When am I deemed to have received the deposit?

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  • jjlandlord
    replied
    I don't think that the new landlord ever receives the deposit in the sense of the deposit protection legislation.
    If there is a deposit, it was received by the previous landlord.

    Because the tenancy is assigned, I think that for this purpose the previous and new landlord are the same, they are the landlord of the tenancy.

    To me, this means that:
    - As said the new landlord, as the landlord, has received the deposit. Whether a transfer of money between him and the previous landlord has occurred is not relevant. If a new tenancy is granted he will have to make sure the deposit is protected in all cases.

    - If the deposit is already protected, then there is nothing to do. But of course the new landlord may want the protection to be transferred in his name.

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  • theartfullodger
    replied
    Or, better for tenant, 2 unprotected deposits!!! Get both back & sue for 3x both....

    Cheers!

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

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  • jpkeates
    replied
    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.

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  • jjlandlord
    replied
    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.

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  • jpkeates
    replied
    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.

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  • Claymore
    replied
    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.

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  • JK0
    replied
    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.

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  • mariner
    replied
    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?

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  • jta
    replied
    @OP

    Have you actually checked there is a deposit registered to the address?

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  • jjlandlord
    replied
    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.

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  • jpkeates
    replied
    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?

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  • Wannadonnadoodah
    replied
    If you're going to go down the route of making a new deposit use the DPS insured scheme. Will cost you £15.

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  • jghomer
    replied
    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?

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  • theartfullodger
    replied
    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!

    Leave a comment:

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