there was no deposit paid. How does a deposit invalidate the S21 if it has been paid later? Would the dates on the forms or receipts not defeat this nonsense?
      I offer no guarantee that anything I say is correct. wysiwyg

      Comment


        #4
        Originally posted by jta View Post
        That's right Paul, we do. However the OP says that when he served the S21 there was no deposit paid. How does a deposit invalidate the S21 if it has been paid later? Would the dates on the forms or receipts not defeat this nonsense?
        I'm only reflecting the OP stating what the form asks, and he thinks the S.21 Notice might be invalid. I agree..
        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


          #5
          Originally posted by Paul_f View Post
          Yeah! Most people know this.
          Most people know what?

          Reading this, A tenant could have paid no deposit, and then put £10 into my bank account and then invalidate my Sec 21.
          Allow tenants to protect their own deposits. I want free money when they do it wrong

          Comment


            #6
            Originally posted by Myohmy View Post
            It's incredibly wrong.
            You're not going to like this reply.
            What's 'incredibly wrong' is people who plunge ahead and let valuable properties without a full understanding of what they're doing. You're no worse in that respect than many other LZ members who, having screwed-up, post similar plaints about how awful life is and how rotten they've been treated. They haven't, in fact; they just failed to take any advice (and whoever's fault could that be?)
            NOTE: no, I'm not getting at you. I'm merely astonished at anyone risking his/her life savings in such a way.
            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


              #7
              Bad day, Jeffrey?

              Comment


                #8
                The relevant parts of section 215 HA 2004 say:

                (1) If a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when—

                (a) the deposit is not being held in accordance with an authorised scheme, or

                (b) the initial requirements of such a scheme (see section 213(4)) have not been complied with in relation to the deposit.

                (2) If section 213(6) is not complied with in relation to a deposit given in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy until such time as section 213(6)(a) is complied with.


                The only logical interpretation is that if you serve a section 21 notice and then take a deposit, the notice must be valid. The reference is to the notice being given and not to the notice having effect.

                Comment


                  #9
                  So, to simplify matters for people like me, if I want to serve a section 21 notice on a tenant who took up his tenancy in, say 2005, whose deposit I am holding because there was no such thing as deposit protection then and whose tenancy agreement has been a statutory periodic one ever since, can I serve a valid S21 notice, or must I protect the deposit before I do so?

                  P.P.
                  Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

                  Comment


                    #10
                    No- you need not protect it but can merrily serve T under s.21 of the 1988 Act.
                    By s.213(1) of the 2004 Act, protection applies only to a deposit from the time when it is received (so n/a if it was received pre-060407).
                    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


                      #11
                      Originally posted by thesaint View Post
                      Most people know what?

                      Reading this, A tenant could have paid no deposit, and then put £10 into my bank account and then invalidate my Sec 21.
                      I fail to see why this might be, and is patently not the case!
                      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


                        #12
                        Thanks for your responses.

                        Just quickly. I wanted to let others know about this in case they found themselves in a similar situation. I thought this might be something others might not know as the NLA legal rep I spoke to had not come across this situation. I've gleaned lots of good information from this forum and wanted to share something I had learned.

                        I didn't have a deposit because the council representative I met at the property at the time of signing the agreement with the tenant assured me that for administrative reasons the check follows, and at that time I very much believed private landlords could work well with the social sector. I now feel very differently!

                        Jeffries - people make bad decisions all the time! But you are right, it could be worse. I certainly won't be making that mistake again, no matter how hard the heart strings are tugged!

                        Take care all. MOM

                        Comment


                          #13
                          Originally posted by Myohmy View Post
                          the NLA legal rep I spoke to had not come across this situation.
                          Put my argument to him and see what he says.

                          Comment


                            #14
                            Originally posted by Lawcruncher View Post

                            The only logical interpretation is that if you serve a section 21 notice and then take a deposit, the notice must be valid. The reference is to the notice being given and not to the notice having effect.
                            At least one judge agrees with you (and I'm sure most of them would!). Quoting from this link on the Landlord Law Blog:

                            Tenancy deposits – s21 notice served before deposit paid is valid
                            Mr O’Brien granted Mr Hill an assured shorthold tenancy from 9 June 2008. No deposit had been paid to him. On 12 June he served a section 21 notice. The deposit was not paid to him until 2 July, and he protected it with the DPS on 6 July.

                            But when he subsequently issued proceedings for possession, using the accelerated procedure, relying on the notice served on 12 June, the claim was struck out. On the basis that he had not complied with the tenancy deposit regulations.

                            The Judge (District Judge Silverman at Edmuntion County Court) had given Mr O’Brien permission to apply to restore the claim, and this he duly did, arguing that the s21 must be valid as it was impossible for him to protect a deposit he had not received yet. DJ Silverman accepted the argument and the possession order was made.

                            (O’Brien v. Hill, Edmuncton County Court, 22 September 2009, DJ Silverman)

                            Note: 18 January 2010 – I have just been contacted by DJ Silverman regarding this case. He tells me that at the time he made the order, it appeared, from the paperwork before him, as if the deposit had been paid but not protected, at the time the section 21 notice was served. Which is why the claim was dismissed. Subsequently the landlord’s solicitors produced evidence to show that the deposit had not in fact been paid at the date of service of the notice. Upon learning the true situation, DJ Silverman made the order for possession without the need for a hearing.

                            This goes to show how important it is to be careful in drafting applications for possession, to get the true facts before the Judge.

                            Apologies to DJ Silverman for any inadvertent misrepresentation of the facts of the case in the earlier version of this post.

                            Comment


                              #15
                              Originally posted by Paul_f View Post
                              I fail to see why this might be, and is patently not the case!
                              The original post says that a deposit was paid after the Sec 21 was issued?
                              Allow tenants to protect their own deposits. I want free money when they do it wrong

                              Comment

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