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Can i keep tenants deposit to recoup rent arrears


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Hello there,

Thank you for taking the time to read this. I am in need for some expert advice please.

I have one property which I let out to a group of 3 friends (all young professionals) through my usual lettings agent. All 3 tenants name were on the tenancy agreement. The payment agreement was that the monthly full rent would come from a single tenant. So Tenant 1 and 2 would transfer their share of the rent to tenant 3, who would then transfer the money to my account each month.

One month Tenant 3 failed to transfer the monthly rent to me. When I enquired as to why the rent did not reach me, Tenant 1 and 2 said they had transferred their share to Tenant 3, who for reasons unknown to everyone until now did not pay me.

From then on Tenant 1 collected everyone's rent and paid me on time each month. However, one month before the tenancy was due to end, Tenant 3 did not give his share of monthly rent to tenant one, therefore I only got part rent for that month.

Throughout all this Tenant 1 gave me many assurances that he would pay me back all the money he owed me, which was £2,600. He has payed me back £300 so far.

The tenancy has now ended and my question is whether legally I can keep the entire deposit of £1950 to cover rent arrears (this does not cover the full rent arrears or end of tenancy cleaning and damage costs)? The deposit is held in the DPS custodial scheme. The lead tenant has made a claim for his and tenant 2 share of the deposit back (1200), as it was tenant 3 who did not pay the rent and not them (as they see it) They are all friends and they have more chance of getting that rent money back from tenant 3 than I do.

I have replied via DPS website to keep the full deposit giving an explanation.

As all 3 names was on the tenancy agreement am I correct in thinking all 3 are legally responsible for making sure I get the monthly rent? Even if one fails to pay his share? The others must cover his share?

Your advice will be much appreciated

Thanking you all in advance.

Savvy100 ( not so in this case)

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Yes you are correct.

It's of no concern to you which tenant pays another......that's getting to close/ to involved. All you're interested in is receiving the full rent each month and they are all responsible for any shortfall.

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No, unfortunately I don't. But looking through numerous posts, rent guarantee insurance and a home owning gurantor are a must. I will now bear this in mind going forward.

I have never done this before. Would you kindly point me to some literature or links that would allow me read up on how to do this (step by step) properly. Thanks.

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I think you may be expecting a little to much from a forum.

Many landlords use a lettings agent who can usually provide experience, knowledge, expertise and arrange rent guarantee insurance and/ or a home owning guarantor along with all the necessary legal and documentation requirements.

If you choose not to use an agent then the options are for you to buy one of the many good books available on the high street or internet. Alternatively type in rent guarantee insurance etc into your browser and there are plenty of household names offering what you need.

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