Can a tenant still sue for 3xdeposit after you have used the official DPS ADR Service

Becks045

Any advice would be welcome.

To cut a long story short, a tenant moved in on an AST 6 month contract, issued with tenancy, inventory, landlord certificates and my lanlord ID and government leaflet on the DPS scheme.

After 36 hours tenant contacts me doesnt like the house anymore, not happy, wants to move out. I say ok then the tenant wants to think about it. For this reason I don't deposit the deposit as presumed I'd just give it straight back. Anyway tenant then decides a month later all ok, happy and wants to stay. I presume thats the end of it.

We then have late rent payments so when I call tenant informs me not paying the rent as has decided to move out, 3 months later! I was fair and explained you couldn't do this, in breach of contract so tried to be reasonable and said of tenant paid my advertising costs and helped to find a replacement tenant the tenant could then leave early. The tenant refused to pay anything or help tofind a new tenant.

Then to my horror tenant disappears, moved out, took the keyss, left no forwarding address, hadn't paid any bills let alone register for any bills and the property was dirty and not the condition it had been in. I track the tenant down who then says the reason for leaving was the property was damp. The tenant even illiegally entered the property to try to get a damp report commissioned which in the end said no works required.

We use the ADR service (DPS) which rules in my favour as the landlord. I have now received a letter from a solicitor on the tenants behalf saying they expect to receive 3 x deposit back as I submitted it late.

Any advice on what I should do? I was under the impression that as long as the deposit was submitted before the tenancy ended which it was then it was ok also we have used the official ADR service so they were aware of its late submission and never even mentioned it?

Advice, please. Thanks

Debt_Free_Chick

Becks045 wrote: »

We use the ADR service (DPS) which rules in my favour as the landlord. I have now received a letter from a solicitor on the tenants behalf saying they expect to receive 3 x deposit back as I submitted it late.

Can you clarify please .... I they saying that they will go to Court and expect to get 3x deposit back?

Or are they demanding you hand over 3x deposit?

Geenie

I use the DPS. You have to have the money secured within 14 days of receipt. Did you do this and also give your tenant the necessary paper work that needs to be served on them and signed (Prescribed Information, terms and conditions)?

It is vital that this is done, copies taken and kept for your records from the very start, else you can be put in this situation, no matter how unfair you may feel it is. I would advise getting free legal advice if you want to see where you stand, join a LL's association and see if it is worth fighting, or just coughing up and learning from it.

It cannot be stressed enough that letting should be treated as a business, not something to do in ones spare time, and everything the law states you should do as a LL is done to the letter. If this means spending hours downloading forms, chasing tenants to sign them, then so be it, but to cut corners leaves one vunerable and in this position. Good luck with it OP and let us know what happens.

tbs624

Becks045 wrote: »

Any advice would be welcome.

To cut a long story short, a tenant moved in on an AST 6 month contract, issued with tenancy, inventory, landlord certificates and my lanlord ID and government leaflet on the DPS scheme.

After 36 hours tenant contacts me doesnt like the house anymore, not happy, wants to move out. I say ok then the tenant wants to think about it. For this reason I don't deposit the deposit as presumed I'd just give it straight back. Anyway tenant then decides a month later all ok, happy and wants to stay. I presume thats the end of it.

So did you register the deposit *at this point* and confirm to the T that you had done so?

Becks045 wrote: »

We then have late rent payments so when I call tenant informs me not paying the rent as has decided to move out, 3 months later! I was fair and explained you couldn't do this, in breach of contract so tried to be reasonable and said of tenant paid my advertising costs and helped to find a replacement tenant the tenant could then leave early. The tenant refused to pay anything or help tofind a new tenant.

Then to my horror tenant disappears, moved out, took the keyss, left no forwarding address, hadn't paid any bills let alone register for any bills and the property was dirty and not the condition it had been in. I track the tenant down who then says the reason for leaving was the property was damp. The tenant even illiegally entered the property to try to get a damp report commissioned which in the end said no works required.

Slight side issue to your main query but how did you know the T had moved out? What steps did you take to confirm that the T had actually "abandoned" the property? You say that the T entered the property illegally but if a specific moving out date hadn't been confirmed and you hadn't formally sought repossession for his failure to pay rent he may still have legally been a T at that time?

Becks045 wrote: »

We use the ADR service (DPS) which rules in my favour as the landlord. I have now received a letter from a solicitor on the tenants behalf saying they expect to receive 3 x deposit back as I submitted it late.

The T must have agreed to use ADR for the first part? The fact that the ADR didn't deal with the issue of the deposit being late-registered is because that is not part of their remit - that bit *has* to come under the courts' jurisdiction.

Becks045 wrote: »

Any advice on what I should do? I was under the impression that as long as the deposit was submitted before the tenancy ended which it was then it was ok also we have used the official ADR service so they were aware of its late submission and never even mentioned it?

The law states that the deposit *should* be registered within 14 days, & the prescribed info given within the same period. However, there have been cases in some courts where the judge has interpreted the law as saying that if the deposit has been registered prior to the hearing , albeit obviously later than the 14 days, then there is no penalty payable. AFIAA what they are using is the phrasing in the Housing Act 2004, S214 2(b) as highlighted below, ie "is" - it "wasn't" registered but it "is" now

(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds-

(a) that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) has not, been complied with in relation to the deposit; or
(b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme.

(2) Subsections (3) and (4) apply if on such an application the court—

(a)is satisfied that those requirements have not, or section 213(6)(a) has not, been complied with in relation to the deposit, or
(b) is not satisfied that the deposit is being held in accordance with an authorised scheme,

as the case may be.

(3) The court must, as it thinks fit, either—

(a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or
(b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme, within the period of 14 days beginning with the date of the making of the order.

(4) The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.

Then if you look at the options under (3) they too seem open to different interpretation, as the use of the term "must also" perhaps means that for the court to be able to make an order under (4) then either option specified under 3 (a) or 3 "must also" have been court-ordered.

In your case the deposit is already registered so............

Do let us know how you get on.

Your post is a useful flag up to other LLs on the pitfalls around tenancy deposit regs though - and given that you were using the free DPS I think you should just have got that deposit registered despite the Ts flapping about over whether he wanted to stay. The law makes no allowance for flappy Ts and you have to cover your own back.

Picking up on DFC's query above, if this is just a solicitors letter than than court papers that have been served on you then, if I were in your situation, I would write back outlining some of the above points.Personal opinion onlyBear in mind that the decisions on the cases that have gone through the Courts so far are not binding on others so it's pot luck.

Becks045

Debt_Free_Chick wrote: »

Can you clarify please .... I they saying that they will go to Court and expect to get 3x deposit back?

Or are they demanding you hand over 3x deposit?

Its a letter from a solicitor we have received saying they look forward to receiving the 3 x deposit as soon as possible!

Does anyone know of any landlords that have had to pay 3 x deposit back to the tenant. The deposit was submitted whilst he was still living there.

silvercar

Its a letter from a solicitor we have received saying they look forward to receiving the 3 x deposit as soon as possible!

Sounds like they are trying it on. Would they risk actually incurring costs and going to court? I doubt it, but sometimes logic doesn't come into it.

I would be inclined to write back and say that you have taken your own legal advice and there is no requirement to pay 3 x deposit. (A penalty that only a court can order.)

clutton_2

if you have a paper trail showing your ex-tenants dithering about and mucking about - these could be adequate evidence for a judge to rule in your favour - IF it gets to court. the solicitor is definitely trying it on - as only a court can award 3 times the deposit - and as the tenant is now EX tenant - i doubt this will apply.

i believe there has been one case in which a judge refused to order 3 times deposit to the claimant (tenant) simply because the tenant was no longer a tenant when he applied to the court for the 3times penalty payment.

i think they are trying to bully and frighten you

tell them "see you in court" - i bet they dont follow it up

Debt_Free_Chick

Becks045 wrote: »

Its a letter from a solicitor we have received saying they look forward to receiving the 3 x deposit as soon as possible!

That's what I thought. You only have to pay 3x deposit IF the ex-tenant takes you to Court. The Court orders payment of 3x deposit and if they don't, you don't have to pay it.

Does anyone know of any landlords that have had to pay 3 x deposit back to the tenant. The deposit was submitted whilst he was still living there.

I think there have been some cases, but the circumstances were different.

Don't worry about it. I would be inclined to reply along the following lines:

Thank you for your letter of xxx.

The matter of the deposit has been resolved with the tenant, with the assistance of the XXXX [insert the name of the resolution procedure as quoted on correspondence from them].

Don't go into detail, just state "it's resolved".

I agree with the others - that the solicitor is trying it on and that the ex-T's next step is to go to Court or simply "shut up"!!

tbs624

Debt_Free_Chick wrote: »

That's what I thought. You only have to pay 3x deposit IF the ex-tenant takes you to Court. The Court orders payment of 3x deposit and if they don't, you don't have to pay it.

Agreed but if they do pursue you to court and the T wins you will also get to pay their court costs as well as your own.

Debt_Free_Chick wrote: »

I think there have been some cases, but the circumstances were different.

The point is that the county court decisions aren't binding.

Debt_Free_Chick wrote: »

.....Don't go into detail, just state "it's resolved".

The matter of the deposit return/deductions has been resolved via ADR, yes, but that is not the matter that the T and his solicitor are pursuing. As stated before ADR cannot deal with the issue of whether or not a tenancy deposit has been registered in a timely manner. If the T is to challenge the LL specifically on that one it has to be via the courts, and his solicitors letter is effectively an LBA.

Debt_Free_Chick wrote: »

I agree with the others - that the solicitor is trying it on and that the ex-T's next step is to go to Court or simply "shut up"!!

Some of the cases that have got to court so far have also been in the spirit of "trying it on": this sort of testing is what happens with new legislation and some solicitors will do a pro bono job.

You may be right and it may not proceed to court, on the other hand, it may well do, and to prepare for that possibility the OP may want to read up on the varying arguments presented in cases so far (post 4).