TDS non compliance action – tenancy ended action started but deposit now protected

Dear members,

Having read many posts on this and similar forums I in agreement with and on the behalf of my 3 ex-housemates issued a county court claim against our landlord for non protection of our deposit of £1000 (shared between four tenants) in the tenancy deposit scheme (TDS) for a short hold tenancy which was signed on October 28th 2007 and ran from November 2007 to May 2008.

If I can explain briefly the circumstances of our entering the property and
signing the tenancy agreement/contract:

The original tenant moved in in early summer 2007 but did not sign our joint tenancy agreement until the end of October 2008. The other 3 tenants who jointly signed that contract moved in closer to the signing date and up until that point we lived there for varying amounts of time on a kind of ‘rolling’ basis, paying rent and having paid our deposits to the respective outgoing tenants of our respective bedrooms who in exchange handed us the keys. The final of these outgoing tenants was present when the deposits that the letting agent (and landlord/owner of the property) were signed over from his (and one other person) to our names as stated in our new, joint short hold tenancy agreement.

Some way into our tenancy I was informed by the office lady that our deposit had been transferred and the landlord (LL) had not received it in cash at the time of signing and therefore the deposit would not be protected in the TDS because the original deposits were received prior to its coming into being (which I do not now thing is even true).
Upon exiting the property the LL informed us (via his office lady) that he would be withholding just under half of the deposit on the basis that he claimed we had left the property late, and the need for a professional clean.

Having issued several letters before court to request repayment or evidence as to why the deposit was being withheld I eventually filed on 31st July 2008 via MONEYCLAIM ONLINE a case claiming £4100 with the description “Deposit owed by Landlord” worded as follows:

On Oct 26th 2007, the Claimant and fellow tenants, jointly signed a new assured shorthold tenancy agreement with the defendant’s agency, xxx, for xxx from Nov.1st 2007.

A deposit of £1000 was transferred from the previous tenants to us. Subsequent dispute determined the landlord did not comply with the initial requirements of section 214(1)(a) of the Housing Act 2004 stating that deposits must be paid into a tenancy deposit scheme (section 213(1) of the Housing Act 2004) within 14 days of the Defendant's receipt of the deposit (section 213(3) of the Housing Act 2004). We ask that the court make an order:

1. That the person who appears to the court to be holding the deposit do repay it to the Claimant, in accordance with section 214(3) of the Housing Act 2004. 2. That the Defendant pay the Claimant, within 14 days of making of the order, a sum of money equal to 3 times the amount of the deposit, in accordance with section 214(4) of the Housing Act 2004.
This was initially met with a defence which stated our action would be partially defended but then subsequently changed to dispute the whole amount claimed in addition to a counterclaim for further damages to property and furniture and rent arrears which had been previously threatened in telephone communications (which I recorded) amounting to £2500. The case was then transferred to the local court for continuation with a 10th December 2008 deadline for witnesses and evidence and the hearing on 8th January 2009.

We have recently learned that just days prior to filing this defence and counterclaim, the LL belatedly registered our deposit with Tenancy Deposit Solutions (now trading as mydeposits) on 3rd September 2008 despite our leaving the property 3 months previous. We have been advised by mydeposits that our deposit has been inserted in “an insurance based protection scheme” whereby mydeposits do not hold onto the deposit amount, this remains with the landlord.

Our queries and concerns are as follows:

1 Given that we have only today found out that our deposit was belatedly installed in a scheme, should we apply for the release of the deposit that way or continue to pursue our deposit as well as the penalty for non-compliance?

2 Also as regards the timing of our case, it will be heard long after the deposit should have been put into TDS and long after we have vacated the property. But the subsequent dispute over the deposit stems from the fact no TDS was used only until our TDS-non compliance case was filed. Is this fact, that tenancy has ended, likely to count against us in the judge’s ruling?
The LL’s defence is premised on the fact that as tenants our deposits were transferred from the previous tenants and no new cash deposit was received from the new tenants. Despite this the LL acknowledges he subsequently put the deposit into a protection scheme but illegitimately claims we were are aware of this and of this they have proof.
Is this subsequent protection of the deposit likely to count against our action?

3 Given that the counterclaim made by the LL is no more than an attempt to intimidate us out of pursuing our TDS non-compliance case, could it be found to be illegal on those grounds?
Or would it be merely dismissed? Are there precedents for illegality of counterclaims than anyone knows of?
In the small chance that the (illegitimate) counterclaim for damages and unpaid rent is upheld how would this affect our TDS non-compliance action?
To what degree do such counterclaims have to have bearing on original action/claims?
These counterclaims for damages are in spite of there being no inventory or statement of condition co-signed by LL and tenants. How might these claims stand up in front of a judge without evidence?

4 In defending ourselves against the counterclaim for damages and cleaning, would it be wise to try to gather witnesses to testify the property was not in a clean condition (though rentable as it was eventually left) and damages were already present?

5 How would a four person jointly signed tenancy/contract and a collective deposit be affected by the fact one of the co-signers is willing and may well deal with the LL and claim some of the collective deposit prior to our TDS non-compliance small claim action being heard?
The LL has made great efforts to try to reach individual tenants at various times with the purpose of splitting up our group and making various offers to all of us at various times.

6 To what degree should we try to describe the above manipulation, lies, dirty tricks, procrastination, fabrication, threats and intimidation (of added damages being withheld), emotional pressure on tenants that the LL has engaged in? In our opinion he has repeatedly flagrantly flouted the law and rules on doing business but should we try to demonstrate this to the judge or concentrate on less personal matters?
The counterclaim for additional withholding of money to cover other damages unless we agreed to the initial withholdings was threatened various similar threats and deadlines were made after we disputed them and requested evidence of the professional clean, damages and unpaid rent. These have since appeared in the counterclaim. Indeed we believe the professional clean was fabricated by the LL, so to what degree and how might we present this belief?

7 The initial claim we registered online was for £4100: deposit plus 3 times it plus £100 costs. However since then we have realized that other costs have been involved and we might also have claimed interest on the £4100 or maybe just the £1000 deposit. Would it now be too late or might it appear unseemly to claim these amounts as well?
Apologies for the length of this but I have tried to cover everything so no added questions or amendments are needed.

Sincere thanks in advance for any time and advice offered.