Unprotected deposit

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    Originally posted by jjlandlord View Post
    Let'e be honest, the law is still very badly drafted and the penalty disproportionate even with the changes from the Localism Act.
    The law is very badly drafted.

    I don't think the penalty is disproportionate, although I'd personally give the courts wider discretion.
    A minimum of one times penalty is too much when the landlord wasn't the landlord when the deposit was paid, and three times is too little when the landlord is simply a lying toe rag.

    I wasn't a landlord prior to 2004, but can easily understand the difficulties a tenant would have if the landlord didn't have to protect the deposit.
    Moreover 12 years later, there are few excuses for not following the law even if it's daft.
    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).


      Originally posted by Raiden328i View Post
      See this is where I am confused and no one seems to really know or even have a real answer.

      Yes I broke the law. But I never kept the money.

      ... My solicitor thinks there is no case because they had there money back and I have proof they where more then happy with me keeping £182 for ending the contract early.
      There is a real answer. You broke a law, and the law prescribes a specific penalty for non-compliance with that law. The wording of that law has nothing to do with who owes who what amount - debt is not relevant.

      You didn't protect your tenants' deposit. They would have had no recourse to dispute deductions through an independent adjudicator, to which they are entitled. The deposit remained their money for the duration of the tenancy, until/unless agreed otherwise. Therefore their money was put at risk as it was not held or insured with a scheme.

      You could have installed a jacuzzi and a sauna, or walked their dog for them every day during the tenancy. They'd still have just as much right to bring this action, and if it goes to court (notwithstanding a 'wrong' decision from the judge), they WILL win. And since you never protected the deposit, they will probably be awarded somewhere towards the maximum end of the scale.

      Your solicitor sounds like they don't specialise in housing, and you should find one who does.


        Let's not go over the top...


          You inadvertently drive at 45mph on a very quiet, rural 30mph road. Dry, clear, no other traffic. Nobody hurt, no money taken by you from anyone.

          You may get fined.

          If one doesn't like the law here there are two obvious options...
          a) Move elsewhere...
          b) Lobby to get it changed...
          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...


            I understand that breaking the law can result in a fine, but don't understand why this has to go to the tenant who didn't lose anything as a result. When you break the law by speeding, you get a ticket and the money goes to the tax payers, not the car you passed speeding (who could have been at risk of your actions, but didn't, so no personal claim).


              The penalty is given to the tenant to encourage them to sue the landlord in the first place.
              It's an incentive to encourage them to police the landlord and an incentive for the landlord to comply with the regulation.
              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).


                The amount of deposit eligible for penalty was £690. You can make permitted deductions from orig deposit, but not from Penalty
                Once you have paid due Penalty, nothing to stop you suing T for remainder in SCC, knowing Court will soon pay your Penalty to Ts.


                  OK this issue is still on going as the tenant now is disputing how much deposit he gave me and we have a court date for march and his solicitor is giving me one last chance to settle.

                  Basically he gave me £1380 up front and so half that is a deposit which he got mostly back but the other half a month up front but now he says its £1380 security deposit and he never paid any rent up front. So he now wants £2760 plus legal costs. My solicitor has read the tenancy agreement and now thinks he has made a error with his claim?

                  The property rented was in my wifes name and they both signed the contract and I acted as the agent/middle man. Now the contract says if you leave early you need written confirmation from the landlord which neither me or my wife gave. It also says you can only leave early if there is a break clause which there is not. Working out the rent he is almost 3 months in arrears so after speaking with my solicitor and the courts I can issue a counter claim for abandonment and lost rent.

                  My solicitor says we should offer £690 otherwise we will sue for the rent he owes.

                  My question is can I do that even tho the deposit is not registered? This solicitor friend of mine says if they do not accept then the fine amount the judge issues could be offset against the money he owes me. Do you think this is possible even tho the deposit was not registered?


                    This is confusing. You say in your OP that they had a 6 months contract and they asked to leave one month early and you agreed. So how did it end up being didn't give agreement and it was three months? Are you saying that you agreed only verbally that they could leave early (so will dispute in court that you ever did) and that if he didn't pay upfront, he owes the month he left early, plus the month not paid at the end of it? How do you get to three months?

                    I suppose if it is your word against his, you can try that, but it is turning to be a very dishonest situation all around.


                      What paperwork do you have that you can use as evidence for the original amount of deposit being £690? Do you have something from when they moved in? Or when you negotiated the deduction, did one or both of you mentioned the £690 figure without the other challenging that statement?

                      How much was actually paid when before / at the start of the tenancy? If say £1380, and they only next paid £690 a month afterwards, and your tenancy agreement state that the 1st month rent is due in advance, then that's also evidence.

                      You never did clarify how long the tenant was there, and in relation to the fixed term etc. If as I asked, there was a 6 months fixed term and T left after 5, then T only owe you one month rent. However, you also said you agreed to the early surrender. In which case, the T don't owe you anything in rent.

                      In general can you counterclaim, in normal court claims yes, but I've also read a lawyer that specialise in this area say the LL can't counterclaim on a Part 8 claim for deposit penalty.
                      I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                      I do not answer questions through private messages which should be posted publicly on the forum.


                        Ill do my best to explain

                        From what I can see he moved in May and he left in Sept. When he wanted to leave he emailed me but I only verbally said yes OK fine. So now I am saying in the counter claim he just up and left and I gave back his deposit as I didn't want any trouble.

                        So from what I can see he only owes the last month but as he is now changing his story it works out he owes more money. He now says he paid me £1380 so if I have worked this out right and he sticks to that story month 5 and 6 he never paid and he has no conformation from me or my wife to say this was accepted. He had back about £480 so if he says the deposit is £1380 and he has had back £480 he is in arrears about £900 plus any other cost like cleaning,painting and broken items. Not a lot but iv'e been told stick it all in.

                        My solicitor friend hopes it will make the tenant think and they will hopefully want to settle as no one really knows how much he would win and then there is a chance I could win with my counter claim.

                        The trouble is and this is why he is now changing his story in the tenancy agreement my wife wrote a figure saying £1380 in the deposit section as that was what was paid at the time up front. We had a argument at the time over it as I said to her that's not right but she says it was because we got it all in one lump sum just before he moved in but now its bite her on the backside being honest


                          Yes it has.

                          If one of you signed an agreement wih the deposit showing as that amount it's going to take a quite amazing bit of arguing to make it go away.
                          It's not impossible, and, if there's anything in writing with two separate amounts it might help and you might want to be ready to argue that the tenant owes you another month's rent if they didn't pay the first month in advance if you lose the argument that it wasn't a deposit.
                          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).


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