When am I deemed to have received the deposit?

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    When am I deemed to have received the deposit?

    Twenty eight days ago I purchased a flat with a tenant already living in it. Before the sale, the seller had agreed to transfer the tenant's deposit (which he had already taken and says he had protected) into the deposit protection scheme under my name but so far he has failed to do so, despite my requests.

    I understand that normally the deposit must be protected within 30 days of the landlord receiving it but I have yet to receive any money. Will the law nevertheless deem that I received the deposit on purchase of the flat?

    I am trying to determine whether I need take emergency action, such as paying my own money into the protection scheme and calling it the tenant's money. I'm not happy about that but do I have any choice under the deposit protection legislation?

    #2
    You can't be made to protect a deposit you don't have. And in fairness, it is still protected anyway....albeit not yet in your name.

    Comment


      #3
      Originally posted by jghomer View Post
      You can't be made to protect a deposit you don't have. And in fairness, it is still protected anyway....albeit not yet in your name.
      Disagree: s.3 Landlord and Tenant (Covenants) Act 1995 - see....
      http://www.legislation.gov.uk/ukpga/1995/30/section/3
      New landlord takes on the benefits and liabilities of the old landlord.

      I am not aware if the 3xdeposit compo liability has been tested through the courts for such a new landlord yet.. Anyone else???

      In your shoes I'd protect deposit in my name today with DPS- just in case... and get my solicitor to pursue old landlord for the ££££...

      Cheers!
      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...

      Comment


        #4
        Yes, interesting one that.

        Surely though the law cannot penalise a LL though for not protecting a deposit he doesn't have, and also one that is already protected?

        Comment


          #5
          If you're going to go down the route of making a new deposit use the DPS insured scheme. Will cost you £15.
          "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

          What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

          Comment


            #6
            The OP has not received a deposit, there's nothing that says a deposit has to be in advance or even at the start of a tenancy.

            The purchasing LL takes on the benefits and liabilities of the old landlord, but the deposit is the tenant's money not the landlords.
            It's protected, so there's no current liability to transfer.
            The deposit was protected, so that benefit transfers.

            When the seller "agreed" to transfer the deposit, how did they agree?
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              A deposit is a a liability of the landlord: It is money he holds but that does not belong to him.

              Here, there is clearly a transfer of liability because the deposit is the landlord's business. That means the current landlord, not the person that used to be the landlord.
              So OP is, as landlord, liable to repay the deposit to the tenant, whether or not the previous landlord ever transfer the money to him.

              Regarding deposit protection, IMHO as long as the deposit remains validly protected I would think that it is fine.

              Comment


                #8
                @OP

                Have you actually checked there is a deposit registered to the address?
                I offer no guarantee that anything I say is correct. wysiwyg

                Comment


                  #9
                  In my non-legal opinion, T deposit is responsibility of current LL. Purchase price may have included transfer of deposit. If further blame is to be attributed, perhaps it should be against conveyancing soliciitor for failing to confirm disposition of deposit at time of sale?

                  Comment


                    #10
                    If I were o/p I would reluctantly protect an equivalent amount of my own money, just to make sure there is no possibility of being sued for 3x deposit.

                    Comment


                      #11
                      Originally posted by JK0 View Post
                      If I were o/p I would reluctantly protect an equivalent amount of my own money, just to make sure there is no possibility of being sued for 3x deposit.

                      I did something like this once - basically I used my own cash to protect a deposit. My tenant never actually paid the deposit the AST stated he did.

                      When the time came to claim back my deposit through DPS - it was an absolute nightmare! I went round and round in circles and it took about 8 months to get the money back.


                      If you do go down the route of protecting a deposit, make sure it is of the 'insured' kind only.

                      Comment


                        #12
                        Can you insure a deposit you don't have?
                        I don't see how the protection agency could allow that - you're insuring something you don't have.

                        I still don't understand how the deposit wasn't part of the conveyancing process.
                        How did landlord 1 "agree" to it's transfer.
                        If the deposit was protected in a deposit scheme, it's still protected, surely.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          Originally posted by jpkeates View Post
                          Can you insure a deposit you don't have?
                          I don't see how the protection agency could allow that - you're insuring something you don't have.
                          I think that the way to look at it is that when you 'slip into the shoes of the landlord' you take on the liability and as such you are deemed to have the deposit.
                          It does not matter whether the previous landlord did in fact transfer the money to you or not.

                          Comment


                            #14
                            On further consideration, I agree with your point that landlord 2 now "has" the deposit.

                            I still don't think you can insure a deposit that you're meant to have but don't actually.
                            As part of the process of registering a deposit online, I imagine that you have to confirm that you have received a deposit.
                            The agency might end up paying compensation against something that does't actually exist - the actual money might be protected elsewhere (possibly actually deposited and sitting in the TDS somewhere).

                            I don't see the insurance option as viable.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              It also creates a situation where the tenant may have 2 protected deposits on 1 property, and benefit from both?

                              Comment

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