Deposit on Periodic Tenancy

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    Deposit on Periodic Tenancy

    Hi, can anyone shed some light on where I stand on a Periodic Tenancy with and usercured deposit. I understand on an AST penalties are incurred up to three times the deposit. As the AST was only for 6 months and ended in 2010 no new contract was drawn up or deposit returned.
    Thanks

    #2
    To bring a case against your landlord in the courts you would have to do it paying full legal costs as this action is does not come under the small claims County Court procedure.



    Freedom at the point of zero............

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      #3
      Deposit needs to be secured within 30 days of receipt at start of tenancy. If tenancy is allowed to run to periodic, nothing changes - lack of protection and associated penalties still apply.

      Also, LL would need to return deposit in full to enable Section 21 notice to apply end tenancy to be valid.

      As above, deposit penalty claims can be costly, but should tenant claim successfully, there is a chance their court costs can be awarded against landlord, as well as up to 3x the deposit value.

      Legislation was tightened in the Localism Act last May, requiring all deposits (even those paid before that date) to be secured.

      I assume you are the landlady in this scenario?

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        #4
        Your 'periodic tenancy' is still an AST and therefore subject to the requirements of the 2004 Housing Act (as amended by the 2011 Localism Act).

        That does mean that a landlord is exposed to a penalty of up to 3 times the deposit. As Interlaken says, such a claim should be dealt with in the 'multi track' and that may dissuade your tenant, BUT, if it doesn't, the chances are that you will be ordered to refund those fees (£1k +} and any legal costs (solicitors - £150/hr?) to the tenant. In view of that, it makes sense to try and reach a settlement before these issues come to court.

        You will not be able to issue a valid section 21 notice until you refund the deposit to the tenant but that does not remove the possibility of legal action.

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          #5
          Thanks for your responses. i was told that if you return the deposit in full before the end of the tenancy then the tenant cannot bring charges/penalties against you.

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            #6
            Sadly no. Tenant can even persue claim after they have moved out, and even if you return the full deposit now.

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              #7
              Originally posted by landlady21 View Post
              Hi, can anyone shed some light on where I stand on a Periodic Tenancy with and unsecured deposit. I understand on an AST penalties are incurred up to three times the deposit. As the AST was only for 6 months and ended in 2010 no new contract was drawn up or deposit returned.
              Thanks
              Assuming you did not grant a new fixed term contract, then a statutory periodic AST arose, automatically, under s.5 Housing Act 1988, after the fixed term tenancy expired, replacing the fixed term tenancy.

              In other words, the tenancy effectively 'continued'.

              Originally posted by landlady21 View Post
              i was told that if you return the deposit in full before the end of the tenancy then the tenant cannot bring charges/penalties against you.
              You were told wrongly.

              There are two different sanctions for failing to protect the deposit within 30 days of receipt (there is also a requirement to provide the prescribed information within the same deadline but it's somewhat beside the point if you've failed on the first count).

              Sanction A: under s.215 Housing Act 2004 a LL who has not complied with deposit protection requirements must first refund the deposit before he can serve a valid s.21 notice.

              Sanction B: under s.214 a LL who has not complied is exposed to a claim by the T for between 1x and 3x the value of the deposit for non-compliance. Late compliance is not a defence.

              Comment


                #8
                Originally posted by landlady21 View Post
                Thanks for your responses. i was told that if you return the deposit in full before the end of the tenancy then the tenant cannot bring charges/penalties against you.
                That WAS the case but the Localism Act 2011 closed that loophole.

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