MCOL pitfalls and advice

[MayallRoad]

Dear All - yet another post on deposits and s21. My tenant has been in arrears of £2,500 - £4,000 for much of his tenancy (which started September 2016), lied in his references and has been lying about various attempts to pay money by bank transfer. I discovered he did it all and worse in his previous tenancy which ended in court and cost his previous landlord 5 months rent and much stress. So, I want him out and want to serve s21 as soon as I can which will be later this month. However, I protected the deposit in the DPS late. I've released it for the tenant to reclaim, but he won't, presumably knowing that a late-protected deposit in the DPS protects him from s21. How can I return the deposit to him another way, enabling me to serve s21, if he refuses to log in to the DPS and take it? For as long as it's protected, I can't serve s21.
This is a real Catch 22.... (though should be Catch 21). All help and moral support gratefully received.

[jjlandlord]

If you have released it to the tenant and you have evidence of that then it should be fine.

[jpkeates]

You need to return the deposit to the tenant before you can serve a valid s21.
Releasing it to the tenant via the DPS was an error and you should cancel that.

Send the tenant a cheque with a covering letter that explains that you are returning their deposit (it doesn't matter if they cash it or not).
When the tenancy has ended, use the single claim process to recover the funds from the DPS.

Or agree with the tenant to offset some of the arrears with the deposit, which also returns it to them.

Or evict using s8, which is not affected by the deposit issue (although the judge might award the tenant the penalty due for the non-compliance with the legislation).

[MayallRoad]

Thanks for such quick replies. Are you completely sure that sending a cheque is sufficient? Would a court accept that?
If the deposit is actually in the DPS, whether released for him to reclaim or not, he could say it was protected but protected late, invalidating s21.
Why is releasing it to him via the DPS an error?

The tenant knows all the tricks in the book, so I need to get this right to avoid any claim that s21 is invalid.
In his last tenancy, he dragged things out for months after s8 was served by breaking a window and making claims about repairs.

many thanks for your wise replies!

[jjlandlord]

You need to return the deposit to the tenant before you can serve a valid s21.
Releasing it to the tenant via the DPS was an error and you should cancel that.

No, that should be fine. It is the only way to return a deposit held in a custodial scheme and I recall there is a case on this that confirms it.

[jpkeates]

No, that should be fine. It is the only way to return a deposit held in a custodial scheme and I recall there is a case law on this that confirms it.

In which case I stand corrected.

I believed, wrongly it seems, that the return via the scheme was an offer, which the tenant is being asked to accept (and can, therefore, not accept).

[MayallRoad]

A reference to the specific case law on this matter would be REALLY useful.
Thanks. The DPS were helpful but inconclusive on the phone...

[KTC]

Do as jpkeates says.

Nearly Legal have reports of two different cases where a county court judge differed in their views of whether action similar to yours were enough. [1], [2] So what you've done may be enough, but return a cheque and you'll be sure.

[jjlandlord]

Do as jpkeates says.

Nearly Legal have reports of two different cases where a county court judge differed in their views of whether action similar to yours were enough. [1], [2] So what you've done may be enough, but return a cheque and you'll be sure.

Those 2 cases were different so the courts did no really differ. It is important to understand the differences.

If you send a cheque you return the deposit and pay the tenant an amount equal to the deposit on top of that.

How do you return a deposit that is in a custodial scheme, otherwise?
The reasonable and logical way is to do as in [1] above, and the court agreed.

[cupcakeli2717]

I had a similar experience and on the advice of a eviction specialist. I gave the deposit back in cashier's order in tenant's name.

[jpkeates]

How do you return a deposit that is in a custodial scheme, otherwise?

You spend a long time explaining things to the DPS, I'd imagine.

The problem is that once you cock up the deposit process, there isn't any way back that isn't risky/difficult/costly.
It's not that hard to set up a custodial deposit with the DPS* and it's not like this is new legislation.

*printing the PI and so on and then scanning it is another issue.

[MayallRoad]

Could the tenant not defend against s21 on the grounds that the deposit was still protected and protected late even though you gave a cashier's order in the tenant's name?

[jpkeates]

A cashier's order (and a cheque) are essentially "money", so the tenant has their money back.

[jjlandlord]

It depends how fast you want the tenant out.

Releasing the deposit from the DPS and informing the tenant should be fine, as said. There is of course a chance that the court will be in bad mood so that'd cost £355 plus several months in that case, but that would likely be cheaper (but longer) that throwing money at the issue by sending a cheque to the tenant.

You spend a long time explaining things to the DPS, I'd imagine.

What would be the purpose of that?

[jpkeates]

Either making the single claim to recover the funds (which the tenant might challenge) or, more likely, making a claim for all of the deposit and going to adjudication if the tenant tries to get their money back twice.