I Forgot To Protect Tenant's Deposit, Help!

[newbieLandlord]

I had a AST signed with a tenant before April 2007, however, we signed another one (after April 2007) after the first AST ends.

I was using my own AST template and forgot to erase the deposit protection section for that tenant. It is stated in the AST that the tenant's deposit is protected, however, it is not, I don't think i need to because the deposit was paid before April 2007.

At the end of tenancy, we have some dispute over the deposit, the tenant made some damages to furniture and he thinks that I am not charging him in a fair way. Now he ask how the deposit is being protected, and wish to use the dispute resolution service.

I haven't answered him yet, can anyone please give me some advice? since it's the first time of me being a landlord, I am not very experience... thanks

[renterbob]

I had a AST signed with a tenant before April 2007, however, we signed another one (after April 2007) after the first AST ends.

I was using my own AST template and forgot to erase the deposit protection section for that tenant. It is stated in the AST that the tenant's deposit is protected, however, it is not, I don't think i need to because the deposit was paid before April 2007.

At the end of tenancy, we have some dispute over the deposit, the tenant made some damages to furniture and he thinks that I am not charging him in a fair way. Now he ask how the deposit is being protected, and wish to use the dispute resolution service.

I haven't answered him yet, can anyone please give me some advice? since it's the first time of me being a landlord, I am not very experience... thanks

Welcome to the board newbie.

As a new HPC poster you are now ahead of the game, you'll get alot of good advice from posters here.

If it is not a renewal I suspect you will be liable to pay the tenant three months deposit.

Look on the bright side.. you will never do it again.

Goodluck with the business and don't be too tough with the renters, they're not all bad.

[newbieLandlord]

Welcome to the board newbie.

As a new HPC poster you are now ahead of the game, you'll get alot of good advice from posters here.

If it is not a renewal I suspect you will be liable to pay the tenant three months deposit.

Look on the bright side.. you will never do it again.

Goodluck with the business and don't be too tough with the renters, they're not all bad.

Hi, thanks for the reply, but....

1. What exactly distinguish a new AST and a renewal? We signed a new AST, but the deposit was paid way back.

2. If i state that I have protected the deposit but haven't done so, can the tenancy still claim 3x the deposit and could he sue me for breaching terms in the agreement??

God, I really hate dealing with such a troublesome tenant, anyway, thanks again for the reply

[asquithea]

Consensus over at LLZ (landlordzone.co.uk) is that AST renewals don't require protection of the deposit, for the reason you stated. Your AST, following directly on from the previous one with the same tenants, would definitely be a renewal.

The bit about deposit protection in the AST text makes things awkward though. Assuming the AST has already ended, write back to state the reason the deposit is not covered. The worst he could do is to pursue you for some sort of contractual breach; he's not covered by the new rules, and therefore not entitled to recompense of the deposit return and 3x penalty.

WRT the furniture damage, the usual questions apply: How good is the inventory, how old is the furniture, and how much of the damage could be considered fair wear and tear?

Edited October 26, 2008 by asquithea

[newbieLandlord]

Consensus over at LLZ (landlordzone.co.uk) is that AST renewals don't require protection of the deposit, for the reason you stated. Your AST, following directly on from the previous one with the same tenants, would definitely be a renewal.

The bit about deposit protection in the AST text makes things awkward though. Assuming the AST has already ended, write back to state the reason the deposit is not covered. The worst he could do is to pursue you for some sort of contractual breach; he's not covered by the new rules, and therefore not entitled to recompense of the deposit return and 3x penalty.

WRT the furniture damage, the usual questions apply: How good is the inventory, how old is the furniture, and how much of the damage could be considered fair wear and tear?

Hi, thanks for the reply.

For the furniture, there is no photographic inventroy, only plain words describe the furnitures are in some sort of good condition. But one thing in particular that worries me is the sofa. There are some sort of damages inside one of the arms, I can tell because the leather outside is no longer supported by anything. However, on the outside, there is no signs of the sofa being ill treated. Does that count as fair wear and tear?

[asquithea]

Very much depends on the furniture. If it was new when the tenants moved in, then I'd say there's been some genuine damage. If not, then I don't think you have a case, because the arm could well have been cracked to start with.

Even if the furniture were brand-new at the start of the tenancy, they're still only liable for the remaining lifespan. So if it cost £500 new, might reasonably be expected to last 5 years in a let property, and the tenants were in-situ for 2 years, they would pay at most £300, or the cost of repair. Same goes for carpets, appliances etc.

Edited October 26, 2008 by asquithea

[newbieLandlord]

Very much depends on the furniture. If it was new when the tenants moved in, then I'd say there's been some genuine damage. If not, then I don't think you have a case, because the arm could well have been cracked to start with.

Even if the furniture were brand-new at the start of the tenancy, they're still only liable for the remaining lifespan. So if it cost £500 new, might reasonably be expected to last 5 years in a let property, and the tenants were in-situ for 2 years, they would pay at most £300, or the cost of repair. Same goes for carpets, appliances etc.

Thanks asquithea, you have been very helpful. I know what to expect from the tenant now.

One final thing, what could be the maximum and minimum the tenant could ask for if he sue me for breaching the agreement? I don't know if he could relate it to DPS. Because:

1. As I have stated that the deposit is protected, he would expect a resolution service.

2. Because of the fact that I haven't protect the deposit, he lost the right to access to such service.

I am trying to work out how which scenario would be a greater lost to me,

1. Go ahead and deduct whatever amount the tenant is right from the deposit, avoid going into legal battle.

2. Go into legal battle with my tenant, try to get the amount I think is right from the deposit.

if my loss of going into legal battle is likely to exceed 1000 pounds, I think i will try to avoid it.

asquithea, could you please give me more advice here? Thanks in advance!!

[Nutter]

I had a AST signed with a tenant before April 2007, however, we signed another one (after April 2007) after the first AST ends.

I was using my own AST template and forgot to erase the deposit protection section for that tenant. It is stated in the AST that the tenant's deposit is protected, however, it is not, I don't think i need to because the deposit was paid before April 2007.

At the end of tenancy, we have some dispute over the deposit, the tenant made some damages to furniture and he thinks that I am not charging him in a fair way. Now he ask how the deposit is being protected, and wish to use the dispute resolution service.

I haven't answered him yet, can anyone please give me some advice? since it's the first time of me being a landlord, I am not very experience... thanks

I would be concerned in your situation. and the best advice i can give you is for you to say to the tenant that you have taken professional advice, and realised that you have made a mistake and refund the deposit in full and in addition treat them to a takeaway curry - and then cross your fingers.

Why? Well, you entered into a contract stating that you were paying the money to the DPS and then you did not carry out your responsibilities under that contract. You are therefore liable for being sued for any loss the tenant has for you not fullfulling your part of the deal.

Secondly with respect to the damage, you need to be able to prove in court that the damage was beyond reasonable wear and tear. Based on what you have said about no visible damge to the leather, you will not be able to do this. How can you prove that the damamge did not exist before the tenant moved in? Finally what loss have you actually suffered? Are you renting the place out with the same sofa for the same rent?

For one year's total tenancy you can expect to find some wear and tear on your flat and the furniture. The minor level of this is consistant with reasonable wear and tear.

Mic

[newbieLandlord]

Hi Nutter, thanks very much for the reply, I think i know what to do now, a simple full refund would make my life a lot easier

[chrisk]

again another government scheme that increases the paperwork for a landlord and the cost to a tenant........

[renterbob]

again another government scheme that increases the paperwork for a landlord and the cost to a tenant........

nope.

It has given the tenant 3x deposit because the landlord has failed to abide by simple rules.

The tenant is quids in.

[JohnnyB]

Hi Nutter, thanks very much for the reply, I think i know what to do now, a simple full refund would make my life a lot easier

Probably the best thing to do here, though you could have registered the deposit at any time and then you would have a certificate saying it is registered in a TDS and there would be no problems. If the tenant disagreed with you on deductions then you can take them to a mediator and they will determine how much each gets, at which point the TDS releases the money to the relevant parties..

[renterbob]

Probably the best thing to do here, though you could have registered the deposit at any time and then you would have a certificate saying it is registered in a TDS and there would be no problems. If the tenant disagreed with you on deductions then you can take them to a mediator and they will determine how much each gets, at which point the TDS releases the money to the relevant parties..

Nonsense.

The deposit must be secured with a set time limit.

If this was my LL he'd be paying me 3x deposit asap.

[JohnnyB]

Nonsense.

The deposit must be secured with a set time limit.

If this was my LL he'd be paying me 3x deposit asap.

Not true Bob. The deposit certificate must be provided to the tenant within 14 days of them requesting it, which is quite possible to do. However, if the tenant never requests it then you can legally get away with not registering until near the end of the tenancy.

[renterbob]

Not true Bob. The deposit certificate must be provided to the tenant within 14 days of them requesting it, which is quite possible to do. However, if the tenant never requests it then you can legally get away with not registering until near the end of the tenancy.

I understood, though bow to your superior knowledge on this matter, that the deposit must be proven to be in the TDS within that timescale (14 days).

Example:

If I give 500 quid to you on 10th December as a deposit and don't ask if it's in the TDS until July 10th, and you come back and say 'the 500 quid was put in the TDS in March' I am going to get 3x deposit off you... 1500 smackeroos! Why? You should have put my deposit in the TDS within 14 days of December 10th, not July 10th when I asked you.

Is this correct JB?

(Apologies for my coming across abrupt)

[JohnnyB]

Afraid not, they simply have to supply the certificate within 14 days of them asking, and the time the deposit was protected is irrelevant. Ultimately the deposit needs to be protected before the end of the tenancy because you can't issue a S21 without protecting it.

[renterbob]

Afraid not, they simply have to supply the certificate within 14 days of them asking, and the time the deposit was protected is irrelevant. Ultimately the deposit needs to be protected before the end of the tenancy because you can't issue a S21 without protecting it.

Erm, I still can't agree with you here JB.

http://www.direct.gov.uk/en/TenancyDeposit/DG_066383

Within 14 days of receiving a deposit

The landlord or agent must give the tenant the details about how their deposit is protected including:

[Te Mata]

Afraid not, they simply have to supply the certificate within 14 days of them asking, and the time the deposit was protected is irrelevant. Ultimately the deposit needs to be protected before the end of the tenancy because you can't issue a S21 without protecting it.

Sorry JB, Bob is right.

It's 14 days from taking a deposit. Furthermore, you must notify the tenant with a section 213 notice (or something like that) within the 14 days, informing the T which scheme their deposit is in.

You *might* get away with not doing it in the 14 days for a while, but sooner or later, a savvy tenant is going to slot you for the 3x deposit. As an LL, it's just not worth screwing around with it. Just do it.

While the deposit is unprotected, you are unable to avail yourself of Section 21 either and any s21 issued will not be valid.

[asquithea]

Renterbob, while I personally agree with your reading of the law, over at LLZ they've found that the courts are taking a different line in most of the cases reported so far.

Provided that the LL protects the deposit by the time the tenant instigates legal action (or even up to the court date in some cases), the penalty is not being awarded. In other words, this 14 day limit is basically being ignored, and if you want to claim, you'd better start the action without tipping off the landlord.

On the plus side, it's at least forcing the deposit to be registered before S21 can be used, and pretty much all agents are now complying. It's just a shame (from the tenants point of view) that the real teeth of the bill have been blunted.

Edited October 27, 2008 by asquithea

[renterbob]

Renterbob, while I personally agree with your reading of the law, over at LLZ they've found that the courts are taking a different line in most of the cases reported so far.

Provided that the LL protects the deposit by the time the tenant instigates legal action (or even up to the court date in some cases), the penalty is not being awarded. In other words, this 14 day limit is basically being ignored, and if you want to claim, you'd better start the action without tipping off the landlord.

On the plus side, it's at least forcing the deposit to be registered before S21 can be used, and pretty much all agents are now complying. It's just a shame (from the tenants point of view) that the real teeth of the bill have been blunted.

That's good information Asquithea.

Renters should not tell the landlord they are instigating legal action as the LL is a scumbag.

The decent LL of course will be fine.

[Chrysalis]

so basically a court can interpret the law in their own way and noone can do anything about it?

[renterbob]

so basically a court can interpret the law in their own way and noone can do anything about it?

I think there may well be few naught LL/EAs here trying to get renters not to go to court, whilst knowing if renters take LL/EAs to court for not protecting their deposit within 14 days they will get shafted to the tune of 3X deposit.

We must ALL obey the LAW.

That includes LL/EAs with their heads in their assets.

[Abstra]

If he's been a reasonable tenant give him his deposit back you MUPPET. Renters get too much of this crap from LL's, greedy TwaTs. Off course there will be some ruffing up of the furniture someone's been living their.

[Planner]

I think there may well be few naught LL/EAs here trying to get renters not to go to court, whilst knowing if renters take LL/EAs to court for not protecting their deposit within 14 days they will get shafted to the tune of 3X deposit.

We must ALL obey the LAW.

That includes LL/EAs with their heads in their assets.

Renterbob you must stop giving out this incorrect information otherwise there are people going to be going to county court trying to sue (costing £150 by the way) when there deposit is protected and the prescribed information supplied, on the basis that it wasnt done within 14 days. The wording of the act that govens TDS claims is quite clear that there are only two instances when you can take your landlord/Agent to court (1) the deposit isnt protected or (2) the prescribed information hasnt been supplied. If the deposit is protected and the prescribed information supplied after 14 days, but before any court hearing - THEN YOU CANNOT CLAIM, there are no provisions in TDS legislation to allow this. I agree, a terrible oversite but a fact.

[renterbob]

Renterbob you must stop giving out this incorrect information otherwise there are people going to be going to county court trying to sue (costing £150 by the way) when there deposit is protected and the prescribed information supplied, on the basis that it wasnt done within 14 days. The wording of the act that govens TDS claims is quite clear that there are only two instances when you can take your landlord/Agent to court (1) the deposit isnt protected or (2) the prescribed information hasnt been supplied. If the deposit is protected and the prescribed information supplied after 14 days, but before any court hearing - THEN YOU CANNOT CLAIM, there are no provisions in TDS legislation to allow this. I agree, a terrible oversite but a fact.

Your interpretation is wishful thinking

If your landlord or agent has not protected your deposit, they will be ordered to repay three times the amount of the deposit to you.

Does not mean the LL can protect the deposit the day before court and then get off.

I could rob a bank, then get caught, earn interest for year, then go to court and give all the money back the day before the court hearing and get off free? Don't be stupid Planner!

Anyone with half a brain will get 3X deposit and loss of earnings when dealing with a judge in such circumstances.