Potential loss of entire rental deposit

N79

schnide wrote: »

I sent the less-formal email to my agent today and copied in my landlord, with reference to the landlord being legally responsible for returning the deposit, and the letting agency representing him but not replacing his obligations.

The landlord replied, copying in his solicitor, stating that I did not pay the deposit to him and he has never had access to it. He has said that he has nothing to do with the inventory check-in or out, nor holding or returning the deposit.

He has also said that these responsibilities lay with letting agent and are part of the duties they undertake to receive a fee from the landlord, and that the agent we supposedly chose to find us a property is legally bound to be a member of the DPS and as such will be.

I suspect he may have consulted with his solicitor before writing this reply - I am, however, dubious of his position and would appreciate your advice.

Clever man.

Your right - he has consulted with his solicitor who knows their housing law. And your also right that he is setting up a defence. Whether it can work is another matter.

While I agree with Clutton that the LL should be responsible and that the intention was that the LL should be responsible we once again need to go to the surprise High Court judgement in Draycott vs Hanells (See http://www.bailii.org/ew/cases/EWHC/QB/2010/217.html ). In particular we need to examine Paras 38 and 39 - see below and note the highlighting is mine.

<LI value=38>In my view the words in s.214(3)(a) "the person who appears to the court to be holding the deposit" are not otiose. Rather, those words limit the scope of any possible order under s.214(3)(a) to

the person holding the deposit, and prevent such an order being made against any other person who would come within the statutory definition of the landlord – for example a letting agent who, at the time of the making of the court order, was not holding the deposit.
[*]
No such limitation would be appropriate in s.214(4). Unlike s. 214(3), which is an order for restitution made against the holder of the deposit, s.214(4) is penal, as Mr Browne points out. There is no reason why the penalty should be imposed on the person who, at the time the court order is made, happens to be holding the deposit. The penalty should be imposed on a person who is responsible for the failure to comply with s.213. In the present case that is the Defendant, and not the actual landlord (assuming, at this stage, that there has been a non-compliance which attracts an order under s.214(4)).

S38 seems clear that the court should avoid making an order on anyone except the person holding the deposit. In some ways this wide interpretation helps Ts because it allows them to sue agents as well as LLs. Having allowed this, Mr Justice Tugendhat then sets out the limitations in S38 on who can be ordered to protect the deposit (only the person currently holding the deposit) adn in S39 sets out who can be made to pay the penalty for non protection (only the person who failed to protect the deposit). Indeed, in the above case he expressely states (see underlining) that the LL was not at fault in this case and hence was not liable for the penalty.

So if your LL claims to have never had the deposit and to have never controlled the deposit they could try to use this case to argue a defence to the penalties associated with non compliance to deposit protection.

However, while the above is a means for the LL to establish a defence against the penalties associated with non protection it does not, in my view, address the issue that there is still an outstanding deposit to be returned and that remains, as indicated by Clutton, the LL's responsibility.

In my opinion, the best way forward will be a small claims "claim" against the LL for the return of your deposit (while forgetting about deposit protection). I assume that your LL is named on your tenancy agreement as your LL (even if the agreement itself was signed by the agents and the agenst address has been used). Send a formal letter before action to your LL first, indicating that as your LL they are responsible for the return of your deposit and that if you don't receive the deposit in 7 or 10 or whatever working days then you will file a small claims case. Hopefully that will get a reaction. Keep the letter short and too the point and don't mention deposit protection as it will not be relevent to any subsequent case.

A final point to mention is that we are currently waiting for 2 addtional high court judgements which may well change all of the above opinion.

Finally, as with all my posts, this post contains only my opinion and is not advice of any sort. If you want legal advice then find a good local solicitor who specialises in housing law.

Good luck.

schnide

I do appreciate that all help on here shouldn't be taken outright as legal opinion, but it's still very gratefully received.

The landlord isn't personally named, but a company which I believe is his, is.

The AST states:

x) The Tenant shall pay to the Agent, on the signing of this Agreement, £2310.00 (two thousand three hundred and ten pounds)(“the Deposit”) as a Deposit which shall be held by The Deposit Protection Service. The Agent is a Member of The Deposit Protection Service. At the end of the Tenancy the DPS (Deposit Protection Service), shall return the Deposit to the Tenant subject to the possible deductions set out in this Agreement

(Note: Bolding is theirs).

There's also a clause which states:

x) The Deposit is safeguarded by The Deposit Protection Service, which is administered by..

These are on pages of which both ourselves as tenants, and the landlord, signed. It doesn't say whose responsibility it is/was for making sure this had been done.

Does anyone know then those two outstanding court cases are likely to return a judgement?

With thanks, as always.

N79

schnide wrote: »

I do appreciate that all help on here shouldn't be taken outright as legal opinion, but it's still very gratefully received.

The landlord isn't personally named, but a company which I believe is his, is.

Then the company is your LL, not the individual. Exactly what implications this has will depend on the type of company but either way, whenever you see a reference to the LL this refers to the company and not the person.

The AST states:

x) The Tenant shall pay to the Agent, on the signing of this Agreement, £2310.00 (two thousand three hundred and ten pounds)(“the Deposit”) as a Deposit which shall be held by The Deposit Protection Service. The Agent is a Member of The Deposit Protection Service. At the end of the Tenancy the DPS (Deposit Protection Service), shall return the Deposit to the Tenant subject to the possible deductions set out in this Agreement

(Note: Bolding is theirs).

There's also a clause which states:

x) The Deposit is safeguarded by The Deposit Protection Service, which is administered by..

These are on pages of which both ourselves as tenants, and the landlord, signed. It doesn't say whose responsibility it is/was for making sure this had been done.

Does anyone know then those two outstanding court cases are likely to return a judgement?

With thanks, as always.

No change to my opinion above - off to the small claims court you should go. The LL stil has an implied obligation to control their agents and therefore maintains responsibility for your deposit.

Don't worry about what might happen at the High Court - it wont have an impact on a straight small claims deposit reclaim case as these cases relate to deposit protection.

DVardysShadow

schnide wrote: »

Thanks for the help on this. I had a read through our AST and the Housing Regulations though and I couldn't quite see how the two combine to make the landlord responsible. The landlord also seemed convinced enough to have copied in his solicitor that I wonder if somehow they provided an AST which exempts him.

N79 has explained the distinction between claiming the deposit and claiming the penalty for non-protection. The bit which you may be missing is that the Landlord's liability for the deposit paid to the Agent does not arise from Housing statute and AST, but from the AST and normal contract law. If the LL engages an Agent to act on his behalf, any contract is still between Tenant and Landlord. The involvement of the Agent in the AST merely confirms that he is authorised to act on behalf of the Landlord and specifically that he is acting on behalf of the Landlord in taking your deposit.

If the Landlord has not received the deposit, he is responsible for returning it to you - and only he has the standing to sue the Agent, whereas you have the standing to sue the Landlord. I think that it may be that your Landlord is bluffing when he appears to have copied his solicitor in.

schnide

Thanks guys.

Can I just clarify this statement was worded correctly, DVardysShadow?

"If the Landlord has not received the deposit, he is responsible for returning it to you"

(It could be read by implication that if the landlord has received the deposit, then he's not responsible for returning it, but I have no doubt that's not the case).

Would it jeopardise my standing in any way to reproduce the wording of the email from my landlord, if the details are removed? It smells very strongly of being carefully worded in order to distract me - and I think you may have fun with it

N79

schnide wrote: »

Thanks guys.

Can I just clarify this statement was worded correctly, DVardysShadow?

"If the Landlord has not received the deposit, he is responsible for returning it to you"

(It could be read by implication that if the landlord has received the deposit, then he's not responsible for returning it, but I have no doubt that's not the case).

Would it jeopardise my standing in any way to reproduce the wording of the email from my landlord, if the details are removed? It smells very strongly of being carefully worded in order to distract me - and I think you may have fun with it

I think your over analysing what we are quickly typing in an internet forum. I suppose that with the benefit of detailed proof reading then

"Irrespective of whether or not the LL has received the deposit from his agent, he is responsible for returning it to you"

might have been more generically precise but DVardys statement is spot on correct.

I can't see why posting the words of your LL's letter would be a problem unless it was sent to you in confidence (unlikely) but nor can I really see what you would gain by posting it. Your call.

schnide

I expected that to be the case but I hope you understand my wanting to make sure. The landlord replied to me with:

"To clarify your current misunderstanding of this situation I wish to state here very clearly, and I am copying my solicitor on this e-mail, that you did not pay your deposit to me. That I have not deposited this money into my bank account. That I have never had access to it in any shape or form.

I would respectfully suggest you check your bank statement to find out exactly where and when your money was deposited, and by whom, because it was certainly not with me.

When employing a letting agent, as in this instance, the landlord has nothing to do with either booking the inventory clerks for the check-in/check-out procedure or receiving, holding and returning the deposit.

These responsibilities lie entirely within the domain of the letting agent and constitute part of the duties they perform in order to receive their fee from the landlord.

The letting agent you chose to find your property, in this case [...], will no doubt be a member of the Deposit Protection Service, as by law they are bound to be.

All I can say is that I have known [individual at company] for many years, and that I have always found him to be a decent and honest person."

A lot of that seems to be weasel words, as well as what I suspect in part as being legally inaccurate. However I will start looking for a lawyer in my area who can advise.

clutton_2

"""To clarify your current misunderstanding of this situation I wish to state here very clearly, and I am copying my solicitor on this e-mail, that you did not pay your deposit to me. That I have not deposited this money into my bank account. That I have never had access to it in any shape or form. ""

i would reply "to clarify your current misunderstanding of this situation, the legal contracted parties to an AST are the tenant and landlord (whether the AST is signed by an agent on behalf of the landlord or not).

Thus in law, you are personally responsible for returning my deposit to me. It is up to you to regain that deposit from the agent.

Under L&T legislation tenants are not allowed to suffer financial hardship because a landlord chose an agent who was not competent.



I look forward to receiving my deposit back in full by x date (10 days). If it is not received by that date proceedings will be issued against you forthwith.

Yours faithfully

pyueck

schnide wrote: »

I expected that to be the case but I hope you understand my wanting to make sure. The landlord replied to me with:

"To clarify your current misunderstanding of this situation I wish to state here very clearly, and I am copying my solicitor on this e-mail, that you did not pay your deposit to me. That I have not deposited this money into my bank account. That I have never had access to it in any shape or form.

I would respectfully suggest you check your bank statement to find out exactly where and when your money was deposited, and by whom, because it was certainly not with me.

When employing a letting agent, as in this instance, the landlord has nothing to do with either booking the inventory clerks for the check-in/check-out procedure or receiving, holding and returning the deposit.

These responsibilities lie entirely within the domain of the letting agent and constitute part of the duties they perform in order to receive their fee from the landlord.

The letting agent you chose to find your property, in this case [...], will no doubt be a member of the Deposit Protection Service, as by law they are bound to be.

All I can say is that I have known [individual at company] for many years, and that I have always found him to be a decent and honest person."

A lot of that seems to be weasel words, as well as what I suspect in part as being legally inaccurate. However I will start looking for a lawyer in my area who can advise.

Unfortunately the landlord clearly doesn't understand what 'agency' means. When the landlord gave the letting agent the authority to rent the house he authorised that 'all the agent's actions falling within the scope of the authority given will bind the principal.' The landlord is the principle and therefore is liable for the action of the agent acting on their behalf (taking the deposit).

Under the housing Act 2004 it is quite clear that the landlord is responsible for both registering the deposit with a protection scheme and repaying you. As he authorised the agent to accept this payment, it is of no concern to you about the disagreement between the agent and the principal.

213. (3) Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 14 days beginning with the date on which it is received.

The landlord is clearly arguing that he did not receive the deposit, but he did as he instructed the agent to do so and he is bound by the actions of the agent acting under his control.

It is made clear in the Housing Act 2004 that the landlord cannot lie behind their agent:
212 9(a) references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies

The whole solititors thing is completely meaningless, he has no legal basis for his arguments, its waffle.

The tenancy deposit scheme form should be signed by the landlord not the agent, do you have it?

Reply something like:

Dear Sir,

I paid the deposit to the letting agent acting on your instruction. As landlord you were the principal to the agents action and therefore are bound by them. Under the Housing Act 2004 as Landlord you are responsible for the return of my deposit. As in your previous correspondance you have indicated that you are not recognising your accountability to repay the deposit to myself I have no option but to take legal action against yourself. I will be taking this action in 10 days unless my deposit has been returned in full before this.

xxxxxx

schnide

Thanks for your continued support on this one. I'm seeing a solicitor today for a free half hour surgery and will let you know the outcome.

In the meantime, to answer your question pyueck, I don't have a copy of the tenancy deposit scheme form. The agency recently asked me for a receipt for the scheme which I couldn't give them as one was never supplied, and they have since said it appears the deposit was never placed into the scheme. The agency say they are speaking to their insurers and that they are seeking to return our deposit through loss adjustment. The agency also confirmed the position that the landlord has taken, although now I know different.

I, however, don't care what they're doing or with who - I just want my deposit back, and nothing would give me greater pleasure than to do so and prove how incapable my ex-landlord has been the entire time - particularly in these closing moments.