Landlordreferencing.co.uk – Forum

The landlords in these
cases did not like the solution but at least they have one. From 6^th
May 2012 the only option is to give 100% of the deposit back, unless the tenant
agrees that you can keep some of it to cover damage or losses, and hope that
the tenant does not take legal action to gain up to 3 times the same amount
because it was not protected.

These are just 3 of the stories that I have heard in the
last few days from landlords who have unprotected deposits

• A tenancy has just come to an end and the tenant
  is moving out with several weeks of rent outstanding and damage to the
  property. The signed AST states that the tenant paid a deposit but the money
  was not in fact paid. The tenant is now asking for the deposit back otherwise
  he will take legal action to get 4 times the deposits back because the landlord
  has not protected it.

Landlord question “ Can he do this even though he has not
paid and he owes me money.  Can’t I just
say that the deposit is being kept to cover the rent arrears?”

My reply “ Yes you can but that will not prevent the tenant
taking legal action because you did not protect it and he may get up from the
full amount of the deposit that was paid according to the AST and up to 3 times
that amount on top”

Landlord “But he can’t prove that he paid it and he owes me
money”

My reply “He does not need to prove he paid it, you signed
an AST stating the amount of deposit and you would need to prove that it was
not paid – how will you do that?”

Landlord “What can I do?”

My reply “Protect the deposit (this happened last week it
would not be too late) and give him the protection certificate and prescribed information.
If you have proof that he has not paid and that he has caused damage you can
fight your corner if he goes for arbitration. 
If you had called me next week you would have big problems because you
have held the deposit longer than 30 days and the new legislation kicks in on 5^th
May”

Another similar story but this call came yesterday

• A landlord has several tenancy agreements which
  state the amount of deposit that should have been paid.  Both the landlord and the tenant have signed
  these AST’s BUT the deposit has never been paid.

Landlords question “Am I in the clear because I haven’t got
the deposits?”

My reply “ NO! If the AST states that a deposit has been
paid and you have signed the AST and given a copy to your tenants they may say
that they have paid in cash.

Landlord “But they haven’t  paid me anything and they are  good tenants so I haven’t bothered to chase
them”

My Reply “What would you do to defend yourself if one of
your tenants took legal action to recover the deposit (as stated on the AST) plus
up to 3 times the amounts?”

Landlord “So what shall I do now?”

My reply “You have no option but to protect the amount
stated in the AST and give your tenants copies of the protection certificate
and prescribed information”

Landlord “But that will look like they have paid and they haven’t”

My reply “Yes it will but the alternative is to take a
chance that the tenants won’t realise that they could get a lot of money from
you because the AST states that they HAVE paid. 
You might try getting the tenants to sign a separate document to say
that they still owe you the money but that you have protected it in good faith.
If they refuse to sign you will be forced to deal with the deposit at the end
of the tenancy as though it had been paid.”

Stunned silence.

• The tenant paid the deposit but the landlord
  agreed that he would use it to cover the last months rent. The tenant is now
  asking for the deposit back because he has found out that the landlord should
  have protected it and hasn’t.

Landlord “Is he right, can he get
4 times the deposit from me if I don’t give him his deposit back?”

My reply “Yes he is right
although you can still protect the deposit up to today and give him the
protection certificate and prescribed information”

Landlord “Or I could just him his
deposit back, it might be less hassle”

My reply “Yes you could do that
but there is nothing to prevent him taking the deposit back and still taking
legal action because you did not protect it. 
If he has been dishonest about using it to cover the rent and still
wanting it back do you trust him? If you do protect it and you can prove that
he used it to pay the last months rent you will not have to pay it back.”

Landlord “He sent me an email
asking me to use the deposit and I sent him one back to say I would”

My reply “Brilliant you have the
prove that you need if he should go for arbitration”

Tenants are being educated by www and where there is so much money up for grabs even a "nice" tenant might be tempted.

I was waiting for this, its the first but it will not be last, case where the landlord has missed the deadline to the tenant the paperwork to prove the deposit has been protected because the 30 days grace is over. At this moment these are the only options I can see

TELL THE ELECTRICITY SUPPLIER THAT THE TENANT HAS WIRED INTO THE MAINS SOCKET AND ASK THEM TO CALL TO MAKE SAFE.  If she does not let them in they and they are concerned for the safety of her and the children they may cut off the supply but that will be her fault not yours. DO THIS WITHOUT DELAY.

Tell Social Services that you are concerned about the safety of the children and explain what she has done with the electricity.  Tell her Solicitor, in writing, that you have done so and ask if he wants to be resposible for the well being of those children.

1. The landlord should give the tenant the certificate and prescibed NOW and get a witness statement as evidence and take the chance that the Judge will be kind and not impose the maximum penalty of the full deposit plus 3 times the same amount. Asks the court to reduce the final figure by the amount of rent that is still outstanding and grant possession. They probably will not grant possession if a Section 21 has been used and there is no evidence that the prescribed information was given but its worth a try at this point.

2. Do not wait for the above serve a Section 8 on grounds 8, 10 and 11 after the date that the above has been done and ask for the outstanding rent. If the above fails ask the court to enforce this notice 2 weeks after service on the tenant. It will take a while to get into court but will succeed if the landlord has proof of minimum 8 weeks rent arrears.

3. The landlord should send evidence to the Solicitor and the court  that the documents were given to the tenant – I have assumed above that there is no evidence at the moment?

4. Go to the local authority with evidence of outstanding rent and ask for direct payment of LHA – tenants often move out when they stop getting the rent to spend and the local authority MUST pay the landlord if there is proof of 8 weeks contractual rent arrears. 

DO NOT ISSUE ANOTHER AST or give in to any other threats made by the Solicitor. It may take time but if the landlord abides by the law and goes through the legal procedure above possession will be granted and meanwhile the local authority will be paying the rent.

Good luck please post to tell us how things go and thank you for posting this story as a warning to other landlords. I hope that this tenants details have been given to LRS so that a warning can go out to prevent landlords from taking her when she is evicted? The local authority will have an obligation to find them a home but they will get direct payment of rent. – Unless the local authority is one of those who have joined LRS!!!

Good point Richard particularly if the Police have been involved.  What a kind offer of help I do hope that Dougs friend will take you up on that it sounds like she needs all the support that she can get.

Another landlord might have been caught out here http://www.landlordreferencing…..g-agent-1/