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Longtermrenter

Landlord Has Returned Unprotected Deposit, What Next?

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Hi all, I have, I think, mentioned before that our landlord did not protect our deposit. I wasn't too worried about this as it gave us a certain security of tenure - that is they couldn't evict us in that scenario, not with a Section 21 notice anyway.

Our landlord has now actually realized that they didn't protect the deposit, has told us they don't now want to as it is too onerous and has sent us a cheque for the deposit.

Now I know I could probably take them to court and charge statutory interest on the deposit and try and get compensation for it not being protected but we want to stay living there. I also want to be able to use this as leverage in case of any further trouble in the future or if they try and evict us. Could we for example still make a claim on this in a couple of years time, I'd rather keep quiet about it now. Anyone with any similar experiences? I'd be glad to know people's thought son this.

The funniest bit in their letter is where they mention the deposit protection as "new rules". 9 years old the requirement this year!

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Sounds like a win win to me. If he wants to evict you he eventually will and you can sleep easy that he won't be taking any (or all) of your deposit. What's the alternative? You give it back and insist he protects it?

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I think you're being a bit daft to be honest. If you are renting a place and the landlord has no deposit you are in quite a powerful position. Why are you so keen to attack?

Remember the objective is to rent somewhere at a fair price without getting screwed over, not to screw over every landlord in any way you can.

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Hi all, I have, I think, mentioned before that our landlord did not protect our deposit. I wasn't too worried about this as it gave us a certain security of tenure - that is they couldn't evict us in that scenario, not with a Section 21 notice anyway.

Our landlord has now actually realized that they didn't protect the deposit, has told us they don't now want to as it is too onerous and has sent us a cheque for the deposit.

Now I know I could probably take them to court and charge statutory interest on the deposit and try and get compensation for it not being protected but we want to stay living there. I also want to be able to use this as leverage in case of any further trouble in the future or if they try and evict us. Could we for example still make a claim on this in a couple of years time, I'd rather keep quiet about it now. Anyone with any similar experiences? I'd be glad to know people's thought son this.

The funniest bit in their letter is where they mention the deposit protection as "new rules". 9 years old the requirement this year!

Landlord has a right to ask you to vacate a property, that is why it is called renting. I would just keep the deposit and be happy that he must trust you not to damage anything, and also keep an eye on the local market and be in touch with some other landlords/agents in case you are asked to move. Maybe he is going to sell and is smoothing the way to get you out?

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I would guess the LL has just discovered the downside for them not protecting the deposit ,they could well be thinking of selling and have realised the strength of the OP`s position (i.e i could cost the LL far more money and time to serve notice ) sending back the deposit and the OP accepting it would mitigate those problems

Rip up the check would be the answer to the above and deny receiving it ,if they are going to sell there could be a bit of a profit to be made if you are that way inclined

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I think you're being a bit daft to be honest. If you are renting a place and the landlord has no deposit you are in quite a powerful position. Why are you so keen to attack?

Remember the objective is to rent somewhere at a fair price without getting screwed over, not to screw over every landlord in any way you can.

Totally agree with this, much as many landlords are a right pain in the **** if you have got a decent place and all the leverage PLUS the ability to move out whenever you want with no risk of losing your deposit, I'd say just be happy with that

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I agree, there is no point in making trouble where there is none, however I would be suspicious as to what else wasn't done, especially considering that deposit protection in England has been in place for so long. Sloppy practice indicates more sloppiness.

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Thank's for all the replies.

We have a broken septic tank which costs us more, they want to put the rent up every year yet we have mould, damp problems. We don't want to move unless we really have to though due to cost of moving and kids schools etc. I'm just looking at having the strongest hand when I try to get them to remedy some of these problems in case they decide to do a revenge eviction. I'm not trying to get anything off of them for the sake of it. Just wondered if anyone else had a similar experience. They most certainly are extremely sloppy - the tenancy agreement is full of puff and little substance. They haven't been that helpful with problems either, i.e. they tend to look on us like we should be fixing stuff that breaks.

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You're in a good position having had your deposit back. If you want repairs done follow a different route bit there's no gain from going after this. You suffered no loss and were not disadvantaged by the deposit not being protected so what will your claim be based on? Emotion damage??

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You're in a good position having had your deposit back. If you want repairs done follow a different route bit there's no gain from going after this. You suffered no loss and were not disadvantaged by the deposit not being protected so what will your claim be based on? Emotion damage??

No, it would be based on the fact they broke the law and took my money and kept it for over two years. Law says you can have compensation, I'm just trying to protect myself should they turn up and strong arm us and the kids as some point going on the fact they don't seem to be able to follow procedure. Bargaining power for next rent increase too.

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No, it would be based on the fact they broke the law and took my money and kept it for over two years. Law says you can have compensation,

Compensation is to recompense you for the losses you have suffered. What loss have you suffered? You're not out of pocket in any way.

If the house is in as poor a condition as you say why don't you look for somewhere better to live. Can you not find somewhere suitable in near proximity?

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Doesn't returning the deposit in full before the tenancy ends mean that he's no longer liable for non-protection? Correct if I'm wrong, this means you have no claim to compensation. If however the tenancy had ended before he returned the deposit, it would be a very different matter.

Edited by spacedin

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It costs a lot to move, landlords have power in regards to references etc. It's not do simple.

Not that much in the grand scheme of things though is it? My son has just moved, he rented a van for 4 days, I helped for 2 days and friends of his helped out on the other days. The cost was about £200 for van hire and a few packs of beer for his friends.

If you can find a new rental without going through an agency and contact the landlord direct you can avoid agents fees. I always used to advertise privately and only used letting agents when I first started renting.

Is there any reason your present landlord would give you a poor reference?

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Compensation is to recompense you for the losses you have suffered. What loss have you suffered? You're not out of pocket in any way.

If the house is in as poor a condition as you say why don't you look for somewhere better to live. Can you not find somewhere suitable in near proximity?

It's not compensation, it's a penalty.

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It's not compensation, it's a penalty.

It's not compensation, it's a penalty.

Would you like to comment on this quote from Eversheds:

"The primary remedy for breach of contract in English Law is damages to compensate the innocent party for the losses it suffers as a consequence of the breach. Clauses designed to deter parties from breaching a contract by penalising poor performance (known as penalty clauses) are unenforceable under English law. On the other hand, clauses providing for payment of a pre-determined sum by way of compensation for a breach of contract (known as liquidated damages clauses) are generally enforceable."

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Would you like to comment on this quote from Eversheds:

"The primary remedy for breach of contract in English Law is damages to compensate the innocent party for the losses it suffers as a consequence of the breach. Clauses designed to deter parties from breaching a contract by penalising poor performance (known as penalty clauses) are unenforceable under English law. On the other hand, clauses providing for payment of a pre-determined sum by way of compensation for a breach of contract (known as liquidated damages clauses) are generally enforceable."

Not quite as clear cut now following Cavendish Square Holding BV v Talal El Makdessi (Cavendish) and********** Limited v Beavis (ParkingEye).

Penalty Clauses may be enforceable if they have a commercial purpose.

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We're going off the response I made to the poster demanding compensation for the deposit not being protected. My reply pointed out that in my opinion his demand for compensation should be restricted to any loss that he may have suffered; I couldn't see that the landlord returning his deposit because of a failure to protect the deposit would have caused his tenant any financial loss.

The deposit regulations in question allow for up to 3 times the deposit to be awarded if the deposit hasn't been protected. In no way does that represent any loss the tenant may have suffered by it not being protected. So it seems that it is a penalty, not liquidated damages. Its a long, long time since I studied law and I was never curious enough to follow the reasons why penalties could be imposed when penalties were prohibited by the general principle.

Obviously a penalty is a punishment to deter non compliance but in contract law the idea of a penalty clause – very roughly, a clause that is unenforceable because it imposes an exorbitant obligation to pay on a party that breaches a contract was a fundamental concept.

I haven't read the judgement you quoted, a comment I saw when I googled it mentioned that there was a dissenting opinion from one of the three judges.

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We're going off the response I made to the poster demanding compensation for the deposit not being protected. My reply pointed out that in my opinion his demand for compensation should be restricted to any loss that he may have suffered; I couldn't see that the landlord returning his deposit because of a failure to protect the deposit would have caused his tenant any financial loss.

The deposit regulations in question allow for up to 3 times the deposit to be awarded if the deposit hasn't been protected. In no way does that represent any loss the tenant may have suffered by it not being protected. So it seems that it is a penalty, not liquidated damages. Its a long, long time since I studied law and I was never curious enough to follow the reasons why penalties could be imposed when penalties were prohibited by the general principle.

Obviously a penalty is a punishment to deter non compliance but in contract law the idea of a penalty clause very roughly, a clause that is unenforceable because it imposes an exorbitant obligation to pay on a party that breaches a contract was a fundamental concept.

I haven't read the judgement you quoted, a comment I saw when I googled it mentioned that there was a dissenting opinion from one of the three judges.

So you admit you were wrong?

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We're going off the response I made to the poster demanding compensation for the deposit not being protected. My reply pointed out that in my opinion his demand for compensation should be restricted to any loss that he may have suffered; I couldn't see that the landlord returning his deposit because of a failure to protect the deposit would have caused his tenant any financial loss.

The deposit regulations in question allow for up to 3 times the deposit to be awarded if the deposit hasn't been protected. In no way does that represent any loss the tenant may have suffered by it not being protected. So it seems that it is a penalty, not liquidated damages. Its a long, long time since I studied law and I was never curious enough to follow the reasons why penalties could be imposed when penalties were prohibited by the general principle.

Obviously a penalty is a punishment to deter non compliance but in contract law the idea of a penalty clause – very roughly, a clause that is unenforceable because it imposes an exorbitant obligation to pay on a party that breaches a contract was a fundamental concept.

I haven't read the judgement you quoted, a comment I saw when I googled it mentioned that there was a dissenting opinion from one of the three judges.

Two points.

Firstly the penalty for not protecting the deposit is statutory rather than contractual, so the tenets of contract law would be over-ridden by the provisions of the legislation.

Secondly my (actually irrelevant) point about penalty clauses in contract law was that there seems to have been a recent significant change in judicial precedent away from the "reasonable pre-estimate of loss" test that you referred to. This is still a developing area of the law.

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I see so I was just looking at it from a contract law perspective.

The parking case astounds me though. Who would take a case to the Court of Appeal for the sake of £85? I wouldn't bother with the fast track for that, just pay it and move on however indignant I felt.

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I see so I was just looking at it from a contract law perspective.

The parking case astounds me though. Who would take a case to the Court of Appeal for the sake of £85? I wouldn't bother with the fast track for that, just pay it and move on however indignant I felt.

If I were retired and it was the middle of February I might have had a bash. My understanding is that as the point was regularly contested and appealed to the ombudsman ********** actually offered to pay the other parties costs to have the matter fully tested in court and set a precedent one way or the other. It is quite key to their business model, as I know from bitter experience having been hit for £85 for overstaying by 5 mins once.

edit: I have no idea why the asterisks have appeared

Edited by Exiled Canadian

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