Change on 1 of 3 tenant - how does this effect depost protection

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    Change on 1 of 3 tenant - how does this effect depost protection

    Okay...so I had 3 tenants in my house on an ast. Tenant X is the lead tenant and it stipulates in the ast that he is chosen by the tenants to look after the deposit. Deposit is protected in the name of the lead tenant and the other 2 tenants are listed as tenants with the DPS Prosribed information was sent out. One of the 3 tenants moves out at the end of the one year ast last July and other two tenants get a friend to replace him. They all sign ast and tenant X is still the lead tenant. The deposit remained the same and in the name of the lead T and the original two i.e. i didn't update it with the name of the new T - as far as I was concerned the deposit was protected and the lead tenant stayed the same. There is just one deposit and not 3 i.e. one per tenant. Am I going to have any issues in regard of the new T not being specifically name on the DPS site?

    #2
    You should have drafted a new AST when there was a change in the tenants, even though two remained the same, and the deposit should have been re-registered in the name of the new tenants.

    You should always replace any change in tenants with a new tenancy agreement, as that's exactly what is happening.
    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
      Hello Paul,
      Thanks for your reply. I should have said that there was a new AST signed by the two old tenants, and the one new one. I am more concerned about the handling of the deposit.

      Comment


        #4
        Originally posted by macgrl View Post
        I should have said that there was a new AST signed by the two old tenants, and the one new one. I am more concerned about the handling of the deposit.
        Originally posted by macgrl View Post
        Am I going to have any issues in regard of the new T not being specifically name on the DPS site?
        You granted a brand new tenancy in July 2011.

        The deposit is still being held against the first tenancy (i.e. the details registered with the DPS presumably state that the tenancy began July 2010 or thereabouts); that tenancy has long since ended so the deposit should be refunded.

        You could ask the T nicely to repay it to you in respect of the new tenancy, or it's perhaps possible - I don't know - for the deposit to somehow be 'transferred' to a new tenancy within the DPS system, i.e. without passing through the T's hands.

        Comment


          #5
          thank you very much for your reply. they are moving out in July. Would this in effect be treated as though there is no deposit in place for the tenacy running 11 -12? I was concerned that it may be treated as a deposit for 11-12 and that it could be said that I hadn't properly protected it (despite it being in the dps in the name of the same lead T) as i hadn't updated the details with the dps / gone through the practical steps of refunding it and then getting a new one in which case i may be liable for a penalty should the T's push it. How can you do this when the tenannts are actually in the house as will be the case when you renew. If I refund it and then they say they won't give me a new deposit I am stuck..it is not like when they first move in - no deposit no keys.

          Comment


            #6
            Further to my post above if it does turn out to be the case that the deposit is from the old tenancy what penalty is there for that?

            Comment


              #7
              Originally posted by macgrl View Post
              thank you very much for your reply. they are moving out in July. Would this in effect be treated as though there is no deposit in place for the tenacy running 11 -12?
              Yes, unless you can somehow get T to cooperate in a 'transfer' of some kind to the current tenancy.

              I was concerned that it may be treated as a deposit for 11-12 and that it could be said that I hadn't properly protected it (despite it being in the dps in the name of the same lead T) as i hadn't updated the details with the dps / gone through the practical steps of refunding it and then getting a new one in which case i may be liable for a penalty should the T's push it.
              It doesn't matter that the lead T is the same - in law, 'the tenant' (as in all three JTs together) of the previous tenancy is a completely different entity to the tenant of the subsequent tenancy. [T1,T2,T3] is not the same tenant as [T1,T2,T4]. That's why the subsequent tenancy is a new tenancy, because the T changed, just as if you'd granted it to [T5,T6,T7]. The DPS is holding a deposit registered against the previous 2010-2011 tenancy with [T1,T2,T3]; this tenancy has ended and they're entitled to claim it back, but they have no claim for non-compliance.

              BTW, what happened with T3's deposit when he left (assuming he paid a 'share' of it)? More importantly, did T4 pay you any deposit for the new tenancy? as if he did then obviously that should have been protected.

              How can you do this when the tenannts are actually in the house as will be the case when you renew. If I refund it and then they say they won't give me a new deposit I am stuck..it is not like when they first move in - no deposit no keys.
              I agree, it's tricky. You either have to trust the T, or I suppose you could insist on the deposit for the new tenancy being paid separately in advance before you grant it, though of course the T may not have the funds to pay before the previous deposit is returned. It'd perhaps be easier with an insurance based scheme, because you'd be the one holding the first deposit - so you could sign the release form, and agree with T not to physically refund it but to reprotect it against the new tenancy.

              Comment


                #8
                Thanks so much for your reply. That has put my mind at rest. I was very concerned about non-compliance. In some respects it is better that there is no deposit in place than an non-protected one.

                With the original tenancy agreement I don't know how they split up the deposit between them. I was just given the amount cash by the lead tenant for the deposit amount which I protected in compliance with the DPS, correct paper work served etc

                When T3 left no mention was made to me about his "share" indeed as I said I don't know how it was divided up in the first place so I don't know what his share was.

                In respect of T4, he paid no deposit to me at all at any time.

                On the AST for T1, T2 and T4 i.e. the one that was signed last July running 11-12 in the deposit box it does say a deposit of 1100 (I wrongly thought that it would just roll over as the lead T was the same) however I did not receive any money for a deposit from any of them on the signing of that 11-12 ast - is that an issue for me i.e. will a deposit be presumed to have been paid as it was mention in the ast.

                What's the worst case scenario if (very unlikely) they work out that I should have given the original deposit back and haven't yet?

                Comment


                  #9
                  Originally posted by macgrl View Post
                  On the AST for T1, T2 and T4 i.e. the one that was signed last July running 11-12 in the deposit box it does say a deposit of 1100 (I wrongly thought that it would just roll over as the lead T was the same) however I did not receive any money for a deposit from any of them on the signing of that 11-12 ast - is that an issue for me i.e. will a deposit be presumed to have been paid as it was mention in the ast.
                  It could be awkward evidence if there were no background/previous tenancy with the same lead tenant, but there's a good explanation for why the contract says this.

                  In the unlikely event that T1/2/4 claimed against you for non-compliance (all three of them would have to claim as co-claimants), I think you could successfully argue that no deposit was paid in respect of this tenancy; that you (and lead T) wrongly thought it would 'roll over' as you say, but, having discovered that it didn't, you refunded the deposit for the previous tenancy. (Even if this argument failed, and you lost, I think the circumstances are such that the court would only make the minimum award, because you acted entirely in good faith - the recent amendments to the law have given the court the discretion to decide the level of the award. It's no longer a mandatory 3x the value of the deposit).

                  I would release the deposit in DPS to T, and explain your mistake in a letter (keep copy) to the lead T, making it clear that this is a refund of the deposit for the tenancy with T1/2/3 ending xx July 2011. Then I would stop worrying about it; because there is nothing more you can do and, more than likely, Ts will not claim against you.

                  Comment


                    #10
                    Again, many thanks much appreciated.

                    Comment

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