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    • mb124
    • By mb124 11th Sep 17, 6:20 PM
    • 6Posts
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    mb124
    Legal query for withholding deposit
    • #1
    • 11th Sep 17, 6:20 PM
    Legal query for withholding deposit 11th Sep 17 at 6:20 PM
    Hi all,

    Am trying to gain some advice regarding my current situation and hope someone can help!

    I was living in a rented property with a flatmate but I decided to move out, whilst my flatmate has opted to stay in the property.

    He has been back and forth with the letting agents regarding the renewal of his tenancy (refusing to pay referencing fees as they tried to make him start a new one) and this has been agreed. With no inspection of the property, the agreement is to be renewed in his name.

    He has yet to sign the agreement as he has a dispute with the landlord regarding the removal of a tatty old sofa which the landlord allowed me to remove, but unfortunately due to losing my phone a while ago, I lost the text to confirm.

    It was agreed by the agents that he would cover my half of the deposit and renew the contract. He paid this money to the letting agents a few weeks ago and they have held it to set a new deposit up. The landlord is being very evasive, has not called him, myself or the letting agents back.

    I have been out of the property since the 1st and now in a new property. I agreed for the DPS to pay the deposit back to the agents so the money has been paid to their account and is now sat in their account for the half of the full deposit to be paid (which my flatmate has already paid to cover).

    I called the letting agents today to be told that my money will not be paid to me as 'by law' they were unable to pay this back until the issues over the new tenancy agreement were resolved and the new deposit set up and agreement signed.

    They also told me that they did not manage the property, it was down to me to resolve the issues between tenant and landlord before they could give my deposit back. I was baffled by this as they have my money! Not the landlord!

    I called the DPS who advised that they could not do anything as the funds had been released to the agents, but agreed that the situation did not sound correct and that the dispute between landlord and tenant should not have any bearing on paying my deposit.

    Please could someone clarify if there is any legislation in place for the agents to legal withhold my deposit from me? I have a receipt from the DPS confirming the deposit has been paid back, and also confirmation of the acceptance of my notice. I spoke to a solicitor who whilst not an expert in the field, had no knowledge of any legal reason to withhold it. They are effectively holding on to more money than they should as they have my money and the additional paid by my flatmate to cover.

    They also said that until this tenancy was signed, I was still liable and the existing tenancy agreement still stood. But due to the stalemate between landlord and current tenancy, I'm caught in the middle.

    Please can someone shed some light on whether they are legally able to withhold this money from me? Thanks in advance.
Page 1
    • G_M
    • By G_M 11th Sep 17, 6:30 PM
    • 41,081 Posts
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    G_M
    • #2
    • 11th Sep 17, 6:30 PM
    • #2
    • 11th Sep 17, 6:30 PM
    Your tenancy
    1) a 'joint and several' tenancy agreement in bth names?
    2) start date?
    3) Term or end date?
    4) or periodic?
    5) did you serve notice to end the tenancy?
    6) date? and how?
    7) date notice expires?

    end of tenancy
    8) when the current tenancy ends, the full deposit should be returned by the LL/agent, less any agreed deductions, and the scheme registration closed. This is NOT dependant on the new tenancy (which is separate), though there may be an ongoing dispute about the amount to be returned (eg regarding the sofa).
    9) your flat mate should NOT transfer 'deposit' cash to you - the LL/agent should
    10 if the deposit is not returned, for whatever reason (unless because of deductios you agree with) you should raise a dispute with the scheme

    New tenancy
    11) when your flatmate signs a new tenncy in hs name, he should pay a new deposit which should be regitered in his name (though this is nothing to do with you
    Last edited by G_M; 11-09-2017 at 6:42 PM.
    • mb124
    • By mb124 11th Sep 17, 6:59 PM
    • 6 Posts
    • 0 Thanks
    mb124
    • #3
    • 11th Sep 17, 6:59 PM
    • #3
    • 11th Sep 17, 6:59 PM
    Your tenancy
    1) a 'joint and several' tenancy agreement in bth names? Joint tenancy
    2) start date? Feb 14
    3) Term or end date? 6 months - rolling contract after
    4) or periodic? see above
    5) did you serve notice to end the tenancy? Yes. 1 month in advance (end of July)
    6) date? and how? Via email, in writing.
    7) date notice expires? Notice was to vacate on 1st September.

    end of tenancy
    8) when the current tenancy ends, the full deposit should be returned by the LL/agent, less any agreed deductions, and the scheme registration closed. This is NOT dependant on the new tenancy (which is separate), though there may be an ongoing dispute about the amount to be returned (eg regarding the sofa). - The dispute regarding the sofa is irrelevant to this deposit. The deposit was repaid to the agents in full via DPS. Receipt received for this on 24th August with the reference number. The DPS have told me the reason it was paid to them.

    9) your flat mate should NOT transfer 'deposit' cash to you - the LL/agent should - correct, sorry this was originally what they told us and then changed their story, saying it was first the DPS who paid me, then said it was the agency who were now holding my money to pay..

    10 if the deposit is not returned, for whatever reason (unless because of deductios you agree with) you should raise a dispute with the scheme. The issue with this is the scheme have paid the deposit to the letting agents, not released to me. They have told me they can not be involved.

    New tenancy
    11) when your flatmate signs a new tenncy in hs name, he should pay a new deposit which should be regitered in his name (though this is nothing to do with you). Agreed. He has paid the deposit to them ( I believe to to cover my share to be repaid to me), so they are not only holding the full deposit, but a further half of the original amount, as my flatmate has paid his share.

    Hope this helps. Thanks.
    • G_M
    • By G_M 11th Sep 17, 7:36 PM
    • 41,081 Posts
    • 47,195 Thanks
    G_M
    • #4
    • 11th Sep 17, 7:36 PM
    • #4
    • 11th Sep 17, 7:36 PM
    Your tenancy
    1) a 'joint and several' tenancy agreement in bth names? Joint tenancy
    2) start date? Feb 14 Is that 14th of feb 2017 or some vague date in Feb 2014?
    3) Term or end date? 6 months - rolling contract after
    4) or periodic? see above Is rent paid monthly?
    5) did you serve notice to end the tenancy? Yes. 1 month in advance (end of July) So 31st July 2017?
    6) date? and how? Via email, in writing. Does the tenancy agreement specify email for serving notice?
    7) date notice expires? Notice was to vacate on 1st September. See Question 2) above! This may be mid period so invalid.

    end of tenancy
    8) when the current tenancy ends, the full deposit should be returned by the LL/agent, less any agreed deductions, and the scheme registration closed. This is NOT dependant on the new tenancy (which is separate), though there may be an ongoing dispute about the amount to be returned (eg regarding the sofa). - The dispute regarding the sofa is irrelevant to this deposit. The deposit was repaid to the agents in full via DPS. Receipt received for this on 24th August with the reference number. The DPS have told me the reason it was paid to them.
    Then if both LL and tenant have authorised release of full deposit, & it has been released, that deposit should have been paid to the (joint) tenants. Not sure why it was paid to the landlord.......???

    Letter Before Action then court claim

    9) your flat mate should NOT transfer 'deposit' cash to you - the LL/agent should - correct, sorry this was originally what they told us and then changed their story, saying it was first the DPS who paid me, then said it was the agency who were now holding my money to pay..
    Ah - was he deposit held in an insurance scheme by the LL? Please confirm the scheme used.

    10 if the deposit is not returned, for whatever reason (unless because of deductions you agree with) you should raise a dispute with the scheme. The issue with this is the scheme have paid the deposit to the letting agents, not released to me. They have told me they can not be involved.
    This makes no sense. Either
    1) the deposit was held by the LL/agent, and registerd in an insurance scheme. In that case, the scheme cannot have 'paid it to the letting agents'. or
    2) depositt was held by the deposit scheme, in which case it would have been paid by them to you, not the letting agents

    Something else has happened here.........

    New tenancy
    11) when your flatmate signs a new tenncy in hs name, he should pay a new deposit which should be regitered in his name (though this is nothing to do with you). Agreed. He has paid the deposit to them ( I believe to to cover my share to be repaid to me), so they are not only holding the full deposit, but a further half of the original amount, as my flatmate has paid his share.

    Hope this helps. Thanks
    .
    Originally posted by mb124
    You need to cclarify what exactl as happened and why the agent has the deposit. Your next step depends on that.

    (note - if you reply via 'quote' and imbed your answers, please use a new colour, or underline! Makes picking out your answers easier....)
    Last edited by G_M; 11-09-2017 at 7:39 PM.
    • mb124
    • By mb124 11th Sep 17, 8:43 PM
    • 6 Posts
    • 0 Thanks
    mb124
    • #5
    • 11th Sep 17, 8:43 PM
    • #5
    • 11th Sep 17, 8:43 PM
    Sorry, will try again!

    Originally Posted by mb124 View Post
    Your tenancy
    1) a 'joint and several' tenancy agreement in bth names? Joint tenancy
    2) start date? Feb 14 Is that 14th of feb 2017 or some vague date in Feb 2014? 23rd Feb 2014


    3) Term or end date? 6 months - rolling contract after
    4) or periodic? see above Is rent paid monthly? Paid monthly
    5) did you serve notice to end the tenancy? Yes. 1 month in advance (end of July) So 31st July 2017? Correct - 31st July 2017
    6) date? and how? Via email, in writing. Does the tenancy agreement specify email for serving notice? So not believe so, but the letting agent told me this was acceptable.
    7) date notice expires? Notice was to vacate on 1st September. See Question 2) above! This may be mid period so invalid. As the tenancy was from 2014 on a rolling contract following the initial 6 months, it is not mid period.

    end of tenancy
    8) when the current tenancy ends, the full deposit should be returned by the LL/agent, less any agreed deductions, and the scheme registration closed. This is NOT dependant on the new tenancy (which is separate), though there may be an ongoing dispute about the amount to be returned (eg regarding the sofa). - The dispute regarding the sofa is irrelevant to this deposit. The deposit was repaid to the agents in full via DPS. Receipt received for this on 24th August with the reference number. The DPS have told me the reason it was paid to them.
    Then if both LL and tenant have authorised release of full deposit, & it has been released, that deposit should have been paid to the (joint) tenants. Not sure why it was paid to the landlord.......??? Letter Before Action then court claim It hasn't been paid to the landlord, it was paid back to the letting agent. Who have retained the whole deposit amount. This was paid for by the DPS



    9) your flat mate should NOT transfer 'deposit' cash to you - the LL/agent should - correct, sorry this was originally what they told us and then changed their story, saying it was first the DPS who paid me, then said it was the agency who were now holding my money to pay..
    Ah - was he deposit held in an insurance scheme by the LL? Please confirm the scheme used. I believe it is custodial - not 100% if this is what you mean but that is my best guess!

    10 if the deposit is not returned, for whatever reason (unless because of deductions you agree with) you should raise a dispute with the scheme. The issue with this is the scheme have paid the deposit to the letting agents, not released to me. They have told me they can not be involved.
    This makes no sense. Either
    1) the deposit was held by the LL/agent, and registerd in an insurance scheme. In that case, the scheme cannot have 'paid it to the letting agents'. or
    2) depositt was held by the deposit scheme, in which case it would have been paid by them to you, not the letting agents

    Something else has happened here.........
    Deposit was held by the Deposit Protection Service - I was requested to authorise the repayment to release the deposit, however the deposit was released to the agent/landlord, rather than me. I understood this was the case and called them to check that this was correct. They said it was and I just had to authorise. So the full amount of deposit was paid to the letting agents bank account (they have confirmed they have received this). They have then told me they will not release these funds until the new tenancy agreement is signed and a new deposit is set up on the property. They will not set this up and repay my share of the deposit, until my flatmate has signed the new agreement.

    New tenancy
    11) when your flatmate signs a new tenncy in hs name, he should pay a new deposit which should be regitered in his name (though this is nothing to do with you). Agreed. He has paid the deposit to them ( I believe to to cover my share to be repaid to me), so they are not only holding the full deposit, but a further half of the original amount, as my flatmate has paid his share.

    Hope this helps. Thanks.

    You need to cclarify what exactl as happened and why the agent has the deposit. Your next step depends on that.

    (note - if you reply via 'quote' and imbed your answers, please use a new colour, or underline! Makes picking out your answers easier....)
    Originally posted by G_M

    Hope that clears it up. They have the deposit as they requested it be released to them, not me. They would then release half of the amount (£355 out of £710) once the new tenancy agreement is signed. I have been told by them that they lawfully can not release is. Which I am not buying. Sorry about the green text by the way. It's been ages since used this formatting!
    • G_M
    • By G_M 11th Sep 17, 10:27 PM
    • 41,081 Posts
    • 47,195 Thanks
    G_M
    • #6
    • 11th Sep 17, 10:27 PM
    • #6
    • 11th Sep 17, 10:27 PM
    1) Your notice.
    This is potentially a problem.
    * your tenancy started on 23/2/14, and is now monthly periodic
    * so your tenancy periods run from 23rd to 22nd of each month
    * so your notice served on 31st July should expire on 22nd September (1 full period)
    * if you left on 1st Sept, that is mid-period - you can only end the tenancy at the end of a monthly period

    So one potential reason for witholding your deposit is that you have not given proper notice and owe rent till 22nd Sept.

    However, you do not say that this is what they are claiming.

    2) deposit release.
    * That's not how the DPS custodial scheme Joint Repayment Process works.
    If both the tenant, and landlord, inform the scheme that the deposit is to be released without deductions, it is released to the tenant. (see links and quote below)

    * DPS run a custodial scheme AND an insurance scheme. You should have received the 'Prescribed Information' at the start of the tenancy. Which scheme was used?

    * if it was the custodial scheme, then the only reason for payment being made to the LL/agent would be if there were agreed deductions and you authorised release to the LL/agent.

    * if it was the insurance scheme, then the LL/agent would already hold the money but you could raise a dispute with the scheme.

    * The DPS terms and conditions say:

    20. Paper Joint Repayment Forms
    a. The completion of a Joint Custodial Deposit Repayment Form can be initiated by either the Landlord or the Tenant.
    b. If there is a Dispute, the Landlord and Tenant will be able to reconfirm online a breakdown of the total amount in dispute which the Landlord and Tenant believes is due to be paid to him or her. Alternatively, the Landlord and the Tenant may confirm on the paper Joint Custodial Deposit Repayment Form the total amount which is in Dispute. The Parties will also both be required to
    confirm online or on paper that:

    • they each agree that the Dispute be referred to Adjudication in accordance with these Terms and Conditions; and
    • they will be bound by the Decision of the Adjudicator.

    c. A failure to provide The DPS with any of the above information will result in the Joint Custodial Deposit Repayment Form being rejected and referred back to the initiating party for resolution.

    d. Repayment of all or part of the Deposit will be made either via direct BACS transfer to the Landlord’s and/ or Tenant(s)’ accounts, sterling cheque or a combination of the two methods in accordance with the Joint Custodial Deposit Repayment Form. Cheques can be made payable to either The Landlord/Agent,
    the named Tenant(s) or a nominated third party, where authorised. Payment can also be made into overseas bank accounts for a fee of £25.89.
    I suspect you were asked to authorise repayment of the deposit to the LL/agent, and signed your agreement......
    Last edited by G_M; 11-09-2017 at 10:33 PM.
    • saajan_12
    • By saajan_12 12th Sep 17, 8:58 AM
    • 769 Posts
    • 509 Thanks
    saajan_12
    • #7
    • 12th Sep 17, 8:58 AM
    • #7
    • 12th Sep 17, 8:58 AM
    Sounds like a few things haven't been done properly re
    * notice: unless there's a clause to the contrary in the last tenancy agreement, tenant's notice should be in line with tenancy periods so end on 22nd of a month giving a full period notice
    * deposit from DPS should be released to the tenant(s) if no deductions, and then the new tenant (OP's flatmate) pays a new deposit which is separately registered with DPS.
    * irrelevant complications of old & new tenancy and whether you deal with the LL or agent.. it makes no difference to you, the agent is the LL's representative.

    However at this point, it is largely academic. The DPS will be unlikely to help as it sounds like you agreed for the deposit to be released to the LL/agent. Practically I would

    1-> find / get written confirmation from the LL/agent that there are no deductions and you should receive £355 from the deposit from them.

    2-> Write a letter before action requesting the money within 10 days or you will go proceed to small claims court.

    3-> If no money forthcoming, file a Money Claim Online.
    • mb124
    • By mb124 12th Sep 17, 8:25 PM
    • 6 Posts
    • 0 Thanks
    mb124
    • #8
    • 12th Sep 17, 8:25 PM
    • #8
    • 12th Sep 17, 8:25 PM
    1) Your notice.
    This is potentially a problem.
    * your tenancy started on 23/2/14, and is now monthly periodic
    * so your tenancy periods run from 23rd to 22nd of each month
    * so your notice served on 31st July should expire on 22nd September (1 full period)
    * if you left on 1st Sept, that is mid-period - you can only end the tenancy at the end of a monthly period

    So one potential reason for witholding your deposit is that you have not given proper notice and owe rent till 22nd Sept.

    However, you do not say that this is what they are claiming.

    This should not be of relevance really, as even if I was to see my tenancy truly expire 22nd Sept, the rent has still been paid in advance (paid on 21st August), as it now being paid by my flatmate. I see your point but I do not see there being any change in the situation and their stance even when the 22nd September arrives.

    2) deposit release.
    * That's not how the DPS works.
    If both the tenant, and landlord, inform the scheme that the deposit is to be released without deductions, it is released to the tenant. (see links and quote below)

    * DPS run a custodial scheme AND an insurance scheme. You should have received the 'Prescribed Information' at the start of the tenancy. Which scheme was used?

    * if it was the custodial scheme, then the only reason for payment being made to the LL/agent would be if there were agreed deductions and you authorised release to the LL/agent.

    * if it was the insurance scheme, then the LL/agent would already hold the money but you could raise a dispute with the scheme.


    Correct - this was badly explained to me from the beginning with the letting agent changing their mind over the way the deposit would be repaid several times after handing my notice in. My flatmate dealt with this originally. So what I authorised was for the letting agent to take the deposit to their account, and then repay me once this was received. I was only told that they would not be paying this to me until the new tenancy agreement issue was resolved AFTER I had authorised the deposit repayment. This leads me back to my original query... do the letting agents have any right to withhold this from me? The £415 (cover of my £355 to be repaid and an addition £60 administration fee) was paid by my flatmate to the letting agent on 31st July. So they have held on to this as well.



    Sounds like a few things haven't been done properly re
    * notice: unless there's a clause to the contrary in the last tenancy agreement, tenant's notice should be in line with tenancy periods so end on 22nd of a month giving a full period notice
    * deposit from DPS should be released to the tenant(s) if no deductions, and then the new tenant (OP's flatmate) pays a new deposit which is separately registered with DPS.
    * irrelevant complications of old & new tenancy and whether you deal with the LL or agent.. it makes no difference to you, the agent is the LL's representative.

    However at this point, it is largely academic. The DPS will be unlikely to help as it sounds like you agreed for the deposit to be released to the LL/agent. Practically I would

    1-> find / get written confirmation from the LL/agent that there are no deductions and you should receive £355 from the deposit from them.

    2-> Write a letter before action requesting the money within 10 days or you will go proceed to small claims court.

    3-> If no money forthcoming, file a Money Claim Online.
    Thanks for the response. Correct on many counts, as stated previously, I don't believe the tenancy expiration on 22nd to be an issue as the rent is being paid. It should have been released to me, but they made it sound very seamless and have now moved the goalposts on the situation. Hence the situation I'm now in.

    I have contacted the letting agents requesting the following:

    1. Is the £355 deposit to be released to me without any further deduction following its release by the DPS on 24th August.
    2. What are the specific legal reasons they have specified to withhold my deposit.
    3. Was my notice officially accepted from the email I send confirming my intention to depart the property on 31st August. Letter in email was sent on 27th July.

    Unsurprisingly, I haven't had a response. So if I do not receive a response to point 1 you have made, can I proceed to point 2?


    Cheers.
    • G_M
    • By G_M 12th Sep 17, 10:13 PM
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    G_M
    • #9
    • 12th Sep 17, 10:13 PM
    • #9
    • 12th Sep 17, 10:13 PM
    Stop emailing. Write a letter. Address it to your landlord (he is responsible for the deposit, the agents just act on his behalf). Send it to him at the address provided 'for serving notices' on him. Send a copy to the agents.

    as saajan says, head it 'Letter Before Action'.

    I would not ask questions. Tell the LL (not ask) to return the deposit withing (7?) days or legal action will follow.
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