Landlordreferencing.co.uk – Forum

AVeryAngryLL said:

Basically, a rogue tenant contacted them to say she’d left one of my properties and wanted her deposit back.  In reality, she was still living in the property and had not paid a months rent recently due.  There was also damage in the property, and Oldham Council tenancy relations team & housing directorate were involved with both me and her, as go-between as relations had broken down.

 

This is a short summary:

 

My first knowledge of this claim was an email from MyDeposits demanding I immediately pay them the full deposit insured for this tenant, and giving me three different ways I could pay them.  Obviously I replied to say the tenant was still living in the property and was not entitled to any deposit return at this stage. Also she was in rent arrears and a county court summons about to be issued for these arrears.

 

Imagine my surprise that MyDeposits cared nothing for this information, and simply demanded the full deposit be sent to them or they threatened they could cancel all the other deposits insured with them and terminate my scheme membership !

 

I obtained email from Oldham Council confirming they had spoken to the tenant that same day, and she was still living at the property.  I forwarded this to MyDeposits, who refused to accept it and refused to telephone Oldham Council to verify authenticity, apparently accusing me of forging the email…

 

I wrote to the CEO, Eddie Hooker, but received no response (he simply handed it back to the people I was complaining about !)

 

A few weeks later the tenant did move out of the property, and I went there with tenancy relations team member.  Apart from 1 months rent arrears, there was considerable damage and theft of items from the property.  I reported it to greater Manchester police, who accepted the charge of theft (but just told the tenant to return what she’d stolen, or pay for it)

 

I updated MyDeposits with this latest information, and told them I’d be happy to put this situation in front of any judge in a Manchester court if they still continued to demand return of deposit.

 

About a week later I got an email from them saying they’d been unable to contact the tenant, and only for that reason would drop the case (non-case as there was never a legal event that would allow a case to be raised).   So one word of a lie from the rogue tenant, despite all the evidence I had presented, would presumably have seen them continuing to demand deposit from me….

Very few landlords realise that their ‘insured’ deposit will immediately be demanded in full in the event of any dispute, spurious or otherwise.  They think, quite reasonably, that they must only hand-over the deposit if they lose adr arbitration or legal action…

 

A number of aspects concern me about MyDeposits.  Why were they so happy to accept the lies of a rogue tenant without the slightest proof of her story ?  Yet a landlord of several years dealing with them, who had never before had a deposit dispute and who had provided clear evidence from Oldham Council that her claim was untrue, was entirely disbelieved.

 

How did this company get licensed to operate this scheme ?  Why are there not multiple insurance providers to choose from ?

 

A landlord pays £30 and a tenant pays nothing for this insurance.  So who pays for the ADR dispute resolution ? Why were MyDeposits so apparently ‘desperate’ to proceed with a case ?  Do they get a payout each time a dispute goes ahead ?

 

Other questions remain, and my impression of your case study email makes me realise others think this whole tenancy deposit issue stinks.

 

My intention is to write with complaint to the Insurance Ombudsman with details of this story, and also write to the Department of Communities and Local Government who granted the MyDeposits license for this scheme.

 

Right now, my intention is to no longer take deposits (in last five years have had no problems across multiple properties.  If anything, deposit simply encourages some tenants not to pay their final months rent).   Instead I will usually require a home-owning working Guarantor, as much better substitute for using a deposit.

I think you are correct over this deposit thing.

I am with mydeposits and I must admit your experience doesn't bode well for other LL you use this scheme.

The only reason I use them is I can hold the deposit monies.

But I appreciate not a lot of use if they start threatening you with membership cancellation etc.

As you suggest a possible solution would be a home-owning guarantor.

Unfortunately that won't mean much if the property is in negative equity, and you still face a cashflow issue.

So perhaps no deposit to be taken providing the the tenant or a guarantor qualifies for RGI and the tenant is to pay for a LL contents policy that includes theft and malicious damage at the property.

This is an idealised situation, as by the sounds of it your tenant would never have qualified for RGI and would have been highly unlikely to persuade anyone to be their guarantor who would have passed a RGI check!?

These deposit circumstances will possibly make sourcing a tenancy for LHA claiamants even more problematic.

A question, possibly, of yet again unintended consequences!?

 

I think there is another scheme that allows the LL to hold the deposits aswell as mydeposits.

Mary, I think you're missing his point.

The tenant was making a False claim !  There was no case.  There was no basis for adr, submitting deposit to the scheme, or anything.

He says he offered proof that the claim was false, by way of evidence from Oldham Council and then Greater Manchester Police !

Do you really think it acceptable MyDeposits apparantly continued to harass him, demanding money, and threatening to cause problems with is other tenants ? (by cancelling scheme membership, and presumably unprotecting their deposits)

There's some serious questions to be answered, and I hope he feedback response from Ombudsman and govt department in his complaint about MyDeposits.