How long does a tenant have to act over an unprotected deposit?

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    How long does a tenant have to act over an unprotected deposit?

    Hi,

    I want to serve a section 21 on a AST tenant who's been with me for 6 years and 4 months.

    The tenancy was arranged by a agent who didn't protect the deposit at the time. After over a year of wrangling I got the deposit back from the agent, protected it myself (via myDeposits) and fired my agent.

    So, in short the tenancy has been in place for 6 years and 4 months, and the deposit has been protected for for about 5 years.

    If I serve a section 21 and the tenant gets arsey (technical legal term!) can he sue me for the deposit being unprotected, or has he missed his chance? I've read somewhere on this forum that a tenant has 6 years to take action over an unprotected deposit, but six years from when? Six years from when the tenancy started? (in which case I can breathe a sigh of relief) - or six years from when the deposit actually got protected (in which case I could still be in trouble!)

    Any advice gratefully received!

    Thanks

    #2
    T can sue for deposit non-protection up to 6 yrs rom date when T paid deposit ie +30 days from start of T, but IMO any s21 served will be invalid if deposit has not been returned in full before s21 Service.

    Comment


      #3
      Originally posted by mariner View Post
      T can sue for deposit non-protection up to 6 yrs rom date when T paid deposit
      So if he paid the deposit on the day the AST started and he moved in, then he has 6 years from the date start of the tenancy?

      any s21 served will be invalid if deposit has not been returned in full before s21 Service
      Sorry, please can you clarify this? in the first part of your reply I think you're saying the tenant has left it too late to demand the deposit be returned, but you also seem to be saying I should still return the deposit?

      Comment


        #4
        It depends if there have been any tenancy agreements since the first one.

        You can't issue a valid s21 notice if the deposit wasn't protected initially without returning the deposit.
        If there have been subsequent tenancy agreements, which began after the deposit was protected, it is possible to issue a valid s21 notice without returning the deposit.

        You are not entirely safe from the tenant making a claim after 6 years.
        That's the standard limitation on legal action, but if the tenant isn't aware of the non-protection until a much later date or has discussed it with you in the meantime, the 6 year clock can be reset.
        It will depend on the tenant being arsey, you trying that as a defence and a court accepting it.

        Returning the deposit makes it harder for the tenant to sue you anyway, as they have no debt to collect.
        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


          #5
          Originally posted by jpkeates View Post
          You are not entirely safe from the tenant making a claim after 6 years.
          That's the standard limitation on legal action, but if the tenant isn't aware of the non-protection until a much later date or has discussed it with you in the meantime, the 6 year clock can be reset.
          It will depend on the tenant being arsey, you trying that as a defence and a court accepting it.
          I'd like to see that...

          Comment


            #6
            Originally posted by jjlandlord View Post
            I'd like to see that...
            See what, the court accepting the claim or the defence?
            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
              ok, to clarify/correct the original post. The tenant has been on the same AST since he moved in March 2010, and the deposit was finally protected one month after the 6-May-2012 deadline.

              From some internet research it seems there's a somewhat vague rule about having to start legal action within 6 years of an event. But the question in this case is still six years from when? if it's six years from when he moved then he's 4 months 2 late, if it's six years from the moment the deposit finally did get protected then he's got another 2 years to claim.

              I'm not sure if this is relevant, but the deposit was for 1 months rent, which happens to be about how much he owes me in arrears. I was going to serve a section 21 simply because it seemed the easiest option, but it looks like I may have to serve a section 8 grounds 10 & 11 (being and arrears and being persistently late with payment)

              Comment


                #8
                I believe it is 6 years + 30 days from when you or the agent received the deposit. The 30 days being the time you have to protect it!

                Comment


                  #9
                  The limitations legislation makes it 6 years from the point of the breach which is 6 years from 30 days after the deposit was received.
                  My point about it not being an absolute limit notwithstanding.

                  Issuing a section 8 notice ion the grounds noted s unlikely to result in repossession.
                  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


                    #10
                    Originally posted by jjlandlord View Post
                    I'd like to see that...
                    Originally posted by jpkeates View Post
                    See what, the court accepting the claim or the defence?
                    Originally posted by jpkeates View Post
                    but if the tenant isn't aware of the non-protection until a much later date or has discussed it with you in the meantime, the 6 year clock can be reset.
                    I guess this part.
                    Allow tenants to protect their own deposits. I want free money when they do it wrong

                    Comment


                      #11
                      Indeed. Compliant protection requires giving documents to the tenant therefore "Oh I didn't know it wasn't protected" will not get much mileage.

                      Discussing the matter makes not difference.

                      Comment


                        #12
                        I'd be interested in knowing of a claim that's been successfully defended as being statute barred.
                        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
                          I'd be interested in knowing of a claim that's been successfully defended as being statute barred.
                          I think you have it backwards.
                          Allow tenants to protect their own deposits. I want free money when they do it wrong

                          Comment


                            #14
                            If my interpretation of the Limitation Act 1980 is correct, the "default" is that time starts to run when the cause of action arises and not when the claimant knows he has a claim. If you look at, say, sections 2 and 5 it is simply stated that the period starts to run from when the cause of action accrues. There is no mention of the claimant having to be aware that he has a claim before time starts to run. That is in line with the intention of the Act, which is to give potential defendants certainty. There is no certainty if the defendant does not know when time starts running.

                            Sections 2 and 5 can be contrasted with section 11 which deals with personal injuries. Sub-section (4) provides that:

                            the period applicable is three years from—

                            (a) the date on which the cause of action accrued; or

                            (b) the date of knowledge (if later) of the person injured.


                            That is entirely reasonable as the injury may not be immediately apparent.

                            The fact that the Act specifies that knowledge is required for one purpose emphasises that it is not required for others where it is not specified that knowledge is needed.

                            Comment


                              #15
                              Originally posted by jpkeates View Post
                              Returning the deposit makes it harder for the tenant to sue you anyway, as they have no debt to collect.
                              Hiya, I disagree re: that last line.

                              The action the tenant can take if their depoist is returned is not related to debt collection - the up to 3x deposit penalty is just that - a penalty. Returning the deposit in full has absolutely no effect on their ability to sue successfully, though it may soften a judge's approach in that they may not award the maximum sum available.

                              The Housing Act is prescriptive in its wording so that upon application to the County Court for failure to comply with s213 (ie protecting D & serving PI), a judge MUST order the 1x-3x penalty. They could come down at the lower end of the scale if they felt like it, and they probably would in OP's case since he tried to do the right thing and appointed a pro letting agent - who subsequently let them down.

                              Obviously, this is my interpretation but I've seen it in practice - returning the deposit and trying to use that as a defence did not make any difference and the full 3x was awarded.

                              However having said that if 6 years since breach has passed OP is probably safe. I wouldn't like to run it past a judge though.

                              Comment

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