Landlord witholding Deposit - rent arrears by one tenant

Rawhide_2

5 tenants co-sharing a house have just completed their Tenancy.

It is what looks like a standard tenancy agreement, "For letting furnished dwelling house on an assumed shorthold tenancy under part 1 of the housing act 1988 as amended by s19A of part 111 of the housing act 1996"

The LL is owed several grand by one of the tenants, but this was not disclosed to other tenants until the after the agreement finsihed and everyone moved out. The LL has now informed the remaining ex-tenants of the intention to keep the Deposit, until the ex-tenant in arrears has cleared their bill.

Can anyone comment if this is legal ?

All comments gratefully appreciated in advance

According to the Deposit section of the lease it states "The deposit will be held by LL in compliance with the current Tenancy Depost Protection legislation and will be returned when all receipted final bills and claims have been settled, if disputed the terms of the TDP legilation will come into force". Does this include rent ?

To me it would not seem reasonable that the other tenants are collectively financially responsible for debts of the tenant in arrears. Any views on this ?

Should the LL be pursuing the rent arrears with the defaulter and their guarantor. Or am I being naive ?

RAS

Is this a regsitered HMO?

Was it joint tenancy? if so, then you are jointly and severally liable for any non-rent payment by any one of the tenants.

Rawhide_2

Yup, its a oint tenancy complying with HMO regulations

Worringly, the LL used the same phrase "severally liable" in the intention communication

RAS

He understands the law and your liability.

i suggest that you and your housemates get together and send the offender a joint letter before action. Do you have a forwarding address?

Rawhide_2

The defaulter seems to be a serial late payer, being 5 months behind on the rent. When recently asked to pay for share of outstanding utility bills, the person to the requestor to F off and that the money would be transferred (no timescale given). Am not holding breath.

Agreed a joint letter would be good idea.
Assuming that fails to yield any results, small claims court ?

Is the Guarantor of the defaulting tenant liable for anything, ?

mchale

Rawhide wrote: »

The defaulter seems to be a serial late payer, being 5 months behind on the rent. When recently asked to pay for share of outstanding utility bills, the person to the requestor to F off and that the money would be transferred (no timescale given). Am not holding breath.

Agreed a joint letter would be good idea.
Assuming that fails to yield any results, small claims court ?

Is the Guarantor of the defaulting tenant liable for anything, ?

Yes, the full amount owed along with any other guarantor on the tenancy

G_M

Rawhide wrote: »

Yup, its a oint tenancy complying with HMO regulations

Worringly, the LL used the same phrase "severally liable" in the intention communication

This is unclear. The critical question is whether each individual occupant has their own individual contract/tenancy agreement, or whether (as it appears) there is a single contract which all 5 tenants signed, with the magic words 'jointly and severally' included on the contract.

If you are all 'jointly and severally' responsible, as seems likely, then you are wrong to say:

The LL is owed several grand by one of the tenants,...

The unfortunate reality is that the landlord is owed several grand by you all as a group.

He can demand payment of all arrears on the property from any one of you, two of you, or all five of you, as well as from any guarantor involved.

Most LLs will go after the easiest target ie the easiest to find, or the target with the most assets ie a guarantor who owns their own property.

I see a court case coming probobly with all 5 + guarantors named as co-defendants (unless of course the deposit covers all the arrears).

There is nothing to stop the 4 of you, however, bringing a court action against the miscreant 5th tenant - assuming of course that a) he has not vanished and
b) he has some cash/assets with which to re-pay you....

casper_g

Rawhide wrote: »

According to the Deposit section of the lease it states "The deposit will be held by LL in compliance with the current Tenancy Depost Protection legislation and will be returned when all receipted final bills and claims have been settled, if disputed the terms of the TDP legilation will come into force". Does this include rent ?

If the tenancy agreement (which should refer to an "Assured Shorthold Tenancy", not an "Assumed" one) makes the tenants "jointly and severally liable" then the landlord is quite within his rights to hold all the tenants liable for the arrears. Unfair as it may seem, he could even pick one of the tenants and pursue them for the debt owed by one of the others.

The paragraph I quoted above makes me wonder whether your landlord has in fact complied with the deposit protection requirements, or whether he's just put some text in to make it sound like he is. There are three approved schemes for deposit protection. Two of these involve the landlord holding the money himself, with an insurance scheme to pay the money back to the tenants if the landlord witholds the moeny unfairly. If he's using one of the schemes you (the tenants) should have received details from the scheme that is protecting the deposit. Check the schemes' websites (either mydeposits.co.uk or thedisputeservice.co.uk) to confirm whether the deposit is actually protected, as this may affect how you should proceed.

At the end of the day though, it is likely that you are all jointly responsible for this debt, and the best way forward would be to persuade your former housemate (friend?) to pay what he owes.

G_M

"The deposit will be held by LL in compliance with the current Tenancy Depost Protection legislation and will be returned when all receipted final bills and claims have been settled, if disputed the terms of the TDP legilation will come into force". Does this include rent ?

Unlike casper above I see nothing here to indicate the LL is not complying with deposit rules. But by all means check the 3 schemes.

And yes, it covers rent arrears.

Rawhide_2

The tenancy was "For letting furnished dwelling house on an Assured shorthold Tenancy".

It was a joint agreement listing all 5 tenants on the final page. Each tenant signed an individual copy (plus their guarantor). All 5 tenants did not sign on the the same hardcopy.

The Tenancy agreement has been carefully checked and definately does not appear to contain the text "jointly and severally liable"

The only thing that comes close is General clause 7; "where either party is two or more people, their obligations under this agreement are joint and individual. Where his/he appears read his/her or he/she.

Does the fact that this was an Assured tenency infers "jointly and severally liability" ? . The deposit was lodged with mydeposits.co.uk, a certificate was provided by the LL. Is there any point in lodging a dispute with mydeposits if the co-tenants are seen to be liable for debts of their house sharer.

It transpires that the LL was first owed rent by the miscreant in Dec 2009, and since then there were 6 further months where rent was not paid (Feb10, Mar10, Jun10, July10, Feb11 & Mar 11). At no stage did the LL communicate the liability to the other tenants that their flatmate was behind with rent, and that he would ultimately pass this liability onto other tenants by with-holding the house deposit. Would a judge consider this reasonably responsible behaviour on behalf of the LL ?

The deposit covers all of the arrears, however the other 4 tenants would ideally like to get their deposits back

Rawhide_2

Have lodged a dispute with mydeposits.co.uk
Will update in due course. :money: