Worried Landlord - Tenants not paying rent and claiming x3 deposit

[Britannia1]

I rent a Bungalow to Lithuanian Family in Southampton. They have rented since June 2009, paying on time with the last rent of £850 received in December 2009. AST until June 2010.

 

I was informed Police had placed the Wife and 2 children placed in sheltered housing for their protection in January 2010. Shocked at this I met the Husband, who was threatening towards me and demanded I return the deposit of £850, which I explained was protected and I would place the AST now with Property letting agents.

 

Agent visited the property and informed me the Wife and children have returned. Now tenants not paying rent and tried refuse to deal with agent. Tenant paid £20 into my bank account, I returned saying this was wrong, rent must be paid to Agents and is £850. 2 months in arrears, so Agent issued s.21 and s.8, charging me £100 as no 10% from rent as rent not paid.

 

Tenant said, guttering need cleaned, wanted copy buildings insurance, copy electrical certificate and basically trying to raise complaints on the property. But I have give all certificates again and the property is in good order. The tenant is just trying it on.

 

Now the tenants have sent me Southampton County Court claim CPR 8 to claim x 3 deposit and deposit being £3,400 and court cost is paid to him under s214.

 

I am shocked at this. I gave a stand alone tenancy deposit document issuing details of my deposits.co.uk scheme that I was using was using to protect the deposit of £850 on 12/05/09 and AST signed and provided. I then fell ill and it took a few weeks for me to feel better and immediately I was better I transferred the money from the bank to my deposits.co.uk, recording on 17 July 2009. Tenancy started 15 June 2009. I subsequently informed my deposits and paid another fee to get the form to show the correct date of receipt being 12 May as per signed paper tenancy deposit paperwork as I used a Law Pack tenancy deposit paperwork and AST.

 

My understanding is since the Draycott v Hannells lettings Ltd case because I gave paperwork and a letter dated 12 May 2009 the day I received the deposit then subsequently felt fit enough to place with my deposits. Co.uk I have met the rules of s214(3) being the deposit is protected, so how can a judgement be made to protect the deposit when it already is protected, thus s214(4) request for x 3 payment of rent as a penalty to the landlord is not applicable.

 

I hope this is the case as the tenants are coursing me severe stress and I am paying a £900 mortgage for them to live rent free, which is stealing then if they claimed £3,400 being x 3 deposit, plus costs, how can that be fair?

 

Could any legal adviser give their input on this please ASAP as I have to reply within 14 days of 19/02/10. Thank you very much.

[blitz]

As far as I can see everything you have assumed is correct, you should use Draycott v Hannells Lettings Ltd 2010 as a defence should it proceed to court. I would also continue on with the S.21 and S.8 for rent arrears.

 

It might be worth an out of court letter explaining the Draycott v Hannells defence and any claim will be vigorously defended in court

 

The fine is applicable if the initial conditions of the scheme are not met, I believe the appeal established that the time period was not listed as an initial condition, and the scheme has accepted the deposit on a later basis.

[MrShed]

The fine is applicable if the initial conditions of the scheme are not met, I believe the appeal established that the time period was not listed as an initial condition, and the scheme has accepted the deposit on a later basis.

 

 

In that specific case only.

 

What tenancy deposit scheme is the deposit protected under?

[blitz]

mydeposits

[MrShed]

In the Draycott defence, it was specifically noted that the term within the housing act referring to the initial conditions not being met was NOT breached, as the DPS (the TDS used in that case) did not explicitly outline that protecting the deposit within 14 days is an initial condition.

 

MyDeposits do specify this within their conditions.

 

As such, the Draycott defence does not apply here.

[Britannia1]

My understanding is that under the Housing Act 2004 s213(3) and s213(6) if the tenant takes action s214(3) comes into play and the County Court as thinks fit will either -

 

1. Order the person who appears to the Court to be holding the deposit to repay to applicant. (This being wrong as the AST is still in force and if damage to property, then no deposit to use to cover this)

 

2. Order the person who appears to the Court to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme.

 

Now if the deposit is protected, which ut is, then the Court can not order what is already been done, and then no order can be made under s214(3) to s214(4) does not apply, so no x 3 penalty.

 

Plus, because one Deposit Protection scheme allowed this under Draycott v Hannells Ltd - 2010 then this would indicate that an inforce protected deposit meets the primary objective and all deposits protected in a similar way are legal. Thus anyone Landlord that was fined / penalty x3 deposit having protected a deposit in a similar way would not be fair.

 

Could any legal adviser please give their input on this. Thank you.

[MrShed]

Fair is not legal - they are two different things.

 

Under the HA 2004 act, if the court establishes that either:

 

- the deposit is not protected; or

- the initial requirements of the deposit scheme were not met

 

Then the deposit will be forced to repay AND 3 x deposit penalty must be enforced.

 

I dont see any ambiguity I'm afraid. The initial terms were not met, and as such the deposit and penalty must be paid.

 

I repeat - Draycott was based upon a deposit held in the DPS, which did not have the 14 day timescale stipulated as an initial requirement. MyDeposits DO.

 

I believe that the judges in the Draycott case explicitly referred to the fact that no such initial requirement was set, and that they said that if the initial requirement was in fact set, then the judgement would have been different.

[Britannia1]

The Honourable Mr Justice Tugendhat stated that s213 requires (A) the deposit is protected and (B) it is protected within 14 days. However, the penalty provisions ONLY apply to (A) and NOT (B). Therefore as long as the deposit is protected (prior to proceedings) the x 3 penalty (fine) DOES NOT apply.

 

Could anyone legally qualified give their input on this.

 

Mr. Shed I appreciate your comments, but I don’t need anymore input from you.

 

Thank you.

[MrShed]

Britannia - I find your comment rather insulting.

 

Is this another case of "anyone is welcome to assist, as long as you agree with me?"

 

Dont go into this blind. The Housing Act is pretty unequivocal, as is the precedent case you refer to (which you conveniently leave out the areas concering initial requirements).

 

If you dont believe me, simply read the Housing Act (I have taken the liberty of bolding the area in question).

 

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.

 

Your response begs the question - if you feel you know the answer, why on earth are you posting on a forum if you do not like the contrary answers received?

[Britannia1]

Mr Shed , thanks again.

 

It all boils down to the fact I have tenants not paying rent and there are examples where Landlords like me in good faith protect the deposit and then the tenants think 'Charity time' lets rip of the Landlord.

 

I would be interested to hear from any other Landlords that have hit a bad experiance like I am suffering at the moment.

 

Thank you.

[MrShed]

Britannia - what I would say first and foremost is that I fully sympathise with your position - please do not take the posts above as anything other.

 

I have a track record (!) on these forums of expressing my personal opinion of the Housing Act 2004 as being nothing short of draconian towards landlords, and imposing completely disproportionate punishment upon minor breaches.

 

This is especially so in your case - the deposit is, after all, protected, and so there is absolutely zero loss or suffering to the tenant for such a minor breach.

 

So, all in, I sympathise very strongly. Were you to have a full deposit return and penalty against you, clearly you have (from a "moral" perspective) been very hard done by.

 

That said - unfortunately the law is clear.

 

However, you may well have a fighting chance in court.

 

The reason I say that is because it would appear the tenants are pursuing on the basis of the deposit not being protected within 14 days, rather than the initial requirements not being met.

 

As such, they are highly unlikely to bring a copy of the initial requirements to the courtroom as evidence. As it is not in your best interests to bring them, then neither will you.

 

Therefore, the tenant will have to go on the 14 day timescale ONLY - which is NOT an offence punishable via penalty under the Act (and as established by Draycott).

 

I sincerely hope that the "letter of the law" is not applied to you in court.

 

If you are looking for similar experiences, here is perhaps not the best place - it is relatively tenant-centric.

 

Try www.landlordzone.co.uk ...

 

Please let us know how you get on - I will be following eagerly.

[Steve__M]

As far as I am aware, there is noone on this site who admits to being legally qualified.

 

On another site I use, where there are legally qualified people, they *also* do not fully understand how the legislation will apply.

 

The question you need to answer to help resolve your very unpleasant situation is:

 

- Does mydeposits have any "initial requirements" that have to be met when protecting a deposit?

 

"Initial requirements" is the term used in the legislation. DPS was found not to have any initial requirements in the Draycott case. I know that TDS *do* have quite strict initial requirements, and tenants have reported successfully suing their landlords even though the deposit was apparently protected, because at the end of the contract TDS refused to get involved.

 

I don't know what the mydeposits initial requirements are. I couldn't find any on their website (but I'm not a member) Mr Shed says they have some.

 

I suggest you ask them. Give them the full circumstances and ask them whether you have met their "initial requirements".

 

If they tell you that you have not met their initial requirements, you

still have the option to reprotect the deposit with DPS, assuming that they have not created some initial requirements since the court case (they tell me their legal team are reviewing the judgement).

[Steve__M]

Mr Shed, do you know what mydeposits "initial requirements" are. They don't appear to be on the front of their website. Maybe you have to join up to find out.

[MrShed]

Steve/Britannia - mydeposits initial requirements are here:

 

http://www.mydeposits.co.uk/pdf/mydeposits_Scheme_Rules_v3.pdf

 

That is an interesting point Steve makes regarding reprotecting with DPS. I'm not sure whether this will remove the liability, but as it is untested, it perhaps cant harm...

 

The reason I say it may not remove liability is that the deposit was protected and initial requirements not met - whether this is different in a subsequent deposit scheme does not neccessarily "remove" the earlier breach.

[Britannia1]

Mr Shed please accept my sincere apologise if I came over as a bit of

a ‘t--t’ I only want to save having to pay out a large fine, when in fact I have a sick daughter aged (12) and I need the money for Kelly.

 

I am also having work problems where I could loose my job of 15 years and to have the stress of a tenant not paying rent that I have to cover on a £900 per month Buy to Let mortgage is really putting me under a lot of stress and then to have the tenants demand £3,400 plus cots, when I protected the deposit, soon after they moved in, is all a bit much.

I am very sorry if I offended you. I apologise.

 

Steve. Thank you very much as well for you help.

 

Thank you both very much for any help you can give me.

[MrShed]

Dont worry - no offence taken.

 

As I say, I sympathise strongly.

 

I think your main strong point is to keep the "initial requirements" component under your hat, and do not submit them as evidence.

[Steve__M]

Curiously the mydeposits document says that you should "undertake to obtain protection" within 14 days. Even though the deposit wasn't protected within 14 days, the evidence points to Britannia having "undertaken" to do so!

 

I would definitely phone mydeposits. If they are prepared to say they *are* protecting the deposit, then that may be fine. If not, then find the money and get it protected in DPS.

[MrShed]

Thats a valid point Steve - one that I missed.

 

Guess it depends what the court take as "undertaking to obtain protection"!

[Britannia1]

Will do. Thank you

[Britannia1]

Do you think I should do as Blitz said, send the tenants a letter stating :

 

"It might be worth an out of court letter explaining the Draycott v Hannells defence and any claim will be vigorously defended in court".

 

Thanks.

[MrShed]

I dont think it can harm.

 

It is certainly an absolute defence to their specific legal argument.

 

My only concern is that it may get them to look a bit closer at the HA....

[Britannia1]

Thanks again for your help.

 

Kind regards.

[lawdoctor]

Hi Britannia1

 

Sorry I hadn't read this thread earlier as along with MrShed, SteveM and the rest of the regular gang I would have given you my twopence worth as it were!

 

You seem to be in a bit of a pickle and understandably upset.

 

You ask for legal advice and of course we on this forum, although we offer our experiences and advice freely, are not qualified under the provisions of the Legal Services Act 2007 to offer advice as being legal advice whether free or not.

 

So that's the serious stuff over and done with now lets move on.

 

To lighten your mood please allow me to indulge you in a little joke;

 

Man walks into solicitors office and demands to know how much the charges are.

Solicitor, unfazed by his forthright, abrupt approach says "I charge £500 to answer 3 questions!"

Man says "£500 for 3 questions, don't you think that's a bit steep?"

solicitor "yes I agree, now what's your third question?"

 

Silly I know but nonetheless somewhat factual!!

 

I posted on another thread a reply that I believe may have application in your circumstances, should this be the case I believe that the decision in the recent High Court decision of which you are aware may well work to your advantage in the pending claim against you.

 

As a technophobe I will now go off in search of my own post of which I speak and load it up shortly to this thread.

 

Please study carefully the reference to schedule 10 sections 9(1) & (2), you might see that in using, hopefully, the reply that the deposit is protected in accordance with the schemes rules combined with the decision in the recent High Court case may dissuade your pursuer from proceeding any further.

 

I must confess to having not read in any great detail your post and will correct that discourteous position before we speak again.

 

Lawdoctor

[lawdoctor]

Britannia1

 

Hope this may be of some assistance. I will now familiarise myself with your post.

 

Always remember that in law if you can't find the answer you need then just view the question in a different way!

 

Schedule 10 section 9(1) and (2) provide you with a statutory right to request information from a scheme administrator as to whether or not a deposit is being held in accordance with the schemes rules. This provision demands that the schemes administrator responds to such a request as soon as is practical.

 

For your convenience I reproduce below the relevant provisions;

 

Notifications to tenants

 

9 (1) Every custodial scheme or insurance scheme must provide for the scheme administrator to respond as soon as is practicable to any request within sub-paragraph (2) made by the tenant under a shorthold tenancy.

 

(2) A request is within this sub-paragraph if it is a request by the tenant to receive confirmation that a deposit paid in connection with the tenancy is being held in accordance with the scheme.

 

I am not personally aware of any such request being made under the provisions quoted above but can see no reason in law for the scheme administrator to refuse a request if made under schedule 10 section 9(1) and (2) as mentioned above.

 

You should head up any request to the scheme administrators with the words TIME IS OF THE LEGAL ESSENCE (COURT CASE 26TH FEBRUARY 2010) and request email response. Limit your request simply to confirmation that the deposit was not protected and the request for confirmation that a deposit registered after the tenancy ended would or would not be held in accordance with the schemes rules.

 

Regards

Lawdoctor

 

 

[Britannia1]

Lawdoctor,

 

I am being offered some very good advice on here and by the Guild of Residential Landlords being a member. My main focus is to use the recent High Court case as my deposist.co.uk use similar wording, using this plus the tenants not paying £850 rent for 2 months. I now know there is information on the x 3 deposit penalty in the Housing Act wording, but you would think all 3 deposit schemes would have this wording in red accross the paperwork then every Landlord would focus on by hell or high water getting the deposit sorted within 14 dyas, in my case I had Kidney stones and was then feeling like I was on deaths doors steps, but I unders s,214 eveb this or death can be used to justify not complying. I do hope the Judge can see I am being ripped off or the tenants 15,000 or so friends that have moved over from Poland to Southampton will thinks its Las Vegas, with every Landlord a potential guaranteed cash win. Thanks for you input.