Unfair Deposit Deductions on Non-Protected Deposit

[SophieLou]

Here's the whole, complicated, story.

I moved into a property in March '09. My move-in inventory annotated chipping paint and faded carpet in the second bedroom. I never received information from the DPS with whom my landlord was contractually obligated to enroll my 1,425.00 pound deposit. As I was new to the country and we don't have this law in America I didn't know anything was wrong. Fast forward two years. I notified my landlord in October '10 that I would be moving out in March '11, plenty of notice. 31 Jan '11, I moved some furniture to find more chipping paing and immediately emailed the landlord to let them know repairs would be necessary. I moved out at the end of Feb '11 and did the walk-through with my landlord's secretary. When moving a wardrobe in the second bedroom more damage was found consistent with the chipping paint previously annotated. It can be easily deduced that this was consitent with water damage and was obviously a pre-existing issue. The secretary agreed that everything else was satisfactory and I should not be considered liable. She said she would discuss it with the landlord and get back to me with his descion. After repeated emails over the span of three months I finally threatened legal action if I didn't get a response. I then got an email 99 days after I had moved out, this time from the landlord rather than his secretary. He stated the water damage was my fault and he was keeping 1108.00 from my deposit and would send me a cheque for the remainder. I voiced my displeasure with this conclusion and stated that I would be seeking legal counsel. Unfortunately, I have spoken with people from the housing authority, Citizens Advice Bureau, and finally Shelter who told me I will have to take him to court to sue for the remainder of my deposit. This is necessary as the landlord did not enroll my deposit in any of the protection schemes as he was legally and contractually bound to do. I have kept all email correspondence, move-in inventory, original lease agreement, and the cheque for 317.00 sent by my landlord. The one thing I don't have is pictures, stupid I know. I was told the cost of taking him to court would be 1,500.00 and I'd also have to pay a solicitor. I would like to sue him for three times the amount, plus fees, but he could still protect my deposit and get away with this. He is a well-off busnessman with at least four companies and can probably afford a good solicitor to get him out of this so I really need sound advice on my next move.

[withallmyhart]

Hi sounds like you could do with a bit of advice to see if you could do the legal paperwork your self. Has any one mentioned the small claims courts? Go to their website by searching for small claims Court. I did notice that the maximum that if the claim is for over £5000 or against a company then its best to seek legal advice. May be some one on here who knows a Tad more than me is willing to help! (it wouldn't take much more to know more than me on this hahaha)

[Steve__M]

I'm not that knowledgable on how to sue. Suggest you read the sticky posts at the top of the forum.

 

Suing for just the return of your deposit is relatively straightforward, and you can issue a claim online (moneyclaimonline). The costs are small compared with your deposit and as it is likely to be allocated to the "small claims track" in which case you should not have to pay the opposing side's legal expenses if you lose.

 

Suing for the protection of the deposit is more expensive and the risk of costs is higher. You could start out by threatening to sue and mentioning the 3x "fine" if the deposit is not returned. Note that if the deposit is protected before the hearing then you will not get the 3x "fine" and may not get your costs back.

[SophieLou]

The housing authority called my landlord's office but was told by his secretary that he was gone until Monday. She has been informed of the situation and the possibility of legal action so I assume she is lodging the deposit for him. I'm hoping we can then go through the ADR process and I can at least recover the remainder of my deposit. I've contacted a solicitor but she sounds quite hesitant, stating the cost would probably outweigh the reward, so I have very little faith at this point. If anyone knows a good solicitor willing to look out for the little guy in or near Suffolk let me know. I would prefer they didn't charge an arma and a leg but money is soon losing it's importance in this case as now I'd like to go after this crook on principle.

[Ed999]

My comments apply only if the premises are entirely within England and Wales, and only if you were granted a shorthold tenancy (under which you - and your spouse/partner/children, if any - had exclusive use of a seperate dwelling, which was not shared with another tenant nor with the landlord), and only if you were over 18 years of age when the tenancy was granted.

 

This posting is supplemental to the information in this forum's "sticky" threads and is NOT to be read in isolation.

 

 

Tenancy Deposit Scheme

 

If the tenancy has ended: you CAN sue for the return of your original deposit; but you CANNOT sue for the statutory penalty of three times the amount of the deposit - except, perhaps, if your claim is made under section 213(5) of the 2004 Act.

 

 

If you paid a deposit, read the FAQs about the tenancy deposit scheme under the Housing Act 2004, if you were granted a shorthold tenancy:

 

- Tenancy Deposit Scheme

 

- Tenancy Deposit Protection - First High Court Decision

 

- TDS eligibility, implication of breach and legal questions answered

 

 

The Court of Appeal decided in the case of Tiensia v Vision Enterprises that if the Landlord protects or repays the deposit even as late as the day of the court hearing, or at any time before judgement (if later), the court will not be able to award the penalty of three times the amount of the deposit.

 

This was NOT overturned by the High Court decision in Potts v Densley. In Tiensia the landlord had protected the deposit at a time when the tenancy still existed. In Potts, where the landlord had only protected it after the tenancy terminated, the Court rejected the tenant's argument that it was too late for the landlord to protect the deposit once the tenancy had ended [see paragraph 55 in the Judgement].

 

 

In a further development, the Court of Appeal has decided, in Gladehurst Properties Ltd v Hashemi (19th May 2011), a case in which the tenancy deposit was never protected by the landlord, that section 214 of the Act only makes sense if both options contained in it (i.e. return of the deposit or its payment into a TDS scheme) are available to the Court. The Court said that as this can only be the case if the tenancy is still on-going, the penalties for non-protection of the deposit are NOT available to the tenant after the tenancy has come to an end: the tenant CANNOT succeed in a claim for three times the deposit once the tenancy is over [see paragraphs 37 and 42 in the Judgement].

 

I quite realise that Gladehurst was wrongly decided. If the tenancy still exists, the court has no jurisdiction to order the return of the deposit, the purpose of which is to meet any rent arrears or disrepair when the tenancy ends.

 

But the practical effect of Gladehurst is that the tenant must make any claim for penalties DURING the tenancy. Remember, a shorthold tenancy can't be brought to an end by the landlord, by notice, in the first six months, nor during any fixed term; and can't be ended by a section 21 notice at any time after that, either, if the deposit is not protected.

 

 

In Potts, the tenant might still have won, if she had raised the related point that the landlord had failed to provide her with the prescribed information pursuant to section 213(5) [see paragraph 56 in the Judgement]. But she failed to do so (she based her claim solely on the landlord's failure to pay the deposit into an authorised scheme), thus she lost the case.

 

If you expressly mention section 213(5) in your claim, then you might win - even though the tenant lost in Potts.

 

The claim you need to make in this respect is for breach of section 213(5) [provision of prescribed information], not section 213(3) [securing the deposit]. If you claim only under section 213(3) you are likely to lose for the same reason the tenant lost in Potts. You must claim under both 213(3) and 213(5).

 

 

None of the foregoing prevents the tenant succeeding in a claim for the return of the original deposit (which the tenant can only sue for AFTER the tenancy ends, as it's security for non-payment of the rent).

 

The tenant will ask for either (a) the deposit back, or (b) payment of three times the amount of the deposit - depending whether you are suing after the tenancy ends or during the tenancy.

 

 

The Act expressly states that the parties to the tenancy cannot agree not to protect the deposit. So it's futile for the landlord to raise this defence - but many still try to!

 

 

As a result of Gladehurst, it is clear that a claim for failure to protect the deposit can ONLY be made BEFORE the tenancy has ended. The Court of Appeal in Gladehurst has overruled the High Court in Potts on this point.

 

In my opinion, the county court could possibly make a sympathetic finding in the tenant's favour, because the Act tends to favour the tenant, in terms of returning the original deposit. It's only in relation to the penalties that the Court of Appeal has severely limited the availability of the remedy.

 

 

ADR is not available where the deposit is not held by the TDS, because the ADR scheme is run by the TDS people, and is only for disputes concerning who they should pay the deposit to.

 

You must sue in the county court. No legal fees will be awarded against you if you lose, nor against the landlord if he loses, so long as the claim is for less than £5,000. There is no obligation to use a lawyer in such a case - called a 'small claim' - you are entitled to act in person, without legal representation.

Edited June 10, 2011 by Ed999

[Ed999]

My comments apply only if the premises are entirely within England and Wales, and only if you were granted a shorthold tenancy (under which you - and your spouse/partner/children, if any - had exclusive use of a seperate dwelling, which was not shared with another tenant nor with the landlord), and only if you were over 18 years of age when the tenancy was granted.

 

This posting is supplemental to the information in this forum's "sticky" threads and is NOT to be read in isolation.

 

 

Disrepair

 

Only the court can decide the outcome of each individual item of alleged disrepair. All we here can do is summarise some matters which you might usefully invite the court to take into account.

 

 

If there is disrepair, the tenant might be entitled in law to sue the landlord for damages (i.e. compensation).

 

Read this FAQ - Disrepairs in privately rented accommodation

 

Also, the landlord can't ask the tenant to pay (e.g. out of the deposit) for the cost of repairs which the law requires the landlord to do. What those repairs are is explained in that FAQ.

 

But the landlord is not liable until notice of the disrepair is given to him (O’Brien v Robinson [1973] 2 WLR 393, House of Lords).

 

If you intend to sue, you must follow the required steps in the Pre-Action Protocol for Housing Disrepair Cases. You will normally need to pay a Solicitor to deal with these steps, because they are quite unnecessarily over-complicated.

 

 

Deductions for Dilapidations at end of tenancy

 

The deposit paid at the beginning of the tenancy belongs to the tenant, and the burden is on the landlord to prove any deduction from it is justified. The tenant is not asked to prove anything.

 

If the landlord alleges damage, he must prove it. If there is no check-in inventory, the landlord really doesn't have a leg to stand on; so the tenant is in a stronger position where there is no check-in inventory.

 

 

Read the FAQ about what deductions the landlord can lawfully make from the deposit -

 

- Unfair deposit deductions

 

That FAQ explains the concept of 'betterment', and why the landlord is not allowed to make any deduction for betterment.

 

 

Also read this document - Fair Wear and Tear

 

It explains some aspects of the law regarding fair wear and tear, applying the principle that a tenant is NOT liable to pay for the cost of remedying ordinary wear and tear.

 

 

Also, the landlord can't ask the tenant to pay (i.e. out of the deposit) for the cost of repairs which the law requires the landlord to do. What those repairs are is explained in this FAQ -

 

- Disrepairs in privately rented accommodation

[SophieLou]

Thanks everyone for the advice. The links have been extremely helpful and have given me sufficient justification to go forward with legal procedings. As I am suing only for the return of my deposit I will be filing in small claims court on my own. Let us all hope it doesn't come to that but keep your fingers crossed for me in case it does. Also, any more advice is always appreciated. Thanks again to the great words of advice!

[Snorkerz]

This may help: http://tenancyanswers.ucoz.com/index/my_deposit_isn_t_protected/0-4

[SophieLou]

So we've had a new revelation in the situation. The housing authority was able to speak with the landlord and he said if there was a dispute he would "enroll the deposit and go through ADR". Quite interesting that he would choose those words, implying it was not already enrolled, since he swore up and down to me not one day earlier that it was enrolled with MyDeposits. Of course the scheme assured me it was not ever protected with them several times both before and after the landlord's statement. I filed my petition in court on Friday so I guess I'll just have to wait and see what happens. Everyone keep your fingers crossed and I'm more than grateful for more words of advice.

[Ed999]

I would like this thread to be accurate, in case anyone happens upon it who has a tenancy deposit dispute. So I'm adding the following rider, even though it does NOT affect you, as you are only suing for the return of your original deposit.

 

 

Reconsidering Gladehurst

 

Following discussions on another thread, I would like to clarify my previous comments, in the following respect.

 

Because Gladehurst concerns a section 213(3) claim only, it does not necessarily form an authority on a section 213(5) claim. This point is obscured by the fact that section 213 is barely mentioned in the Court of Appeal judgement, and section 213(5) is not considered at all.

 

The High Court had previously decided, in Potts, that the tenant can win a claim under section 213(5) if the landlord fails to provide the prescribed information, even where the deposit is actually protected. But in Gladehurst the Court of Appeal met a case in which the deposit was never protected at all; so it necessarily considered only the section 213(3) obligation, and not the entirely seperate section 213(5) obligation.

 

Alternatively, Gladehurst is limited as an authority to those cases in which the deposit was never protected at all.

 

Also, IMHO, Gladehurst was wrongly decided. The Court of Appeal said section 214 only makes sense if both options contained in it (i.e. return of the deposit or its protection in a TDS scheme) are available to the Court, and that this can only be the case if the tenancy is still on-going. But, in point of actual fact, where the tenancy still exists the court has no jurisdiction to order the return of the deposit - because the purpose of the deposit is to meet any rent arrears or disrepair that exists when the tenancy ends.

 

These points, taken together, seem to cast doubt on whether a claim under section 213(5) must inevitably fail, where the tenancy has ended; which is why I suggest the point is not finally settled.

 

However, before you start any court proceedings it would be prudent to obtain advice from a Solicitor as to whether a claim made under section 213(5) has a realistic prospect of success if the tenancy ends before the final court hearing takes place.

[SophieLou]

I finally got an invoice for the work carried out, for which I'm supposedly liable. It doesn't look right at all. The walls that were repaired were annotated on the move-in inspection as being rough and flaking paint and I most certainly don't think I'm responsible for cleaning and repairing gutters. Please let me know what you guys think. The claim was filed on Friday so now I just need to make sure I have solid references saying he's responsible and not myself.

 

Here's the invoice:

1. To clean right hand kitchen wall, make good and decorate.

2. To decorate ceiling only to hallway

3. To clean and remove damp plaster areas in other 2 rooms and redecorate only those as required.

4. To clear gutter and hopper outside at low level and re-point this wall where required.

Our price to carry out the above works is £988.00 + vat.

[Ed999]

My comments apply only if the premises are entirely within England and Wales, and only if you were granted a shorthold tenancy (under which you - and your spouse/partner/children, if any - had exclusive use of a seperate dwelling, which was not shared with another tenant nor with the landlord), and only if you were over 18 years of age when the tenancy was granted.

 

This posting is supplemental to the information in this forum's "sticky" threads and is NOT to be read in isolation.

 

 

The walls that were repaired were annotated on the move-in inspection as being rough and flaking paint and I most certainly don't think I'm responsible for cleaning and repairing gutters.

...

1. To clean right hand kitchen wall, make good and decorate.

2. To decorate ceiling only to hallway

3. To clean and remove damp plaster areas in other 2 rooms and redecorate only those as required.

4. To clear gutter and hopper outside at low level and re-point this wall where required.

 

 

Section 11 of the Landlord and Tenant Act 1985 imposes a statutory obligation on the landlord to keep the following in good repair and in proper working order: the structure and exterior of the dwelling, including drains, gutters and external pipes;

 

The tenant thus can't be asked to pay the cost of repairing gutters.

 

 

The damp - Have you considered whether this was caused by a damaged or leaking gutter? If it is, it would be outside the tenant's repairing obligations, because it would be caused by the landlord's failure to repair the gutter, something he has a statutory duty to repair under section 11.

 

If damp is due to condensation, the tenant pays the cost of the repair. But if it's caused by rainwater or groundwater getting in, due to the landlord's breach of his statutory duty to repair the structure of the building, the landlord pays the repair costs.

 

 

I note the various references to cleaning, and would just point out that mere cleaning may be covered by fair wear and tear, for which I gave you several links.

 

The tenant, in general, is not responsible for wear-and-tear, so can't be asked to pay the cost of repairing fair wear and tear.

 

 

As for the flaking wall, the landlord can't claim against you for items which were already soiled or damaged before the start of the tenancy. That amounts to 'betterment', which is not allowed. The check-in inventory is valuable proof that the wall was already in bad repair before the tenancy began.

Edited June 30, 2011 by Ed999

[Steve__M]

Section 11(2)a puts an obligation on the tenant to look after the property, so it doesn't appear to be absolutely clear that a landlord *cannot* charge a tenant for such work. A tenant of mine used to empty the fat out of his George Forman grill down the sink for example - I'd have charged him if he'd totally blocked the drain.

 

For a gutter I would guess that it would not be the tenant's responsibility, but would wonder if perhaps there would be a liability if the tenant acted to block the gutter or if a) the gutter is very easily accessible (without a ladder) *and* b) there is something in the contract about keeping it clear. Sounds pretty unlikely though.

[SophieLou]

Thanks so much for the confirmation of my thoughts! As for the gutters, I understand the previous thread questioning if it could perhaps be a tenant's responsibility. The gutters to which he is refering are quite high, completely inaccessable by ladder. As for the rest of the property, I took very good care of it and left it hoovered, dusted, mopped, etc. I actually left it cleaner than it was when I moved in. The landlord spoke with our housing office here on base and alluded to the damp being caused by the gutters or another pipe leaking, therefore not condensation. I ensured the property was clean and ventilated at all times. Like I've said before, I've already filed the claim so now I just have to wait for my day in court. I'm a bit nervous because the landlord seems to be trying to strong-arm me, saying he'll ask for lost rent income since the repairs prevented him from letting the property as soon as I moved out. I'm hoping this is just a bluff but, even if it isn't, I can't imagine how I could be held responsible for this. He had ample time to inspect the property and I informed him of the necessity for repairs before I vacated.

[Ed999]

Section 11 of the Landlord and Tenant Act 1985 imposes a statutory obligation on the landlord to keep the following in good repair and in proper working order: the structure and exterior of the dwelling, including drains, gutters and external pipes;

 

The tenant thus can't be asked to pay the cost of repairing gutters.

 

 

Section 11 is here: http://www.legislation.gov.uk/ukpga/1985/70/section/11

 

 

Yes. The landlord has no duty under section 11 to repair damage caused by the tenant [section 11(2)(a)]. The tenant is liable for the cost of repairs caused by breach of his statutory duty to use the premises in a tenant-like manner.

 

But in my judgement there is very little chance of finding the tenant up on the roof, intentionally damaging the gutters. The roof is typically safe from even the most careless of tenants.

Edited June 30, 2011 by Ed999