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Appeal for help with tenant deposit issues please


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Dear Members

I am an incidental landlord having lost my job and forced to relocate to an alternative location for a job. Unfortunately, I foolishly and naively did not do adequate research when renting out my house to a neighbour's close relative. As a result, I did not protect the tenant's deposit - I provide a chronology below. A catastrophic falling out, followed by non-payment of rent forced me to seek repossession under S21.

I successfully obtained an Eviction Order as a direct outcome from the help I got from you!

 

I would be grateful for your thoughts, views and suggestions.

 

The matter I have set out below is a result of my own naivety and foolishness having not done my research properly as an amateur and accidental landlord:

 

Issues
:-

 

(i) Is the former tenant right in asking for the return of the deposit even though it was paid by a party unrelated to the contract over a year before the commencement of the tenancy agreement in question?

(ii) Are there certain legal arguments that might be of material relevance to my dispute with the tenant – for or against/

 

Facts of matter / chronology

 

I became an accidental landlord when I lost my, and I was forced to leave the 3 - bedroomed home and relocate to a new job some four hours’ drive away. I put my house up for renting.

 

My neighbour’s two granddaughters took up tenancy (AST) in my house consecutively following heart felt pleas from my neighbour of 15 – years.

 

(i) The first granddaughter (A) was aged 17 and a teenage mother. Her parents were guarantors and provided the surety / deposit on 29/08/11. I did not protect the deposit purely out of ignorance and foolishness on my part. I did not do my research well.

(ii) The neighbour approached me again in 2012; saying that ‘A’ had turned 18 was now ready to move out to smaller accommodation.

(iii) The neighbour asked me if I would be agreeable to an arrangement where another granddaughter (B) and her family would move into the house as a straight swap between the two cousins (A and B). There was an unspoken and unwritten assumption that ‘A’s deposit would be rolled over to the second B’s tenancy.

(iv) The house swap between A and B happened in October 2012 when B’s family took occupancy of my house. I never communicated with ‘A’ and ‘B’ directly – but always through their grandmother, my neighbour.

(v) However, around July 2013, B contacted me directly and asked me to allow her mother to move in with her for 3-months; this was my first direct contact with the tenant.

(vi) In August, the tenants (B) asked to agree to having cavity wall insulation installed using their state benefit status in return for a reduction in rent, I refused and relations pretty much soared bitterly thereafter following rude e-mails from B.

(vii) Some 4 – months after the end of the initial 6-month contractual period, B brought up the ‘deposit scheme’ issue saying that this had not been deposited within the 30-day window. I asked ‘B’ to confirm in writing that they had paid ‘A’ her deposit which they did. I immediately protected the deposit and served the prescribed information on ‘B’ but they refused to counter sign the deposit scheme certificate.

(viii) I served a Section 21 Notice to quit which went undefended, leading to the issue of an Eviction Order.

(ix) The tenants eventually abandoned the property, leaving a trail of damage and destruction and £1830 in unpaid rent. They left bulky items and abandoned furniture items.

(x) The tenants are now seeking redress for unprotected deposit and have issued a letter before action demanding £575

 

If I were to send a cheque for the asked for money 'in full and final settlement' - does Members please advise me on any further wording I might need to add to the cover letter in order to protect myslef?

 

I thank you in advance.

 

 

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Hi Mak6

 

f16 is correct this may be better in the Residential Lettings area so I will move your thread to there and leave a short redirect so you know where your thread is.

 

Its administrative so nothing for you to do.

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I cannot give any advice by PM - If you provide a link to your Thread then I will be happy to offer advice there.

I advise to the best of my ability, but I am not a qualified professional, benefits lawyer nor Welfare Rights Adviser.

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Could you clarify the following:

 

1. So (B) move in on October 2012 was there a written AST?

 

2. Are (B) parents named as Guarantors?

 

3. Is (B) Deposit protected in a TDS and if so have you checked (B) hasn't claimed deposit back from the scheme?

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I cannot give any advice by PM - If you provide a link to your Thread then I will be happy to offer advice there.

I advise to the best of my ability, but I am not a qualified professional, benefits lawyer nor Welfare Rights Adviser.

Please Donate button to the Consumer Action Group

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Thank you Stu007 for taking the trouble to read my post.

 

1. Yes, there was an AST for 'B';

2. 'B's parents are not named on the AST, only 'A's parents who paid the surety which is assumed to have rolled over into 'B's contract.

3. 'B's deposit was deposited into a scheme long after the their AST commenced but within days after they finally confirmed that they had paid 'A's parents the £575 (which they had paid at the beginning of 'A's contract (NB was 17 - years old at time of signing AST; I foolishly didn't protect her deposit through lack of proper research on my part).

 

I hope I've shed light on your queries Stu007.

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Can you confirm that you protected the Deposit in a TDS before you issued the S21 notice?

 

Have you informed the TDS of the dispute?

 

How long has it been since the eviction date? (remember you have a set amount of days in which to return a deposit at the end of tenancy and if their is a dispute to contact the relevant TDS and place it in dispute)

 

I assume from what you have written there may not have been a check in/check out inventory taken and photographs of the properties condition on move in/out which could make claiming some of the damages difficult.

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I cannot give any advice by PM - If you provide a link to your Thread then I will be happy to offer advice there.

I advise to the best of my ability, but I am not a qualified professional, benefits lawyer nor Welfare Rights Adviser.

Please Donate button to the Consumer Action Group

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Should you not be considering also how to deal with their debt to you. If the deposit is £575 then you are potentially looking at returning £575 to them plus a £575 "fine" (it could be up to 3 times £575, but hopefully the judge will fine the minimum in this case).

 

You would then need to pursue them for the rent short-fall and/or damage etc.? Do you intend to do this.

 

If so, do you have adequate evidence, and a reasonable chance of getting your money back?

 

And get cavity wall insulation yourself! It's not that expensive and you save a lot on your bills.

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Thought this OP sounded familiar -

http://www.landlordzone.co.uk/forums/showthread.php?63307-Appeal-for-help-with-tenant-deposit-issues-please

 

 

Tenant A (deposit not protected) has a case against you for non-protection for return of deposit and 1-3 x compensation in next 6 yrs, even though it was later used & protected for different, though related tenant.

Return deposit amount, as cheque payable to T A's parents, get a dated receipt, or they can hand it back to you for T B's deposit

.

Just hope T A does not realise she could make some easy money from your oversight.

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first point, as T A was under 18 she cannot sign and be held liable for a contract! so probably ok there, depending on Judge though if anything comes of that.

S21 not valid if deposit not protected, so you would have had to give them that back to get court action for eviction.

Suggest you consider taking them to court, or at least send LBA ,for unpaid rent and damage and see how they respond; keep deposit at the moment or offset it against your claim.

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Thank you all - Stu007; Steve_M; Mariner51; Raydetuni: Just to touch on some queries for clarification starting with Stu007's queries:-

(1) I protected the deposit into a TDS scheme before service of a S21 Notice and Repossession Order was issued on that basis; (2) I have not informed the TDS of the dispute as the tenants have since left and made no representations as regards the deposit; (3) The tenant eventually abandoned the property so the exact date of departure is unknown but the Repossession Order stipulated 26 February 2014 as the eviction date. (4) You are right, there was no check in / check out inventory (all based on friendly neighbourly fashion, a huge mistake on my part. I have cut my losses on the inventory aspect.

 

Steve_M:- I intend to counterclaim for the rent arrears. I have evidence of non payment of rent as the tenants cleared stated so in various e-mails. As regards realistic prospects for getting the money back, it doesn't look likely because, since the tenant's departure - there have been three bailiffs looking for the former tenants.

 

Cavity wall is already in place.

 

Mariner51 - "...Return deposit amount, as cheque payable to T A's parents, get a dated receipt, or they can hand it back to you for T B's deposit

..." Thank you for this - especially in the absence of any confirmation that ex-tenants ('B') paid ex-tenant's ('A's) parents to allow roll-over of deposit. So yes, I will send a cheque to 'A's parents first thing tomorrow and see how things go. On that note Mariner51, does the fact that 'A' was aged 17 play a part in terms of signing a contract? A's parents were the gurantors, does that follow that my contract was with them although they did not live in the rented house. Where does this leave tenants 'B' who are now claiming that the deposit was theirs? Raydetinu alludes to this point below.

 

- Does the fact that the Court issued a possession Order based on the Section 21 Notice destroy the tenants' argument that their deposit was not protected within the requisite 30 - days?

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Thank you Raydetinu. Just for clarification, the deposit was protected before the S21 Notice but well after the 3-day period had lapsed. The Repossession Order was issued as a result. Tenants' 'B's argument is that the deposit was not protected within the 30-day window - although they never provided me with notification that they had in turn, paid tenant (a cousin of theirs) the deposit which they are now claiming that it was theirs.

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My#10 was written before I read subsequent posts, and am even more confused now!

Were the 2 g'dau Ts siblings, ie same parents?

I don't see how B's family can be Ts unless named on orig AST, but you say mother moved in 3 months after B, at Bs request. Did you add them to AST then?

As B confirms they repaid £575 deposit to A and you imm protected A's deposit in B's name, then don't repay deposit to A, though she still can bring claim for non-protection. B appears not to have such claim as you protected the deposit for B's Tenancy as soon as repayment was confirmed. Would have been diff if A & B had been joint Ts orig.IMO.

 

 

Whilst a 17 yo cannot sign a legally binding Contract, many Judges disregard this for ASTs signed by 17 yo, esp if person felt they could no longer live at home and you took pity on a pregnant girl.

 

 

There are no incidental or accidental LLs in the Letting business, only inexperienced ones and you have made some classic mistakes, with the best of intentions I am sure, but they could cost you dear,

Since we cannot read the ASTs etc, I suggest you contact a rep local Solicitor who specialises in LL & T Law for more advice.

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  • 4 weeks later...

Thank you very much Mariner51 and I am sorry for the delayed expression of gratitude which has been due to a family bereavement.

 

I have now paid the money to A's parents who were her Guarantors (as she was 17 at the time) - they have since banked the cheque. I now await B to execute their threat for taking me to Court for non-protection of deposit which presumably they never paid, assuming that A's parents' acceptance of the money which they had paid on behalf of their daughter had never been paid back to them by tenants B (as claimed by B earlier).

 

If there are any further developments and I need help, I'll certainly get back to you Mariner51. Thank you for your time and comments once again.

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