Late Deposit Protection - Covering My Back

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    Late Deposit Protection - Covering My Back

    Hi

    About 2 years ago we had a new set of tenants - I took the deposit and forgot to lodge it within the 30 days. Basically I went into hospital for an operation and it completely slipped my mind. As soon as I remembered, I placed the money in a custodial scheme - so it was lodged about 3 months late. The tenants were fine with this.

    Our tenants are now leaving, they gave 1 months notice but because of the date they serve it, a week after rent due date, we could have insisted on a further three weeks. This hasn't caused any problems as we have lined up new tenants.

    So, I was thinking, on check out date, could I cover my back against a future claim (for not protecting the deposit within 30 days) by getting the tenants to sign a 'deed of surrender' and include a clause that in exchange for leaving the property without adequate notice, they agree not to make any claim against me, for the late protection of the deposit?

    Do you think this would work? Or should we just keep our fingers crossed they don't submit a claim to the courts?

    Many thanks
    Claymore

    #2
    IMO your actions cannot deprive anyone of legal redress, just keep your fingers crossed that Ts are happy to get away with insufficient Notice.
    A simple Deedof Surrender is a good idea, no caveats.

    Comment


      #3
      OK, thanks. They have been decent tenants and at the time didn't make any fuss over the late deposit protection, so fingers crossed.

      Comment


        #4
        I would be inclined not to bring the potential claim to their attention at all myself, but also making sure they know I have been very fair and reasonable in letting them go early.

        Comment


          #5
          I have no intention of letting them know they have a possible claim against us. I'm hoping that as we have been good landlords and they good tenants, nothing will come of my earlier oversight.

          Comment


            #6
            Originally posted by mariner View Post
            IMO your actions cannot deprive anyone of legal redress, just keep your fingers crossed that Ts are happy to get away with insufficient Notice.
            Not sure about that. In civil matters it is possible to sign away the right to sue, for example it is common to due so in settlement agreements during redundancies or dismissals.
            Not sure how it works here as it is not redress or compensation but a penalty. I know some solicitors are of the opinion that a tenant can indeed sign away the right to sue.

            Assuming that it applies here, I think the issues would be the usual ones in such cases: Was the tenant aware of what he was signing? Was he properly advised?

            Comment


              #7
              JJ - I was all content till you said that :-(


              OK, looking at it another way, decent tenants - happy with us as landlords, if they were to sue us, they would have a large initial outlay in order to go to court?

              Comment


                #8
                Originally posted by Claymore View Post
                So, I was thinking, on check out date, could I cover my back against a future claim (for not protecting the deposit within 30 days) by getting the tenants to sign a 'deed of surrender' and include a clause that in exchange for leaving the property without adequate notice, they agree not to make any claim against me, for the late protection of the deposit?

                Originally posted by Claymore View Post
                I have no intention of letting them know they have a possible claim against us. I'm hoping that as we have been good landlords and they good tenants, nothing will come of my earlier oversight.
                No.

                Hidden clauses that you insert into contracts can not then be enforced 'because they signed it.' The world would be a very scary place if that was not the case.

                I think it CAN be waived. Two free parties can contract to do almost anything and I cant think of anything that would prohibit this scenario (compared to for example, two parties can never legally contract to kill a third party). BUT, it would need to be absolutely clear to your tenants and probably for 'consideration' more tangible and substantial than 3 weeks waived rent; given that the minimum penalty awarded for breach is almost certainly greater than 3 weeks rent.

                Originally posted by Claymore View Post
                OK, looking at it another way, decent tenants - happy with us as landlords, if they were to sue us, they would have a large initial outlay in order to go to court?
                Their outlay would be near zero because if they sent you a letter before action you'd be wise to instantly try to settle for 1-2x the deposit.

                And if you did get stubborn then there are plenty of 'no win, no fee' companies branching out in to rental deposit claims nowadays and because of the track it is in, the costs they can claim from you if they win are not as capped as the SCC route (looking at ~£1k minimum).

                Comment


                  #9
                  I shall keep quiet and hope for the best :-)

                  Comment


                    #10
                    Many deposit non-protectiion cases are now being heard by SCC, so no high initial outlay for Ts but good returns.

                    Comment

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