Tenancy Deposit not protected

[slc79]

I've been searching the forum trying to work out if my case is a straight-forward non-compliance issue. I'm going round in circles, wondering if I've given the Agent a chance to protect the deposit and say that as far as he's concerned he's done what he should have. But then what's the point of the legislation, if they only protect it when forced to do so?

 

My AST tenancy started 24 November 2008, £750 deposit plus advance rent paid, etc. However, no confirmation of whether deposit has been protected has ever been received. I'm still an existing tenant, next rent due to go out next week.

 

I'm thinking about moving, if not at end of six month lease, then before the autumn as this house is so cold and uncomfortable to live in. So, then I suddenly think about where is the deposit and how am I going to get it back at the end. It's not through a letting agent, but a management company acting for the LL. During the last two weeks, I've been trying to get confirmation of where it's being held, which evasive answers, and the last phone call I made the receptionist said that mydeposits.co.uk is where they place deposits. However I rang them and my tenancy is not registered with that scheme, so I'm being lied to. So, I've sent emails over the weekend to all three schemes, and they've all replied saying, no, you're not registered with us, which gives me proof which I can print off. I've also send letter by recorded delivery to Management Company, saying that:

 

1. I believed you have not met the initial requirements of an authorised tenancy deposit protection scheme; and

2. I have not been able to obtain formation from a scheme administrator that my deposit is being held in accordance with such a scheme; and

3. I have not received the prescribed information which you are required by law to send me within 14 days of receiving my deposit.

In the circumstances, I am entitled to have my deposit refunded. Alternatively kindly provide a certificate of proof that my deposit was protected within 14 days of receipt and forward this together with the prescribed information.

...If I do not hear from you withing 7 days, with satisfactory evidence that you have complied with the obligations which the law imposes on you, I may begin legal proceedings to recover my deposit without further recourse to you. ....

 

So, what can I expect? I would be surprised if they can send me proof it's been protected as I've already checked.

 

What if they retrospectively put it in a scheme as my tenancy is still on-going? Should I still proceed with pursuing it through the courts due to non-compliance of initial requirements?

 

Any advice glady appreciated.

 

If they're being so evasive about the deposit in the middle of my tenancy, when everything is hunky-dory, what about when it comes to me trying to get the deposit back at the end as I'll obviously need it for my next rental? I have an entry inventory and took loads of photos when I moved in. I don't feel I can trust them.

Edited March 16, 2009 by slc79
to add why I'm so worried

[flyingdoc]

I would be very adamant about getting the details of the deposit which, according to one of the deposit protection schemes websites, they should have given you within 14 days of you paying them the deposit.

[Steve__M]

I would write as you have done to the company and the landlord.

 

Probably I'd give them 14 days, and I'd say "will" take legal action, not "may". I'd also add that "If I win, the court must order you to pay me a further 3 times penalty, or £2250".

 

If they subsequently protect the deposit, then there are cases that suggest you can't take further action.

 

If you take legal action and *then* they protect the deposit, I'm not quite sure what you do. I'd hope one would continue the case to get court costs back.

[slc79]

I don't have landlord's name and address. Only the management company is on the lease. Should I have LL details if I decide do anything about it?

 

I thought the requirement was to protect the deposit within 14 days. Black and white. No question about the obligations.

 

The onus shouldn't be for the tenant to find out at the end of the tenancy that it should have been protected but wasn't. What if the LL makes up their own rules about whether they'll let the tenant have it back at all. In this credit-crunch time, what if their business goes bankrupt and there's no-one for the tenant to pursue for the return of the deposit.

 

I've never had deposits withheld in any of my many tenancies, as I am very careful and considerate to LL's property and been a good payer. But I've always gone through letting agents before so previously was pretty confident of getting it back (usually within day or so of vacating). Now there's this new scheme. Only this time, my deposit and lease was arranged through a LA on an introductory basis only and they sent on the money to the Management Company. As it's been so hard getting basic information out of them when all I wanted to know was "is my deposit protected," what chance is there when I vacate they'll arrange a speedy return of my money. Sorry, it's all speculation. But there's plenty of unscrupulous LL's out there too and we're they're cash cows. Of course there's also plenty of horror stories about terrible tenants. There's always two sides.

[slc79]

Help!

 

The TDS initial requirements are not worth the paper they're written on, in my opinion. Or am I missing something?

 

It seems to me that the tenant has no protection whatsoever. Landlords don't need to bother protecting the deposit unless the tenant kicks up a fuss, issues court proceedings and the day before the court hearing, the landlord then protects it. Reading various posits on this site and other websites, has led me to this conclusion.

 

The Landlord Law Blog: tenancy deposits

 

My feeling is that if the landlord can get off the hook by complying with the requirements on the day before the court hearing, this is grossly unfair. It will in effect be encouraging landlords only to protect deposits where tenants bring court actions, and will mean that it will be virtually impossible for a tenant ever to succeed in such a claim.

 

Having recently discovered that my deposit has not been protected, I am very disillusioned. My letter asking for proof of deposit protection has not been replied to. I will pay my fifth month's rent on the 24th March. As I do not expect to receive confirmation that my deposit has been safeguarded, I intend to tell them to use it as my sixth and final month's rent payment, and I'll move out at the end of the six months. The management company is allegedly having money problems. I don't like the idea of using my deposit this way, but don't trust them to return it as they should after I vacate. Wouldn't it be ironic if they sued me for using it as a rent payment? Although they are the ones that should be sued for TDS non-compliance.

 

Also, should I demand the landlord's name and address?

 

What would the reader do?

[slc79]

What if I stop paying rent until I get the information I've asked about my deposit? I've got two months to go on my tenancy.

 

I don't really want the hassle of suing LA, LL and Management Company, for deposit return plus 3x deposit penalty. However, as they are experts in letting, surely they should all be aware of their responsibility for complying with the Housing legislation. So, if they fail in their duty to protect a deposit within the time limits laid down, what are the rights of a tenant?

 

I don't get is why do certain forum members say that a tenant is unlikely to succeed and all the LL has to do is to swiftly comply if he's threatened with court action.

 

Just found an interesting article, which describes my situation: "let-only agent received a deposit from the tenant and passed it on to the landlord who failed to register the deposit"

 

Letting agents hit by TDS? | Nearly Legal

 

Letting agents hit by TDS?

 

Published by Francis Davey

on 19 March 2009

in Housing law

. Tags: agent, housing act 2004, letting agent, tenancy deposit, Tenancy Deposit Scheme.

 

A recent blog post on the PainSmith blog illustrates a potentially nasty trap for letting agents (and useful alternative target for tenants) in the tenancy deposit protection system of the Housing Act 2004.

According to PainSmith a let-only agent received a deposit from the tenant and passed it on to the landlord who failed to register the deposit within the 14 day deadline.

The tenant has now brought proceedings for 3 times the deposit against the agent as well as the landlord, arguing that s.212(9)(a) of the Housing Act 2004 defines “landlord” to include persons acting on a landlord’s behalf and therefore the penalties in s.214 of the act apply to the letting agent as well as to the landlord.

I have always thought this argument must be right. Indeed it goes a little further than that.

S.213(1) requires that when a deposit is paid to “a person”, it must, from the time that it is received be dealt with in accordance with an authorised scheme. The “person” could be anyone (as in “leave it with the lady next door dearie”) and the date of receipt starts the 14 days ticking.

2.212(9)(a) is quite clear. It states:

references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies

This would appear to mean that the duty to give information to the tenant (and any “relevant person” such as a relative paying the deposit on behalf of the tenant) under s.213(5) also falls on the letting agent. As well as implying (as the tenant in the case reported by PainSmith contends) that a letting agent can be ordered to pay three times the deposit as a penalty under s.214(4).

That view is buttressed by the fact that s.214(3) permits the court to order the “person who appears to the court to be holding the deposit” to repay it to the tenant - that person need not be the respondent to the application nor a landlord or letting agent. The scheme is clearly intended to permit the courts to do actual rather than merely formal justice.

Finally if I am right then the likelihood is that letting agents will insist that they take charge of ensuring that any deposits paid to them are held in accordance with one of the approved schemes. That can only be a good thing. It is hard to see why a landlord would have a legitimate reason for wanting to prevent an agent from doing so.

Thus, the long run effect might be to put letting agents in a stronger position when dealing with landlords, to the benefit of tenants and letting agents both. Of course in the short run this is not good news for any letting agents who have left responsibility for the deposit with the landlord and legal uncertainty is a bad thing.

For tenants, the lesson is that if you paid your deposit to a letting agent you may have another target for complaint if the deposit is not properly protected.

[Mr Pipps]

Hi SLC

 

Good job on taking the photos and making the enquiries about your deposit. However, I wouldn't recommend sending any more letters. It's simply not necessary. Remember, velvet glove, iron fist. It's always better, that way.

 

Anyway, how much is your rent per month? Is your deposit the same value as the rent, or is it 1.5 times the value of the rent? What do you stand to loose if you simply don't pay the final month's rent?

 

Have you remitted the fifth month's rent yet?

[slc79]

Hi, rent is £750 pcm. I pay rent by bill pmt on 24th of each month, not direct debit, and no, I haven't sent it yet.

If I don't pay rent next month, we're quits, they can have the deposit as rent.

There shouldn't be any debate about deductions, the house and garden is in better condition now than when I took it. I've also added nice touches, like making a wooden plaque to go on the fence with the house name. Any monkey business though, and I won't leave my little extras.

[Mr Pipps]

It would appear that the most straightforward way of achieving a fair resolution would be to pay no more rent.

 

And at this time, it might then be advisable to write a letter to the landlord or agent advising that as you have receiving no information regarding the protection of your deposit, as they are required to provide by law, you will therefore be paying the next month's rent into a separate holding account, where it will remain set aside until further notice. Do the same with the final month's rent, too.

 

This is of course just a procedural point, which would allow you to subsequently demonstrate before a court, if the landlord was to take action for non-payment, that you were not deliberately defaulting. It's always best to cover your back.

 

In reality and under these circumstances, however, it would appear unlikely that a negligent landlord would go to the lengths of belatedly meeting his legal obligations under the tenancy deposit scheme, or seeking the payment of the final two month's rent.

 

And of course, regardless of what the landlord may try to do before now and your final day, they cannot legally make you leave the property between. Remember, don't answer the door to any strangers, should any visit. And at the sign of any suspicious behaviour, call the police and insist on being issued with a crime reference number. The likelihood, however, is that they will simply see you as someone who knows their rights and is too much like hard work.

 

It is rather lucky that your agent was so inexperienced as to make the deposit only equal to one month's rent. That'll teach 'em. Well, no, it probably won't.

 

I hope you will agree, that this would be a much easier route to simply getting out without losing any money.

Edited March 23, 2009 by Mr Pipps

[slc79]

Thanks for suggestion Mr Pipps. However, I don't want people snooping around and knocking on my door over the next month (I've got a disabled son who'll naively open the door to anyone). So I'll let this month's rent go through (which I am due to pay anyway).

 

On balance I think I'll just withhold the last months rent, or as you say, pay it into a separate account. Then they've got six months of rent if you include the deposit. I'll then take up your suggestion, "write a letter to the landlord or agent advising that as I have received no information regarding the protection of my deposit, which they are required to provide by law, I will be paying the next month's rent into a separate holding account, where it will remain set aside until further notice."

 

I could also mention that, as I'm sure they're aware, they've breached the rules, and I could have sued them for 3x the rent amount as a penalty for not-complying with the deposit protection scheme, plus they would have been unable to give section 21 notice to get me out. But wanting a quiet life, I hereby give you notice that I'll leave at the end of the six month lease. It's been a pleasure being your tenant (not) and perhaps you could bear in mind that the deposit belongs to the tenant, and as such, you are obliged to protect it.

 

I still think it sucks that the LL can get away with not protecting the deposit unless the tenant is prepared to take them to court. What's the point of the 14 day rule if the courts aren't going to enforce it? Or are there any cases of success either during or after a tenancy?

 

[slc79]

Should I, or should I not take further action and complete the Court Forms?

Must the court follow the spirit of the law?

1 - LL returns or protects deposit, and

2 - LL ordered to pay 3 x deposit amount to applicant

 

http://www.consumeractiongroup.co.uk/forum/residential-commercial-lettings/117280-tenancy-deposit-scheme-3.html#post1679953

 

Housing Act 2004, Part 6, Chapter 4.

 

Housing Act 2004 (c. 34)

Part 6 — Other provisions about housing

Chapter 4 — Tenancy deposit schemes

214 Proceedings relating to tenancy deposits

(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds—

(a) that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) has not, been complied with in relation to the deposit; or

(b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme.

(2) Subsections (3) and (4) apply if on such an application the court—

(a) is satisfied that those requirements have not, or section 213(6)(a) has not, been complied with in relation to the deposit, or

(b) is not satisfied that the deposit is being held in accordance with an authorised scheme,

as the case may be.

(3) The court must, as it thinks fit, either—

(a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or

(b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme,

within the period of 14 days beginning with the date of the making of the order.

(4) The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order

[slc79]

As far as I know, the management company//LL are holding the deposit in their own account.

 

However they said they use mydeposits.co.uk as their protection scheme, but I've rang and emailed both that scheme and the other schemes and my deposit/ name/ address hasn't been registered with anyone.

[Mr Pipps]

I think that in the case of a landlord directly lying about the protection of a deposit might well put a very different judicial perspective on any potential subsequent 'retrospective compliance'.

 

If I were you, I would withhold both the penultimate and final months' rent, and sue immediately for non-compliance, without any further precursory correspondence to dilute the affect of your action.

 

My personal view is that I think, based on the landlord's declaration concerning the tenancy deposit protection being a false one, that providing you keep the final rents in a separate account and set to one side in the possible event of a court directing you to make the payment, that at the same time you would have a very good chance of securing the three-multiple-penalty, providing you play your cards right with the litigation.

 

If it is of any encouragement, I can say that I had a landlord only last year who went bankrupt. I remained in the apartment for four months, rent free. After my initial letters and threats of litigation, no one ever dared visit me on behalf of the landlord.

 

It will be interesting to see which route you decide to take.

[slc79]

As I did not know the LL details, I did a Land Registry title search, only cost £3 and instant result! The property is not owned by an individual, which we were led to believe, but the property development company that were doing the re-furbishment (it's an old cottage). The Company has several different businesses in investment and property. However, although the names are different, the company reference no. is the same on the Title search and the company I pay my rent to. So, at least I know who the LL is.

 

As the deposit regulations have been in force since April 2007, and in view of their business, they have no excuse not to have provided me with the required information about the deposit, do they?

 

However, all I really want is the guarantee of my deposit being returned. So, I think I should only "set aside" the last month's rent. I can then hopefully find another suitable rental before that is due, get a good tenancy reference, as I won't have done anything negative about my tenancy. I will then serve them notice that I'll be leaving and, by the way, will advise them that I have set aside the final month's rent payment as they have failed to comply with deposit regulations.

 

I think I'd prefer the less hassle approach, even though they're in the wrong.

 

Any thoughts?

[Planner]

I dont think you should 'set aside' (it would be withold rather than set aside by the way) any rent, but continue to pay as normal. Two wrongs dont make a right. If your deposit isnt returned to you then you always have a legal option at the end of the tenancy.

 

With the approach you are proposing to take, your deposit could be protected with a click of a mouse, and then you will be left with egg on your face and a possible court summons for rent arrears + costs + no reference should you require one for the next property.

 

In my opinnion, rent should only be witheld under the commonly recognised procedure for disrepair, not anything that takes a tenants fancy and in certain other limited circumstances.

 

Just be careful with this approach . Good luck.

Edited March 24, 2009 by Planner

[Mr Pipps]

Good work on your further research. At least you have a little better idea of where you stand now.

 

But do you seriously think that such a landlord would ever provide a reference? And why would you ever need a real reference? I always get a family member or friend to fake it. It's the best way.

 

With regards to setting aside rent, if you have not received statutory information that your deposit is protected, then you have a legal right to withhold rental payments under the contract. How else could you be expected to protect your position? The whole point of setting the rent aside temporarily, is that if the landlord does come good then you have not lost out, and if he continues to break the law, then you have not suffered losses.

[slc79]

Fair enough comment, Planner.

 

One problem though - "If your deposit isnt returned to you then you always have a legal option at the end of the tenancy."

 

I already know the deposit's not protected in a scheme, and what if they refuse to pay it back or go bankrupt, what am I supposed to do then? I've also read examples of the LL putting it in a scheme after the tenancy has ended, and getting away with it. And then making deductions for spurious items not caused by me. eg. settlement cracks on the walls due to their "refurbishment".

 

Or I could deluge them with letters during the next month, demand proof of protection and details of how to get it back at the end of my tenancy.

[Planner]

Fair enough.

 

One problem though - "If your deposit isnt returned to you then you always have a legal option at the end of the tenancy."

 

I already know the deposit's not protected in a scheme, and what if they refuse to pay it back or go bankrupt, what am I supposed to do then? I've also read examples of the LL putting it in a scheme after the tenancy has ended, and getting away with it. And then making deductions for spurious items not caused by me. eg. settlement cracks on the walls due to their "refurbishment".

 

Or I could deluge them with letters during the next month, demand proof of protection and details of how to get it back at the end of my tenancy.

 

You dont have to wait until the end of the tenancy, you can take legal action now if your 100% certain it isnt in a scheme. At the end of the tenancy if they refuse to pay it back then you can again take action for either non-complaince or just simply the deposit.

 

In terms of bankruptcy... do you suspect the landlord is in serous finanical difficulty? if not then they are unlikley to declare bankruptcy over a tenancy deposit alone.

 

Yes, the landlord could put the deposit in a scheme. You would then have the certainty of getting it back at least.

 

Contary to what Mr Pipps has posted above, you dont have a legal right to withold rent. Morally, I would agree you do, but legally, no. I just wanted you to be aware that witholding rent is quite a serious step and certainly isnt consequence free should the deposit be subsequently proptected. That list of deductions could quickly grow to swallow your whole deposit, and a judge isnt necessarily going to see an awkward landlord, they may see a protected deposit and a tenant witholding rent......

[slc79]

Only heresay, a friend of a friend said the LL's co made a substantial loss on their last accounts. Their various companies have LLP after name - Limited Liability Partnerships. Is this something to be worried about?

Edited March 25, 2009 by slc79

[Mr Pipps]

Contary to what Mr Pipps has posted above, you dont have a legal right to withold rent...

Would you like to provide a legal authority for your mis-spelt attempt at a legal assertion?

[Planner]

Would you like to provide a legal authority for your mis-spelt attempt at a legal assertion?

 

Oh dear, I generally thought your posts where always quite well thought out and insightful. I never had you down as one of the boards spelling and grammar trolls!

Naurally I will await your examples to support your legal assertion before responding.

[jb9]

SLC, have PM'd you

[MARTIN3030]

Can we please progress the issues without the personals-its not helping at all.

[slc79]

Out of the blue, have got deposit back!

 

I was gearing up for a fight, preparing wording for n208, etc, to let LL know I meant business.

 

Then, a letter and cheque arrived on doormat. Acknowledged paperwork was not registered correctly and therefore here's the deposit.

 

After several weeks of worry and sleepless nights, it's over.

 

Unfortunately, too many people out there have cases not resolved so easily. Will keep in touch with the forum, and help out where I can. Information is power! Thanks for all the advice, Mr Pipps, and Planner.

 

Without sending the LBA letting the LL know that that they had failed in complying with TDS, I wouldn't have had this outcome. Thank you all.

Edited March 26, 2009 by slc79

[Mr Pipps]

Congratulations!