Tenant taking me to court - TDS - will I be ok?

ConfusedLandlord09

Hello,
I currently have a claim against me by a tenant who moved out in October of last year. I never protected the deposit but now realise that I probably should have. I have now protected the deposit for my new tanant. I returned the full deposit less some deductions that I thought were reasonable, 1 month after the termination of tenancy. The tenant wasnt happy with this and so lodged a claim for the 3x deposit fine. After I received this claim I then returned the remainder of the deposit, but admittedly this was 5 months after the tenant moved out. It's now going to court. I've returned the full deposit so I should be ok? The tenant hasnt had any financial loss out of this, so whats the big deal right?
Thanks to all.

teeni

The big deal is you chose to break the law. Did you know you should deposit it in a scheme, did you have good reason for not complying with the law. 2004 housing act states that failure to protect deposit is punishable by fine of three times the deposit various different results at court but all the ones i have dealt with have resulted in the fine being awarded when the tenant had already left the property. i am aware that others have not where the deposit was eventually placed in a scheme before proceedings started so I suppose it depends on the interpretation of the judge on the day.
Be prepared for it to go against you,will you be in a position to pay the fine within the requisite time given by the court if the tenant wins? if you win breath a sigh of relief and learn from it.

good luck

pawpurrs

Im afraid that you broke the law by not protecting the deposit, so although you have now returned the deposit in full, allbeit mths later, you can and prob will be fined for this.
I expect the tennant was peed off with the deductions that you made and when he/she found out that it wasnt protected they had no recourse, so have taken this action. Unfortunetly for you the law isnt on your side.

kyle82

try to negotiate with the tenant. yes, the law may not be on your side... but in a good approach, the tenant might pull the case back. But if the tenant has all the reason why he shouldn't sue you.. you just have to face the consequences.. :rotfl:

N79

At the very least you need to offer to pay the T's legal and court costs plus some compensation in return for pulling the court case - otherwise they are out of pocket. Obviously this will be a without prejudice offer.

If it goes to court it will depend on the judge you get and your argument about whether the 3x penalty can be applied in this case (you need to know s212, 213, 214 and 215 of the housing act backwards if you are going to make this argument). Even if you "win" this argument you will still lose the case and have to pay the T's court costs.

Based on a personal knowledge of cases, with a good argument you have a better than evens chance of avoiding the penalty. So figure out how much you are prepared to bribe the T in order to avoid trying your luck in court.

D

Enfieldian

Yes,

ConfusedAmateurLandlord09, it is no longer up to you to make "reasonable deductions" from a deposit. Not since April 2007.

As for "probably" & "should", with regard to protecting the deposit, the law is quite clear on what conditions and dates apply

Serious/Professional LLs are/were well aware of the legislation.

You could, quite rightly, face a fine of up to 3X the original deposit amount.

PasturesNew

Can you be 100% sure that you are up to date legally for your new tenant? What if there are other laws you aren't aware of (bound to be).

tbs624

ConfusedLandlord09 wrote: »

Hello,
I currently have a claim against me by a tenant who moved out in October of last year. I never protected the deposit but now realise that I probably should have..

Probably?? No, categorically should have, but then you know that.

ConfusedLandlord09 wrote: »

I have now protected the deposit for my new tanant.

Have you also given this new T a copy of the deposit scheme's "prescribed info"? That's a separate requirement under tenancy deposit regs - if you haven't , get it done pronto.

ConfusedLandlord09 wrote: »

I returned the full deposit less some deductions that I thought were reasonable, 1 month after the termination of tenancy.

No LL should ever think that they can simply make a unilateral decision on what gets deducted - it has to be agreed. This sort of thing is what the deposit regs were supposed to address. Did you have an inventory check-in and out? Did you give the T your reasons in writing and give him/her the opportunity to respond?

ConfusedLandlord09 wrote: »

The tenant wasnt happy with this and so lodged a claim for the 3x deposit fine. ..

It's not a *fine* - it's a penalty payment ( see N79's post) made by the LL to the T, if ordered by the court. Not a criminal action - this is civil law.

ConfusedLandlord09 wrote: »

After I received this claim I then returned the remainder of the deposit, but admittedly this was 5 months after the tenant moved out. It's now going to court. I've returned the full deposit so I should be ok? The tenant hasnt had any financial loss out of this, so whats the big deal right?
Thanks to all.

You *may* get away without being ordered to pay that penalty, depending on which judge you get - cases so far have had mixed results. You say that the T hasn't had any financial loss but your failure to comply with the law has delayed the return of his/her tenancy deposit in full by an additional 4 and a half months. Many Ts actually *need* their deposit money for their next property. His/her expenditure on stamps, phone calls, poss legal advice, not to mention their personal stress?

You''ll probably be fed up that the majority of posts on the thread will offer little sympathy , but the reality is that you would have had to have been hiding out in a cave somewhere for the last couple of years to have not known about tenancy deposit regs. Providers of LL insurance sent out leaflets to their customers, it was heavily promoted via the press, TV etc...type the single word Landlord into google and up pop a multitude of sites providing relevant info.

Join a LL Association: you'll be able to set membership fees against rental income for HMRC purposes and you can get access to the advice that you clearly need on what is involved with letting out property.You may alternatively want to take a look at Shepperson's LandlordLaw site and/or have a look at the forum on Landlordzone.

Your best bet is probably to take N79's advice and try to meet your tenant half way.

Alex_LS

Does a deposit taken before April 2007 need to be protected? May not be relevant in this case anyway.

00ec25

as has been said in many previous threads what matters is if a new tenancy has been created after April 2007 because that starts the clock ticking again and you have to protect from that date, not the date the deposit was physically paid.

in a nutshell:

Scenario: deposit taken before April 2007. AST signed before Aptil 2007

Outcomes:
a) at end of fixed term period of AST if tenancy goes on to periodic basis the original deposit does NOT have to be protected as no NEW tenancy has been created

b) at end of fixed term for original pre April 2007 AST, the tenant is issued with a new AST without paying a new deposit then the original deposit taken before April 2007 must now be registered

Can I respectfully suggest you really ought to get up to speed if you are renting out properties
http://www.rla.org.uk/landlord/tenancy_deposits/tds-FAQ.shtml#11

Enfieldian

Methinks this was a troll post anyway. Trying to stir up the reaction that he got......

Probably posted by someone who has had the above done to them by their LL and is hoping that the LL will come here looking for advice, see a post that is exactly the same is their scenario and panic.

Good idea really, I hope my LL sees it too.......