Deposit oversight

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    Deposit oversight

    Have just been reviewing a file of a tenant who entered into a tenancy agreement in July last year . For some reason the deposit has not been lodged.Very bad oversight ! if I lodge it immediately, will this still present problems if there are any issues with the tenant at a later date (invalidating section 21's etc) I do not anticipate this tenant leaving anytime soon but would appreciate some insight on what the position is when a genuine administrative error has been made.

    #2
    You only option is to return the deposit to the tenant as soon as possible
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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      #3
      But if the deposit is referred to on the tenancy agreement , then the tenant could still claim that I had it??

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        #4
        The law has recently been amended, and your failure to protect the deposit and provide T with the prescribed information within 30 days of receipt means that you are now unable to serve a valid s.21 notice unless you first return the deposit to the T.

        You are also exposed to a non-compliance claim by the T, with a sanction of between one to three times the value of the deposit. The level of the award will depend on the particular circumstances of the case, at the discretion of the court.

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          #5
          If the tenant is honest and fair(some are), tell them what has happened, and ask them if they would pay you the deposit again.
          You then protect it, and move on.

          Make sure you have paperwork to support your actions.
          Allow tenants to protect their own deposits. I want free money when they do it wrong

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            #6
            You can still protect the deposit now, you don't have to return it. If, and only if, the tenant starts court action, the court may impose a sanction and order that the depost is either returned or protected.
            By protecting the deposit now, this will go in your favour if court action was commenced.

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              #7
              Originally posted by hgvseven View Post
              You can still protect the deposit now, you don't have to return it. If, and only if, the tenant starts court action, the court may impose a sanction and order that the depost is either returned or protected.
              By protecting the deposit now, this will go in your favour if court action was commenced.
              The OP has asked about "invalidating Sec 21's". Your solution would not suffice.
              Allow tenants to protect their own deposits. I want free money when they do it wrong

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                #8
                I would suggest that there are hundreds if not thousands of deposits that have not been protected and many of these will be private landlords. The tenants will have six years after the deposit should have been protected to bring any claim against you.

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                  #9
                  Unfortunately due oversight, a property I let out the deposit has not been protected. If I pay the deposit back to the tenant or draw up a new tenancy agreement to say new contract now in place with a deposit collected. A further letter signed by Tenant confirming £500 has been paid back to them from the previous contract. Will that be sufficient?

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                    #10
                    Interesting question.

                    IMHO, if you do not refund the deposit but agree to a new tenancy with the tenant, then immediately protect the deposit you should be fine, at least in terms of being able to issue s.21 notices.

                    Of course this fully relies on the tenant's goodwill...

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                      #11
                      Originally posted by thesaint View Post
                      If the tenant is honest and fair(some are), tell them what has happened, and ask them if they would pay you the deposit again.
                      You then protect it, and move on.

                      Make sure you have paperwork to support your actions.
                      Oh please. If a LL hasn't protected a deposit then the tenant has every right to bring a non-compliance claim; honesty and fairness have nothing to do with it. Should landlords start charging an 'honest' and 'fair' rent, instead of whatever the market will bear? Maybe the LL should pay the interest he's earned on the deposit to the tenant, along with some profit to compensate for the fact he's had the money sitting in his account while the tenant has not? Would that be honest and fair?
                      Disclaimer:

                      The above represents my own opinion, derived from personal knowledge and should not be relied upon as definitive or accurate advice. It is offered free of charge and may contain errors or omissions or be an inaccurate opinion of the law. I accept no liability for any loss or damage suffered as a result of relying on the above.

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                        #12
                        Originally posted by bhaal View Post
                        Maybe the LL should pay the interest he's earned on the deposit to the tenant, along with some profit to compensate for the fact he's had the money sitting in his account while the tenant has not? Would that be honest and fair?
                        http://www.legislation.gov.uk/uksi/2...article/2/made

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