W1zard43 Posted April 24, 2008 Report Share Posted April 24, 2008 I had an existing assured tenacy agreement which commensed in 2004 when a deposit was taken. A new agreement was drawn up in June 2007, however no deposit was taken. The contract is an AST of rental value less than 25,000 per year (slightly over if the deposit is included in the calculation) One tenant was new and the other one was part of the original group I have read that the relevant law does not specifically say that the landlord has to specifically protect the deposit in this case The issue has come to light because the tenants have used the deposit to pay the last months rent and left the property a mess. Their threat is if I take the case to court I will face a fine of 3 x deposit Would like views on this, thanks Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted April 24, 2008 Report Share Posted April 24, 2008 I had an existing assured tenacy agreement which commensed in 2004 when a deposit was taken. A new agreement was drawn up in June 2007, however no deposit was taken. The contract is an AST of rental value less than 25,000 per year (slightly over if the deposit is included in the calculation) One tenant was new and the other one was part of the original group I have read that the relevant law does not specifically say that the landlord has to specifically protect the deposit in this case The issue has come to light because the tenants have used the deposit to pay the last months rent and left the property a mess. Their threat is if I take the case to court I will face a fine of 3 x deposit Would like views on this, thanks Hi Wizard ?????????????? "however no deposit was taken" ????????????????????? No need to protect it if you havent taken it ..... BUT it sounds like youu have used the dep from the original AST ....and then created a new AST after new legislation (april 07) in which case you should have protected it ....... based on "the tenants have used the deposit to pay the last months rent " If this is the case i would be very nice to T as they can leave (at end of ast) or stay if they like ...as you have not protected dep ...S21 will not be enforceable to regain possession ....... and for "some time (including now and after T has left prop) T can sue you for 3x dep PLUS dep back ......(you have lost b4 you start ..this is as clear as mud) Exactly what can you take them to court for ? Please clarify wether or not you hold a deposit ? as the above is unclear.... The Rodent Link to comment Share on other sites More sharing options...
J4L Posted April 24, 2008 Report Share Posted April 24, 2008 Sounds to me like you have taken this Tenancy Agreement over. Your (or literally THEIR) argument is that THEY placed a deposit on the property when they moved in. You should be taking a deposit on the property when a new AST is agreed and then protecting it. My thoughts on this are 1) If the deposit was taken by a previous LL then it was your responsibility to get it transferred over to you, if it wasn't then effectively you HAVEN'T taken a deposit and can therefore not be held responsible for protecting it. (not a legal view but only my opinion.) 2) If the deposit WAS transferred/given to you and you didn't protect it then heed Simon's advice and tread carefully. Gareth Link to comment Share on other sites More sharing options...
Trenners Posted April 25, 2008 Report Share Posted April 25, 2008 Hi Wizard, You took a deposit in June 2007 against a new tenancy agreement. You should have protected it - and you didn't - so you have broken Civil law. Probably not the best time to get stroppy with your tenants because they have the moral high ground! Mark Link to comment Share on other sites More sharing options...
GPEL Posted April 25, 2008 Report Share Posted April 25, 2008 If you drew up another contract to the same tenants after the protection scheme started and a deposit was held from the previous agreement then the tenancy should have been registered. Strictly speaking the deposit is supposed to be refunded at the termination of one contract and taken again at the start of the other but this isn't practical when all you're doing is issuing new paperwork. Where is the original deposit held? Can you draw down on that or claim it back from someone else? If you haven't registered when you are supposed to have they could counter claim for the 3 times penalty, plus a recent ruling didn't allow the landlord to claim rent arrears or for damages because the deposit schemes arbitrate on these matters and if you're not registered you can't put it to the scheme to resolve. However, I think this ruling is challengable with a bit of work because the deposit schemes don't rule out the use of courts as an alternative to dispute resolution. To really rub it in, any served Section 21 would also be invalid. Sadly, I think you've scored an own goal. Moral high ground be damned, they've used the system against you to avoid paying. However, can you honestly say that you met your part of the bargain, fulfilled your obligations promptly and so on because this sort of thing comes to light when there's disagreement. You've been receiving close on a high rent and at that level people are often quite demanding about their tenancy. Link to comment Share on other sites More sharing options...
W1zard43 Posted April 25, 2008 Author Report Share Posted April 25, 2008 If you drew up another contract to the same tenants after the protection scheme started and a deposit was held from the previous agreement then the tenancy should have been registered. Strictly speaking the deposit is supposed to be refunded at the termination of one contract and taken again at the start of the other but this isn't practical when all you're doing is issuing new paperwork. Where is the original deposit held? Can you draw down on that or claim it back from someone else? If you haven't registered when you are supposed to have they could counter claim for the 3 times penalty, plus a recent ruling didn't allow the landlord to claim rent arrears or for damages because the deposit schemes arbitrate on these matters and if you're not registered you can't put it to the scheme to resolve. However, I think this ruling is challengable with a bit of work because the deposit schemes don't rule out the use of courts as an alternative to dispute resolution. To really rub it in, any served Section 21 would also be invalid. Sadly, I think you've scored an own goal. Moral high ground be damned, they've used the system against you to avoid paying. However, can you honestly say that you met your part of the bargain, fulfilled your obligations promptly and so on because this sort of thing comes to light when there's disagreement. You've been receiving close on a high rent and at that level people are often quite demanding about their tenancy. ----------------------------- It would appear that the deposit held from the previous tennancy should have been registered - agreed So yesterday I registered it, one day before the contract ends The tenants are professionals they have already moved out and I have move in to the property so perhaps the section 21 is not applicable Question 1) Do you think it is possible for the courts to fine me, yes the deposit was registered late, but it now is registered My view is 1) Go through the deposit scheme - however since they have used all the deposit for missed rent it will not go anywhere 2) Apply to County Court for delapidations 3) My only concern about this would be the "risk" of the 3 x deposit fine Further more I agree that all kinds of issues come out via the county court case but apart from the "deposit" issue the issue is clear . Detailed signed inventory at start with photos. Detailed inventory at end with photos Detailed email correspondance throughout Intested to get thoughts on the courts view as I guess this is new ground on the fine rule Link to comment Share on other sites More sharing options...
GPEL Posted April 25, 2008 Report Share Posted April 25, 2008 As the deposit wasn't registered within the prescribed 14 days and information not provided to the tenants I think if they made a claim against you it would be upheld. Offset any deposit against outstanding rent and apportion the remainder, if any, against damages. If you made a claim it would be for the outstanding losses. However, did you try and register the deposit before or after the tenants left as this may influence the outcome. It's likely that a judge may rule that as the deposit wasn't registered when it was supposed to be then you have invalidated your own claim as it is not now possible to use the scheme to arbitrate. Plus, even if courts upheld it in your favour you are not guaranteed to get your money. How much do you think you are owed? Link to comment Share on other sites More sharing options...
W1zard43 Posted April 25, 2008 Author Report Share Posted April 25, 2008 As the deposit wasn't registered within the prescribed 14 days and information not provided to the tenants I think if they made a claim against you it would be upheld. Offset any deposit against outstanding rent and apportion the remainder, if any, against damages. If you made a claim it would be for the outstanding losses. However, did you try and register the deposit before or after the tenants left as this may influence the outcome. It's likely that a judge may rule that as the depsoit was reigestered when it was supposed to be then you have invalidated your own claim as it is not possible to use the scheme to arbitrate. Plus even if courts upheld it you are not guaranteed to get your money. How much do you think you are owed? I would expect 1,000 - 1,500 ...stolen sofa, re decoration etc Its the principal that the fact that the deposit was not registered / registered last is causing an issue if the whole thing goes to court. The court process concerns me ie if I get fined 3 x deposit I think if I could get some comfort that this would not occur then I would pursue it, because the other grounds are rock solid Its not a great deal but for the tenants to use the 3 x deposit fine as a stick to put me off is enough to push it to court, but only if the judge will use power to fine me..... Link to comment Share on other sites More sharing options...
GPEL Posted April 25, 2008 Report Share Posted April 25, 2008 To be frank I would cut your losses and treat it as an expensive lesson. Try reporting the stolen sofa for insurance purposes but the Police won't be interested and you are entering largely unknown territory with claims and counter claims associated with a tenancy not registered correctly. I think you risk losing more in the long run. Link to comment Share on other sites More sharing options...
W1zard43 Posted April 25, 2008 Author Report Share Posted April 25, 2008 To be frank I would cut your losses and treat it as an expensive lesson. Try reporting the stolen sofa for insurance purposes but the Police won't be interested and you are entering largely unknown territory with claims and counter claims associated with a tenancy not registered correctly. I think you risk losing more in the long run. It certainly looks like that, guess I need to put the correspondance through the registed deposit, or wait until the 90 days passes Will put it all in writing to the tenants to keep my options open Going to give their new landlord a heads up, since they got the propety through a friend's estate agency business Sometimes think this renting game is a big pain in the *** Should stick to developing properties and less time dealing with smart tenants....always another way tenants can get one over on you ! thanks for advise, will give docs to my solicitor to get their view also just in case their is some precidents from previous cases Link to comment Share on other sites More sharing options...
GPEL Posted April 25, 2008 Report Share Posted April 25, 2008 Good luck with your solicitor but given the immaturity of the deposit scheme the solicitor will have little case law to draw on. Link to comment Share on other sites More sharing options...
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