deposit not being returned despite agreement

[njm88]

Hi,

When it comes to things like this I am clueless & I have tried to look this up but to no avail.

 

I moved out of my flat in February and came to an agreement with the estate agent about returning my deposit when we signed the check-out inventory on 16/2/12. He told me my deposit would be returned within fourteen days (so by 1/3/12) - it wasn't. I rung him on that day and asked why my deposit had not been returned & when it would be. He said "sometime next week" and was very abrupt on the phone. Still no deposit.

 

I did some research & later found that my deposit should actually have been returned within 10 days (Code of Practice for Residential Letting Agents - paragraph 12c). I moved in to the flat on 12/6/11 and my deposit was not registered until 14/12/11 & that was only after my insistence for six months! These are just two of the issues I had in my tenancy, which I documented in a complaint to him by email and by letter sent by recorded delivery which I can see he has signed for. I have tried calling him and leaving messages but he is still not getting in touch with me.

 

How much time should I allow for him to get back in touch with me? Should I start looking for a mediator or registering this in a small claims court? I will be making a complaint to the Property Ombudsman.

 

Thanks for any help anybody can give me, I'm at my wits end.

[deeprules]

I am in a similar boat, suggest you start a court claim.

[Ed999]

My comments only apply if the premises are entirely within England, and you were granted a shorthold tenancy (under which you have exclusive use of a separate dwelling, and the landlord does not live in the same building), and 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

 

The Tenancy Deposit Scheme (TDS) was created by the Housing Act 2004. The scheme requires a landlord to protect any deposit which is paid on or after April 2007 by a tenant.

 

For full details of the Tenancy Deposit Scheme, see:

 

• http://www.legislation.gov.uk/ukpga/2004/34/part/6/chapter/4

 

If the landlord does not comply with the requirements of the scheme, a tenant can sue under section 214 of the Act:

 

• http://tenancyanswers.ucoz.com/index/section_214_claims/0-45

 

 

The landlord or agent must pay the deposit into a custodial deposit protection scheme, or must hold it in a separate account protected by insurance.

 

The tenancy agreement must state which scheme is to be used, and the circumstances in which all or part of the deposit can be withheld at the end of the tenancy.

 

 

Housing Act 2004

 

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.

 

The outcome is uncertain. It's not clear whether a claim under section 213(5) can succeed after the tenancy ends, nor is it clear whether a landlord can comply with section 213(5) more than 14 days after the deposit was paid. Also, it's likely that a landlord, facing a claim for repayment of the original deposit, will allege disrepair to try to persuade the court to let him keep that deposit.

 

 

If you paid a deposit, read the FAQs about the tenancy deposit scheme, under which you might be entitled to sue for compensation if the deposit has not been protected, under the Housing Act 2004, if you were granted a shorthold tenancy:

 

• Tenancy Deposit Scheme

 

• Tenancy Deposit Protection - First High Court Decision (Draycott v Hannells Lettings Ltd)

 

• TDS eligibility, implication of breach and legal questions answered

 

 

A tenant can apply to the Court under section 214 of the Housing Act 2004, on the grounds that section 213(4) or 213(6)(a) or 214(b) has not been complied with.

 

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, the court cannot award the penalty of three times the amount of the deposit.

 

This was NOT affected by the High Court decision in Potts v Densley (6th May 2011). In Tiensia the landlord had protected the deposit at a time when the tenancy still existed; in Potts the landlord protected it after the tenancy had ended. 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 decided in Gladehurst Properties Ltd v Hashemi (19th May 2011), a case in which the tenancy deposit was never protected, that section 214 of the Act 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. The Court of Appeal said that this is so only when the tenancy is still in existence, that therefore the penalty for non-protection of the deposit is NOT available after the tenancy has come to an end [see paragraphs 37 and 42 in the Judgement], and that a tenant therefore CANNOT succeed in a section 213(3) claim once the tenancy is over.

 

Tiensia and Potts have to be considered in the light of the decision in Gladehurst; but only time will tell which is the more important decision.

 

The practical effect of Gladehurst is that the tenant must make any claim arising under section 213(3) at the BEGINNING of 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 it can't be ended by a section 21 notice at any time after that, either, if the deposit is not protected.

 

Hence, as a result of Gladehurst, a claim under section 213(3) 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.

 

If you sue, Gladehurst says the crucial point is whether the court hearing takes place BEFORE or AFTER the tenancy has ended, not whether the tenancy existed when you began the court proceedings.

 

 

Due to the above-mentioned court decisions, the practical effect of a tenant suing for the statutory penalty is likely to be that a properly advised landlord will protect the deposit, so as to avoid the penalty, if the tenancy still exists. Even though that's not what the court claim asks for, such protection is some benefit to the tenant.

 

Suing for the statutory penalty, or merely threatening to, might cause the landlord to return the entire deposit, without any deductions, thereby resolving a dispute.

 

None of the foregoing prevents the tenant succeeding in a claim for the return of the original deposit (a claim which can only succeed AFTER the tenancy ends, as the deposit is security for non-payment of the rent and for damage caused during the tenancy).

 

 

The Act expressly states that the parties to the tenancy cannot agree not to protect the deposit [section 213(9)]. So it's futile for the landlord to raise this defence - but many still try to!

 

 

Alternative Dispute Resolution

 

If it is a shorthold tenancy, where there is a dispute concerning disrepair at the end of the tenancy the following matters apply.

 

If the deposit paid by the tenant is currently still protected within an authorised TDS Scheme, the Deposit Protection Service (DPS) - who administer all TDS Schemes - offer an alternative procedure for resolving disputes, to save you having to go to court.

 

They have issued a guide, explaining the disputes procedure they provide:

 

• A Guide to Tenancy Deposit disputes and damages

 

Where a deposit is protected by being placed in the TDS scheme, if a dispute arises at the end of the tenancy (e.g. over alleged disrepair) the parties can choose to resolve it by this procedure instead of going to court (but must begin the procedure within a time limit).

 

Both the landlord and the tenant must agree to use the DPS disputes procedure. It cannot be initiated by only one of them. But it can be MUCH cheaper than a court case.

 

The same procedure applies in ANY dispute concerning a tenancy deposit protected in a TDS scheme, regardless of the type of scheme involved (i.e. whether it is a custodial scheme or an insurance scheme), and regardless of which of the three authorised bodies is administering the scheme.

 

Further information: Deposit Protection Service (DPS) website

 

 

Who do I sue?

 

An agent is not liable for actions carried out on behalf of a known principal, so you probably can't sue the Letting Agent. It's the principal, i.e. the landlord, who's liable to you under the tenancy contract, if you knew the agent was only an agent (and possibly even if you didn't know that).

 

 

Letter Before Action

 

If you intend to sue, then once the tenancy has terminated you can consider whether to write a letter before action [LBA], threatening to sue, giving the traditional 14 days notice.

 

This is what you might say -

 

Dear Sir,

 

Premises at _______________________

 

With regard to my tenancy, I require you to refund to me the full rent deposit which I paid, in the sum of £_____.

 

Further, I require you to pay to me, in addition, three times the amount of the deposit, as a penalty for your failure to properly protect my deposit under the Tenancy Deposit Scheme.

 

If I have not received the total amount of £_____ within fourteen days from the date of this letter I will commence a claim in the County Court for that amount without further notice to you.

 

Yours faithfully

 

You will of course only include in the letter those paragraphs of the above draft that are actually relevent in your situation.

 

Keep a photocopy of the letter. Send the original by 1st Class post, and obtain a free 'Certificate of Posting' at the Post Office counter when you hand it over.

 

 

Suing

 

Read the Court Service's leaflet How do I make a court claim (Form EX302), which contains detailed guidance on suing in the County Court.

 

 

Court Forms

 

Form N1 is for claiming the original deposit only.

 

Form N208 is for claiming both the original deposit AND the statutory penalty of three times the amount of the deposit.

 

Money Claim Online is a cheaper online method of claiming on form N1.

 

To make a money claim for a fixed amount not exceeding £100,000 you can start the claim using the Court Service's Money Claim Online website, as a cheaper alternative to using form N1.

 

 

Other Court forms are available at:

 

• Court Forms or search for the form you need at Search for forms.

 

 

Wording Your Claim:

 

If you intend to make a claim using form N208, you MUST first read the Sticky thread on how to word your claim:

 

•

 

 

The current Court fees are set out at:

 

• Court Fees